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Everyone Pays Taxes. Everyone.
I want to set the record straight. Despite Minnesota Congresswoman Michelle Bachman’s repeated declarations, everyone pays taxes.
Got that? Everyone pays taxes. There’s no one who doesn’t pay taxes. Here’s how.
We can define taxes narrowly or broadly. In either case, however, everyone pays. In an immediate, practical sense, a tax is an imposed pecuniary burden. It’s a fee levied by government to carry out the collective will. A tax is money transferred to government to fund community services and functions. Income tax is a good example. It functions as a direct funds transfer from the individual earner to the state.
In the widest sense, a tax represents a larger cost. It may not involve a direct payment but represent a portion of a payment in which the transfer responsibility falls to another party. Renters, for example, don’t directly pay property taxes as property owners pay them but rent includes an element of the levied property tax. The renter pays property taxes indirectly.
In Minnesota, we sit astride a three-legged tax stool. Public revenue is generated through a combination of property, income and consumption taxes. Property taxes are paid twice yearly, although anyone with a mortgage functionally pays their property taxes monthly with their mortgage payment. Income taxes are paid during the pay-period in which they’re earned, automatically deducted from a worker’s paycheck. Lastly, consumption taxes, better known as sales tax, are levied on purchased goods.
Even if you own no property, lack gainful employment and receive some form of community assistance, you pay taxes on the purchase of goods. Even under the narrowest of tax definitions, you’re paying taxes.
Bachmann knows this, of course. In her “everyone should pay something” claim, she’s employing a conservative persuasion strategy that lessens the value of poor and lower income people. She’s creating a slippery slope that directs public resources away from the neediest and concentrates public investments’ benefits into the hands of fewer, wealthier people. When Bachmann says “everyone should pay something,” she means “those people who don’t earn enough money to pay income tax are lesser citizens.”
The moral “means” test is as old as human society. Congresswoman Bachmann isn’t the first person insinuate that community woes are caused by the undeserving poor; she won’t be the last. But, at least let’s not misrepresent tax policy.
A progressive tax policy is the best, fairest way of sharing of collective community responsibility to protect ourselves. If we reverse our growing reliance on regressive taxes, Minnesota will move forward.
Posted in Fiscal Policy | Related Topics: Income Tax Sales Tax Tax Fairness
31 Comments
November 23, 2011 at 9:07 am
The National Review is one of the most respected conservative publications. They looked into the whole “47% don’t pay any come taxes” talking point you hear repeated so much. They see it as? A “freeloader” myth.
They point out that those people still pay a lot of other taxes, so zeroing in one just this one is (deliberately) faulty analysis. All of this talk is just the fear card being played once again… and you can see it comments right here on 2020.
What’s the underlying message in the “47% don’t pay any taxes” talking point? That you of the 53% should be worried that the government is “free” to “47%”, and therefore they will want more government… which will come and tax you. And who likes paying taxes..
Except? None if holds water. For the coupe-de-grace, when they do the analysis they find that the states with the highest amount of “47%” poor people… those who have so little that they don’t owe any income taxes (while paying a lot of others) went for ... McCain in the last election.
When the most respected and thoughtful conservative publication so completely debunks this whole selfish argument… even calling it a myth… isn’t it time for some people to change their minds?
Here’s the link to the whole article, and have a Happy Thanksgiving, another ugly myth is debunked by thoughtful people on their “own side!”
<http://www.nationalreview.com/articles/283265/freeloader-myth-ramesh-ponnuru?>
November 14, 2011 at 10:06 am
Liberal progressives must think those of us that are truly thankful and grateful for their many blessings received their blessings on the backs of others rather than from God.
November 14, 2011 at 9:21 am
Envy is the true evil that must be replaced with gratitude and thankfulness.
November 14, 2011 at 8:29 am
Dan,
Jealousy and envy of successful people are horrible traits of you liberal progressives. You rationalize your failures by attacking successful people. That is a truly sad state of mind to be in. I have pity for you and your liberal progressive friends.
November 12, 2011 at 1:07 am
The “death knell” of our country comes from the gluttonous ones how have not earned the enormous wealth they have received. The same ones who incite any and every war to be fought by the poorer among us. A these very rich feel they are patriots? I’m afraid our country is being destroyed by the hoggish overpaid among us who demonstrate their patriotism by illegally hiding their money in Swiss bank accounts.
I don’t go along with Mike Downing’s upside down world where selfishness and greed are admirable values. Where you only ask what your country can do for you, instead of what you can do for your country. I don’t look as the underachieving rich as anything than ones who suck the life blood out of our country and don’t return a commensurate positve value.
Also, I don’t accept the overused reactionary description of calling the rich the “job creators.” It is the consumers of products that create the jobs. No demand, no jobs.
I suggest that the rich stop belly aching and start returning to our country from the great bounty they have received.
November 11, 2011 at 11:09 am
Bryan & David,
Thank you for being the voices of reason opposing the Marxist Socialist voices of Dan Conner, Bernice Vetsch and others on this liberal blog.
As you have pointed out so well, conservatives, libertarians and Tea Party supporters simply want to restore the values and beliefs of our Founding Fathers and what made this country great. Individual responsibility for one’s decisions and choices are indeed at the heart of these great values. That means taking advantage of the great opportunities this country presents to each individual.
The class envy, the class warfare as well as the jealousy and hatred toward successful people who produce jobs, products and services is appalling and sickens me whenever I hear it from the liberal left. It is divisive and will be the death knell for our country and our American civilization.
November 11, 2011 at 11:06 am
Bryan - while entering a corporations is free-will, the manner about how they manage their resources and generally carry on their business is not individually decided by each stock-holder. You influence on business decisions is determined by the proportion of stock you own. Entering our country and entering a corporation cannot be compared because you enter citizenship by birth or a willful naturalization process. You enter a corporation by either buying its stock or having it willed to you. Two different entities and different methods of “entering.” Managing corporation stock holders is analygous to our country’s management of citizens, except that our country is managed in a more egalitarian menner because one adult citizen equals one vote. In a corporation, one person can have all the votes if they have all the stock. One is based on people and the other based on moeny.
November 11, 2011 at 10:34 am
Bryan:
A few weeks ago, a landlord who owns three duplexes on Ford Parkway and lives in half of one told me very angrily that “he” paid $15,000 in property taxes every year. This would $2,500 for each of the six duplex halves.
In truth, he pays only the $2,500 for the half he lives in and each renter pays $2,500 for his/her half, with each person paying the business rate. The renters’ rebate is meant to bring what renters pay, especially those with modest incomes, closer to what owners of homesteaded property pay.
$2,500 would be 7.5% of about $35,000 rent per year, which is highly unlikely. More likely is that 20% of each month’s rent is for property taxes. $2,500 would be 20% of $12,500 per year, or $1,042 per month.
November 11, 2011 at 10:28 am
Bryon - you are talking apples orages. For corporations you are talking about the ability to “enter” a corporation, while socialism you are talking about what happens after you have entered. Not an appropriate comparison. I suggest you try again.
November 10, 2011 at 9:16 pm
Michael, well said. Everyone wants people to be doing well Republicans/Democrats/etc… the question is will we support each other through a forced system of resentful taxation and impatient entitlement OR a system of individual charity and appreciation.
November 10, 2011 at 9:12 pm
FICA is earmarked for OASSDI, Old Age, Social Security and Disability INSURANCE. Looking into how that program was passed 70 years ago would make the passing of PPACA look totally legit. Both charge people for INSURANCE they may not have wanted to buy.
November 10, 2011 at 9:08 pm
Entering a corporation is a free decision made by people of their own will. Socialist take from people with the power of the state. Big difference.
November 10, 2011 at 9:07 pm
Renters get about 7.5% of their rent back each year from the the State of Minnesota after filing their Certificate of Rent Paid, that is roughly half of the amount the apartment needs to pay the property taxes.
November 10, 2011 at 7:01 pm
David might benefit from reading the following. It helps explain some of the common misconceptions of the Tea Party: http://capitalgainsandgames.com/blog/bruce-bartlett/1653/what-people-dont-know-about-federal-income-taxes
November 10, 2011 at 4:02 pm
Dan, FICA taxes are not personal federal income taxes. Check the tax code.Before you tell others to check the tax code maybe you should look yourself. You are quick to say your Huffington post comments but short on facts. When less than 50 percent of the pay soon will pay no federal personal income tax it is not good. This country was formed on shared sacrifice and we can’t be a country worth being a part of if only a few support the rest. The other flaw in your argument is that the poor pay FICA tax. Many or most of those same people get earned income credit on their federal tax form which is more than the FICA tax. If they are both taxes as you say I guess they don’t actually pay any tax. HMMM!
November 10, 2011 at 3:55 pm
Bernice, You are misguided. You dont have to be a citizen to get social security. I am a social worker and many non-citizens who paid in get benefits.I am a social worker and you are mistaken. Secondly, get your facts straight on Congresswoman Bachmann, she said 47 percent of the people pay no federal income tax. That is true. FICA is not federal income tax. Read the Tax code.I saw no one say that 47 percent of the people pay no taxes. The reality is that the personal income tax is what the liberal politicians want to increase and it is not paid by everyone. I believe all people need to pay some personal income tax if they have income. People need to have a stake in things they want to change. Please listen to some news source other than the Huffington Post and don’t believe the wives tales from either side.
November 10, 2011 at 1:21 pm
I would like to ask that we not get idiotic replays to this Hindsight blog that FICA taxes are not taxes. Our last two Federal Reserve chairmen classify them as taxes, IRS considers them taxes and Social Security considers them taxes. I read some ridiculous responses of people trying to get some taxes excluded from counting as taxes just so they can get their square hole of and idea into the round hole misconception that the poor don’t pay taxes. They even pay income taxes because FICA taxes are on income and vary according to gross/net income. Also, property taxes can be deducted from income taxes. I suggest that Tea Party supporters get educated about many of the common knowledge issues in taxation.
I hate to reference this, but being deductible for state income taxes is not the threshold for determining if something is considered a tax. I realize the far right fringe of politics like to pick on the poor, but depending on fallacies is not the grounds that be used to demean the poor.
November 10, 2011 at 11:57 am
Let’s not misrepresent what Bachmann has said and repeated in last night’s debate. She has repeatedly said 47% do not pay federal income taxes and that 53% pay for our federal government.
This is true and is actually an understatement today. Today 49% do not pay federal income taxes and our federal government is supported by only 51%!
SS, Medicare & Medicaid cannot be viewed as taxes. If they were viewed as federal taxes, we could deduct them from our state tax income tax forms. Only federal income taxes are deductible on our state income taxes.
November 10, 2011 at 11:46 am
I disagree that conservatives all know that everyone pays taxes. If they did, they wouldn’t consider only income taxes when they try to blame the poor for being too poor to have to pay income taxes.
In addition to property taxes (directly or as part of their rent), the poor pay sales taxes, auto license tabs, city and county fees and salary withholding for Social Security and Medicare/Medicaid. Convservatives also forget that immigrants who are not yet citizens, including foreign students and migrant workers, pay into these funds without ever getting anything back when they grow older.
November 10, 2011 at 9:46 am
Well, David, I am glad you have so thoroughly bought into such a socialist ideea as corporations. As corporatiuons are defined in the dictionary: “A body of persons granted a charter legally recognizing them as a separate entity having its own rights, priveleges, and liabilities distinct from those of its members.” Corporations are an invention in law granted by the courts, period.
What pleases me again is that you, David, have so thoroughly bought into a Socialist principle. Incorporating would be one of the most fundamental and illustrative points of Socialism. So welcome, comrade.
Meanwhile, I stand by what I have said in all my other points. You say they are half-truths without one fact to refute them. It seems you are the one dealing in half-truths.
November 10, 2011 at 8:48 am
It is true that everyone pays taxes, what is also true is that only 53% pay income taxes and 47% pay no income taxes and in fact there are provisions where you get back even more then you have deducted out of your paycheck.
People who pay nothing in the end only ask for more and it is beginning to wear thin on those of us who you are asking even more from.
My roads are plowed like everyone else but because I pay more in property taxes I do not get my sidewalk shoveled also and if my house catches fire, I do not have any more or less water poured on it based on what my taxes paid are. We do not see things like that.
You want to make a real dent in our social issues then make it simple. You only get child support from the government on one child, you only get support from the government every month after you pass a drug and alcohol test every month.
The left has destroyed the family structure in this country. It has removed the father from families because it is worth more to have kids without dad then with dad. It has produced a generation of very lazy and underachieving people who look only to the government to get them out of their problems and it has created an environment where success is looked upon as those evil 1%ers. Why do we not cheer for those people, many of them have sacrificed everything to get where they are. They worked hard and studied hard in high school and college, paid back their student loans when they came due. They worked hard in their industry, took huge risks that paid off but just as easily might not have and now are being rewarded for their success only to have those who have done nothing demand their fair share.
You know what their fair share of a successful persons income is. Nothing - not one cent more then what they are required to pay under the current tax system requires. If they want to support their favorite charity then more power to them, but I am tired of the socialist of this country telling us to spread the wealth.
November 9, 2011 at 7:14 pm
Welfare programs have proved that if there is a buy in for medications (even a buck or two) that medications are used better and med compliance improves. You need to have some scratch in the game. Have a great day. God bless! PS. Obama is a socialist. Take from those that have and give to those that won’t.
November 9, 2011 at 7:13 pm
Dan! You make so many point that are only half true it is disturbing. You really need to read something other than the Huffington Post. A corporation is a group of people who have like interests and pool their money to do business.We have a progressive tax system now. Your serenade about not taxing the poor is ridiculous. We have over the past 40 years raised the level of money you must earn before you pay personal income tax that we are creating a class of people who think it is the governments responsibility to care for them from cradle to grave. It didnt work in Europe and it will not work here. I work hard , get an education and sacrifice to make my life and my families better. I work every day with people who think they should be supported by others and want me to work harder so they can sit on their behinds. Before you spout of that I am wrong you should know that I have been a social worker for 15 years. I see it first hand. I try to help people better themselves and MOST are more worried about drinking, drugs arent willing to sacrifice to get ahead. I watch the people waiting at my office for free health and dental care and notice they have these great tatoos costing hundreds or more and they frequently go outside to smoke. I remember my early twenties serving in the US army in Korea and patrolling the DMZ so I could earn money for my education. I remember supporting a family while going to college and working three jobs. The sacrifice that needs to be made will never happen under your socialist america. Many of the social programs you quoted are the reason we are 14 trillion in debt.We started paying people benefits who never paid in. People waste their money and rely on the govt to bail them out. And you think we should take more from those that become successful and give everyone else a pass. Page 2 contd
November 9, 2011 at 4:47 pm
(second page)
You are right there needs to be a minimum corporate tax. However, our corporations are not overtaxed. Corporations have been taxed at higher rates. The current 35% tax rate has been largely washed away by deductions. Corporations now pay the smallest percentage of total tax revenue than at any time in our history, and less than most developed countries.
It is ill-informed to assert the rich and corporations have a minimum tax. There are many of them that don’t pay any taxes, but they have received tax refunds…on no taxes ever paid in. That’s not only not fair, it seems criminal. The thousands of lobbyists hired by the rich and corporations have generally paid off. Tax burdens for the rich/corporations have been disproportionately reduced through lobbying and access, meaning they got their money’s worth. Face it, our Government is bought and paid for. That’s plain old capitalist CORRUPTION. It isn’t the poor that are corrupting our Government.
I think it is ignorant to assert that Obama is socialist. We are all socialists. That 401K plan you are so proud of is based on a socialsit principle. So is driving on public roads. So is a public education. You are even communicating over the internet perpetuated through a socialist principle. We are all socialists. It’s just that some people are in denial.
President Obama has worked to hold CEO’s, Wall Street, and others accountable. Of course Republicans have thwarted that at every turn. It sounds like you might have done that too. Obama has lost a lot of Wall Street and corporate contributors, but Obama does have a plurality of people with him.
All in all, we could be more patriotic if we were more willing to help other citizens, instead of a narcissistic obsession. We will all do far better if we look to float everyone’s boat here, instead of trying to crawl over dead bodies for just another buck.
November 9, 2011 at 4:35 pm
Well, David, David, David…you never answered my question about why you are so concerned about what the poor pay in taxes. I will explain why I feel corporations and rich people need to pay more.
First, the founder of economics, John Smith, stated in the later 1700’s that tax rates need to be progressive, with the rich paying a larger percentage. The obvious reason is that they can afford it. Also, the rich, when left with excessive income, end up bribing legislative leaders affecting taxation decisions. Also, the rich have government access the poor don’t. So, it makes sense the system be preloaded with an equalizer that diminishes the unfair advantage of the rich. And, for your information, John Smith wasn’t even close to a socialist.
Second, it makes little sense to tax away money from the poor needing it for subsistence. While you might be worried about your 401K, they are worried about survival. You know, according to Pavlov, meeting basic necessities of life are far more important than 401K and other investment concerns. It’s a little hard to be concerned about the long term, when you will be dead in the short term.
Third, it is too bad you have bought into the Mitt Romney definition of corporations. They are not people. They are not us. They were a legal contrivance to facilitate investment and minimize liability. I understand the greed driving people to gamble on stock and their hope it increases in value. However, the rich play both ends of the street, betting stocks go down as well. That’s what shorting is all about. So, many of those rich people and interchangeable corporations are also betting your stock falls on its face. You are dead wrong when you use the words “We are the corporations.” Corporations are a fake entity made up through law and not even dreamed of when the founders conceived our nation. If corporations were people, they could be jailed, executed, etc., but they’re not.
(continued in second post)
November 9, 2011 at 12:31 pm
Dan! Dan! Dan! I do agree that corporations must pay their fair share. When will you come over and agree that ALL citizens should pay their fair share? The problem with your argument is you use corporation and rich people as terms that are interchangeable. Corporations are us. My retirement fund at work is almost all stock in those terrible corporations. The largest stock in the retirement fund is EXXON. So we are the corporations. If we had a minimum tax for corporations it would be great. If you overtax as many corporations are then you reduce their value and my retirement and yours. The rich have a minimum tax rate and the corporations should also. However it tends to be the corporations run by liberals that pay the least tax. Where is your liberal/socialist President and why is he being a buddy to CEO’s like at GE instead of holding them accountable???
November 8, 2011 at 10:28 pm
David, David David, I suggest you be more concerned about the 30% of fortune 100 companies that pay no taxes. They have no excuse. They earned a collective $1.3 TRILLION in profits and did not pay a penny of tax. In fact, many of these companies received large subsidy checks for the Federal Government, even after paying no tax. In other words they paid NEGATIVE taxes. Look at GE’s case as an example.
While I read David’s concern about making people who hardly have enough money to take care of themselves, pay more taxes, I suggest he be more concerned about the people and corporations, who have way too much money, pay something close to their share of taxes.
It repulses me to hear people continually beat up on the poor, when the rich have evaded one of their big rationales for getting all their money…RESPONSIBILTY. They seem to accept no responsibility, but willingly take all the rewards. I think Marie Antoinette thought the same way?
I would still suggest David become better informed.
November 8, 2011 at 12:55 pm
Dan, Dan, Dan. Adjust your glasses. I mentioned social security tax (FICA). Stop drinking the Koolaid. Secondly, 47 percent of the people pay no federal income tax. That is a fact. Many of them receive tax money back in the form of the earned income credit so not only do they not pay federal income tax they get a refund on something they don’t pay. I stated that there was corporate tax, sales tax/levies, etc.. and federal personal income tax.47 percent of the people don’t pay federal persona income tax.When you have a tax system that excludes people from having to pay a certain tax although they get its benefits it is unfair. Justice is only justice when it is just for all.
November 8, 2011 at 10:00 am
I suggest that David become better informed. There is also payroll taxes, most of the time referred to as FICA contributions. Nearly everyone who works for wages or in self-employment pay them. There are also sales taxes. If you buy most anything you pay them.
While FICA TAXES as intended for a narrow purpose, if one just does a little research you will find that the considerable trust fund reserves have been fully borrowed out to the Federal Government to finance most everything.
State sales taxes fund all state expenses, just like incoem tax does.
All of the above are taxes, and most everyone pays them. It is a bunch of baloney that 47% of the people pay no taxes. Most everyone does. If readers want to limit/narrow the definition of taxes, then I thnk we could sufficiently narrow the taxes paid by the rich to say all rich people pay no taxes. I think it is childish to engage in these selective definitions.
November 8, 2011 at 9:49 am
Your article misses the point. The income tax is the vehicle which the federal govt continually uses to increase revenue. We conservatives all know that everyone pays some type of tax or levy. We also know that when one of the three main ways of raising revenue is unbalanced then it can be abused. Corporations pay taxes and pass in on to all of us.When less than half of the people pay income tax (not Social Security/Medicare tax)it is the easiest way for the masses to place the burdens of the country on a minority of the population. If we went to a flat tax or national sales tax as the only revenue source it would allow all people to make their decisions on an even playing field.
Dan Conner says:
December 3, 2011 at 12:25 pm
To inject “God” into the argument about rich people is laughable. I think “God” would throwup hearing people ratioanlize irrationable wealth as something “blessed by God.” I think Mike Downing might actually try something new, like reading the Bible. “God” and his son copiously rejected wealth as anything close to Godliness. In fact, Jesus said a rich man will no sooner inherit the kingdom of “God”{ than a camel go through the eye of a needle. I think there is a great ignorance of Christianity to assume “God” endorses great wealth. I think the Bible makes a better the story of God endorsing taking wealth away from people. “God” also elevates caring for the poor as a requirement for Christians. In other words, one cannot be a rich Christian who wants to withhold help and assitance for them. Instead, I believe the religiosity of wealth is a scheme of the rich to rationalize their wealth to the 99% who do not have it.
More importantly, the vast riches of such a few people take away money from the 99%. Much like the repetitive argument used by the right that there is only a static amount of tax revenues, the same argument then has to be used that there is only a static amount of income. And, since wages of the top 1% have increased 281% over the last 30 years, compared to the only 18% increase for the bottom 1/2, the rich have already robbed untold $billions from the general population. They make their money on the backs of everyone else.