Yesterday I posted a few items on Twitter endorsing Ramesh Ponnuru’s argument that conservative concerns about people not paying income taxes are overblown (Joe blogged about the Ponnuru article here yesterday). Some of the responses I received are themselves worth responding to.
Many conservatives are fixated on the the 47 percent of Americans (probably closer to 46 percent this year) who don’t pay income tax. To the extent that this is a rhetorical point against liberal arguments that the rich are undertaxed, it is worthwhile. I can also understand concerns about people voting for big government without paying for it, though one can be a net beneficiary of federal spending even if they pay some amount of income taxes.
The Reagan and Bush tax cuts dropped millions of Americans from the income tax rolls altogether. So did the child tax credit passed by the Gingrich Congress, later expanded by Bush. Bush also cut the bottom tax rate from 15 percent to 10 percent. These middle-class tax cuts for families wiped out some families’ income tax liability entirely. Others don’t pay income tax because of their untaxed Social Security benefits. Conservatives supported all of these policies. The earned income tax credit is another contributor to non-payment; it is more controversial among conservatives, but it has had Republican support in the past and has something of a conservative pedigree.
Many others earn such meager incomes after the recession that personal exemptions protect their income from taxation. (In other words, they are not exactly “lucky duckies,” as a Wall Street Journal editorial once described them.) Conservatives have not historically been hostile to such protections. The Forbes flat tax plan, on which the tax plan of one of the 47 percent worriers is based, featured generous personal exemptions and would have dropped many people from the income tax rolls.
Let’s get to some of the criticisms, which I’ll try to fairly paraphrase here:
Nobody is talking about raising taxes on the poor or middle class. This is a straw man.
If Rick Perry and Michele Bachmann are serious about requiring everyone to pay at least some income tax, they will increase the net tax burden of the poor and the middle class. Which of the conservative policies above do they want to repeal to return these Americans to the income tax rolls? If they only want to make the low-income filers pay a symbolic amount of income tax, then they will not really prevent these Americans from being “takers” from the government rather than “makers,” to borrow Paul Ryan’s terms. These symbolic income taxpayers will still get more in government benefits than they pay in taxes.
In any event, if Perry and Bachmann mean what they say, they have gone beyond using income tax non-payment as a rhetorical point against liberal class warfare and have started contemplating policies to tax the poor.
This wouldn’t be a tax increase because these people don’t pay taxes. It would only turn them from non-taxpayers into taxpayers.
This reminds me of the liberal argument that it isn’t a tax increase to let the Bush tax cuts expire. Which direction do taxes go if the Bush tax cuts end? They go up. Most people would reasonably see something that increases their tax burden as raising their taxes.
This argument may apply to people who pay no taxes because they don’t work. But most of them do work and pay payroll taxes, among excise and other taxes. Arguing that enlarging their tax bills by imposing income taxes on them too isn’t a tax increase would be like claiming that suddenly slapping a 20 percent national sales on top of the income income tax wouldn’t raise anyone’s taxes but simply turn non-sales taxpayers into sales taxpayers.
It is a matter of personal responsibility for these people to pay taxes.
Again, most of them do pay payroll and other taxes. But it seems to me that a conservative vision of personal responsibility would entail having people living on subsistence-level incomes support themselves and their families before they support the government. Isn’t that where conservative priorities lie?
These non-income taxpayers will vote for big government.
Maybe they will, although Ponnuru’s article shows that this hasn’t historically been the case. Others might feel that if they pay into the system with taxes, they should get government benefits. Certainly many payroll taxpayers feel that way. The problem is federal spending and the extent to which people are net beneficiaries of the government. Restrictions on government borrowing, like the balanced budget amendment, also seem like a better way to keep big government from being free than entertaining tax increases on the poor.
Many of the policies that dropped taxpayers from the income tax rolls were helpful to getting across-the-board tax cuts passed. In those cases, creating non-income taxpayers helped reduce the tax rates paid by income taxpayers. It would seem perverse, and certainly politically self-defeating, to want to preserve the Bush tax cuts for the wealthy but erode them for the poor. But that’s the impression created by trying to keep the top tax rate from going up while complaining that the poor don’t pay enough taxes.
In fairness, most people who make arguments about the “53 percent” would instinctively and immediately recoil from an actual proposal to raise anyone’s taxes regardless of income level. But we do need to be careful where the logic of some of our arguments lead us.