While President Barack Obama continues to hammer away at the runaway wealth of the top 1%, his 2012 GOP rivals appear to be more concerned with getting more money from the 47% — that is, the percentage of the population who doesn’t pay federal income tax.
Diverging from the “no new taxes” platform of traditional conservatives, some Republicans are rallying around the complaint that not enough people are paying taxes — an inversion of the Democrats’ “fairness” argument that claims the poorer half of Americans are getting a free ride on the backs of the 53% of patriots who do pay federal income taxes.
The “tax the poor” arguments are now starting to gain serious traction among conservatives as a response to the growing anti-Wall Street movement. Conservative blogger Erick Erickson recently launched a new “We Are The 53%” tumblr, riffing off of Occupy Wall Street’s “We Are The 99%” rallying cry.
2012 presidential hopefuls are now spreading the “everyone should pay taxes” gospel on the campaign trail. Michele Bachmann is using the 53% statistic to rally voters around her plan to “deep-six” the tax code. Rick Perry has similarly called for a fairer tax system, and writes in his book that he supports getting rid of the federal income tax. Ron Paul wants to abolish the IRS altogether.
But nobody takes the “fairness” argument as far as Herman Cain and his “9-9-9” tax plan, which would throw out the federal income tax code and replace it with 9% corporate tax, a 9% flat income tax, and a 9% federal sales tax.
The “9-9-9” plan has drawn praise from high-profile Republicans looking for a flat-tax champion, including House Budget Chair Paul Ryan. But Cain’s plan — and the 53% argument in general — ignores some key realities about the other 47%:
- Most people who don’t pay federal income tax are still paying payroll taxes to the federal government. Not to mention state and local income taxes, sales taxes, gas taxes and utilities taxes. In fact, the working poor tends to pay more taxes as a share of their income than the very rich.
- Most of the 47% are simply too poor to pay federal income tax — more than half make less than $30,000 a year.
- Cain’s tax plan would get rid of the popular tax deductions, including the mortgage interest deduction, the child tax credit, and the earned income tax credit responsible for about half of the 47% income tax reductions.
- Under the 9-9-9 plan, tens of millions of low income Americans would face higher taxes, while the highest tax brackets would see major tax cuts. Even Cain admits that some people with lower incomes will pay more under his plan.
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