Taxation Principles

Does the Grand Ole Party have a weird obsession with low income people not paying enough taxes? You’d be hard pressed to argue differently given various statements by well known Republicans, pundits and general media conservative naysayers. Yet even Pew found that 51% of Republicans viewed the American tax system as very/moderately fair. So I’m not so sure it’s that clean cut enough to lump the average GOPer with the party movers and shakers, but Derek Thompson thinks it might be (my emphasis in bold):

Here’s a fresh quote from the latest non-Romney front-runner in the GOP presidential race. “This dividing of America [between] 99-1,” Rick Santorum said this morning in New Hampshire, “It’s anybody that makes money and pays taxes and everybody who doesn’t. That’s the 99-1.” […]

[….] According to Santorum’s quote, the most important class division in America is between income tax payers and non-income tax payers. This is a weird fight to pick for the Republican party, and particularly for Santorum, whose tax scheme would probably increase the number of households who owe no federal income tax.*

More broadly, it’s surreal for Republicans to complain about taxes being too low on the poor while they also propose tax cuts for the wealthiest Americans. Neither Santorum nor any other candidate has actually said, “I want to raise taxes on the poor to pay for tax cuts for the rich,” in so many words. But there is no other way to interpret the dual claims that not enough people pay income taxes and also tax rates should be lower.If you want higher federal income taxes on the poor and lower tax revenue overall, you are asking for the poor to subsidize a tax cut for the rich. The math doesn’t work out any other way.

Of course in between first and second paragraphs Thompson goes on to explain the usual reasons for why Santorum’s statement is largely inaccurate. Yet I do agree that the emergence of this question about the poor paying too little in Federal Income Tax (FIT) is a bit odd, and yes it does seem strange that on one hand you would demonize the idea of the wealthy paying more and extol the justice behind making the poor pay more. This is because the messaging coming out of conservative leadership regarding taxation is very much centered around the principle of lowered taxation, and not so much the reality or details of whatever policy such principle drives.

Because if you look at the scored tax plans for some of the GOP candidates it’s clear that such details involve raising the tax burdens for the poor and lowering them for the wealthy. Now of course when confronted with the details of what their plans would do then we hear responses involving job-creators and magical economic booms, etc. Yet the details are what they are, and it seems to me a roundabout way of saying that your principle of lowered taxation is a principle that attaches greater value to citizens of wealth and lower value to citizens of limited means. Of course saying as much might not win you very many elections, so there is that factor.

That being said, there is a bit of a disagreement brought up in the comments that I believe has some merit – specifically in the case of those who have less than zero FIT liability and receive a refund. In that case is it accurate to describe a scenario where raising taxes on the poor is effectively a pay-for if you simultaneously reduce taxes on the wealthy? If it’s inaccurate, whether for semantic, technical, or even moral purposes then perhaps that line of argument has a point. Yet I’m not so sure this is necessarily a clean cut argument for why it wouldn’t matter if such a scenario was put into place. Either way it raises the tax burden, and therefore the economic burden, of the poor and lowers it for the wealthy.

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