CNBC should be ashamed for only presenting one side of the argument on who pays US taxes, and why.
A friend of mine recently sent me a note about a conservative CNBC TV segment he watched called “The Tax Burden". My friend mentioned that the CNBC host was interviewing two guests, a man named Scott Hodge, President of the Tax Foundation and Tony Fratto, a CNBC contributor and Managing Director of Hamilton Place Strategies.
Here are a few comments made by the host in the introduction to the interview portion :
• Those making more than $150K make up the nation’s top 5% income earners
• If there was a 5% tax hike on those top 5%, it would only make a 3% dent in the US deficit
• 1/2 of all US individuals pay zero income tax
• The top 1% pay a greater share than everybody under $100K, combined
Per Mr. Hodge:
• We must broaden the tax burden - I'm a big fan of the Forbes flat tax
• US relies more heavily on top 10% paying taxes than any other industrialized country
• Our wealthy are over-taxed and our poor are under taxed by international standards
Per Mr. Fratto:
• 25% of US income earners pay 86% of all taxes. The richest pay more than a third
• Half of the country pays no taxes at all
• It's destructive to have so few people shouldering the tax burden
• We need to scrap our current tax code and start over
• Consumption tax urged
There was also an impressive statistical graph which plotted the percentage of the total tax burden from 1987 to 2007 comparing the TOP 1% to the BOTTOM 95%.
My friend then reminded me of the old saying that, “There are 3 types of lies: lies, damned lies, and using statistics.”
Finally, he suggested that as an opinion writer who occasionally takes on the US economy, I might find it interesting to see how the conservative financial media is casting our American tax issues.
Here’s how I responded to my friend as I sincerely demonstrated what he “did not, and would not be hearing from these conservative galleries”:
>>> In the 1950’s and 60’s, 28-41% of our nation’s taxes were being paid by US corporations. Today that percentage is between 7-18%. The burden today is instead placed on the shoulders of individual Americans. In addition, due to off-shore tax havens and tax loop-holes, corporations and those that have most of the income have found a number of currently legal ways to keep it. (And they are legal today, due to the many changes over the past 2 decades made possible by highly paid Washington lobbyists.)
>>> I also agree that we need to “scrap our current tax codes”, but for very different reasons.
>>> The reason that ½ of the country pays no income tax is because American wages have stagnated so much over the past 20 years. Due to that wage stagnation, many Americans today don’t even make enough to qualify for paying income tax.
>>> I’m sure that these two conservatives did not mention that the taxes paid by the top 1-2% in the US are the lowest they’ve been in decades. However, the top income earner’s incomes over the past decade have increased an average 150-275%.
>>> The last time the gap between the rich and the poor was as large as it is today was just before the 1929 Wall Street crash. (Is this all sounding familiar?)
>>> On the other hand, the average working American and the working poor do pay those taxes called “payroll taxes” (these taxes are the largest contributors of personal US taxes).
>>> These working Americans also pay sales taxes in those states that have sales tax. (As an example, in a recent purchase from a store in Atlanta, Georgia, my receipt showed a state sales tax, a county sales tax, and two district sales taxes for a total sales tax % of just under 10%.)
>>> I’m sure the “hosts” didn’t mention that the so called “flat-tax” or “consumption tax” is the hardest on the poor, while it is mainly inconsequential to most of the wealthy.
>>> The reason that “25% pay 86% of all taxes. & The richest pay more than a third” is that they’re the ones that make the income for being able to pay the taxes. If the average American’s wages had kept the same pace as they had from the 1940’s to the 1970’s, America’s tax base would be much more equitable.
I finished my comments to my friend by saying, “Don’t you just love those conservative pundits that only use the statistics that support their bogus statements, while ignoring the overall truth". (Kind of sounds a lot like Rush Limbaugh and FOX’s Sean Hannity, Charles Krauthammer, and Bill O’Reilly.)
Copyright G.Ater 2012
Follow me on Twitter: gater01
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