Wednesday, January 21, 2009

Who Are These 40% of Americans Who Don't Pay Income Tax?

Republicans like to quote the statistic that 40% of Americans don't pay Federal income tax.

Congressman Buck McKeon brought up this talking point recently:
"It's not really so much a tax cut as a stimulus package," McKeon said "They (Democrats) want to give people who don't pay federal income taxes a check just so they'll spend it and that will then be a boom to the economy."

(Emphasis mine.)
What?!? Those people didn't pay income taxes, and now that liberal socialist Obama is going to give those good-for-nothings a check? That's outrageous! That's highway robbery! That's —

Wait a minute.

Who are all these people?

Buck doesn't mention the statistic, but the Republican talking point says it's 40% of Americans.

How can that possibly be?

Here's the trick: they don't count payroll tax.

You know, the money your employer takes out of your paycheck every two weeks and gives to the Federal government.

You thought that was income tax?

No, that's payroll tax. (Or what I like to call the Ronald Reagan Tax.)

That's right. If you're a lower-income or middle-class worker paying the 15.3% payroll tax, and you get a refund at the end of the year, or come out even, then you, my friend, are one of those 40% (actually, 38%) of Americans who "don't pay federal income taxes."

In which case, yes, President Obama wants to cut your taxes.

And Buck McKeon's not too happy about that.

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