25 April 2011

Funny Math

Glutton for punishment that I am, I was looking over The Universe's Smartest Man's blog and stumbled upon this little gem, titled Zombie Tax Lies (the idea being that the concept should be dead, but it keeps coming back, get it?).

His ire was gotten up, or rekindled anyway, by this post by someone named Jonathan Chait and this little ditty put out by an organization known as Citizens for Tax Justice.

Here's the re-cap: usually about tax time every year, people point out that the "wealthy" pay more in taxes; other people point out that, 1) that's only fair, because the wealthy steal their wealth from the surplus value of the laborers that they exploit and, 2) the wealthy really don't pay any taxes and really should be paying much much more, and the lying cheating bastards really should feel honored to do so.

The Smartest Man in the Universe, Mr. Chait and the Citizens for Tax Justice all fall into the "other people" category, and all throw out the same tortured logic to prove their point.

They do not contest that the top 1% of earners pay 38% of the take on federal income taxes, though none of them repeat the exact statistic because it would rightly disgust anyone of sound mind that 1% of the population would pay more than a third of the income tax collected. They all use the dodge that the federal income tax isn't the only tax paid. That state taxes and the "contributions" made to social security and medicare are regressive and therefore spread the tax burden more equitably...which of course justifies their belief that the rich aren't paying enough and should pay more.

On this, two points. First, the way progressives, liberal, communists, socialists, Marxists and Leninists use the word "regressive" when it come to taxation is fatuous. The thinking that someone making $20,000/year and pays 12.5% in social security taxes pays a higher burden than someone making $100,000/year and pays 12.5% in social security tax is regressive completely disregards what regressive taxes are: a decreasing rate as the base increases. Flat taxes are not regressive. Now, if in the above example the person making $20,000/year pays a $1,000 tax and the person making $100,000 pays a $1,000 tax, that would be regressive. People making more than $109,000 don't have to pay social security and medicare taxes, er, sorry, contributions because the benefits paid out are also capped.

Second, the federal budget is bigger than state and local budgets. Paying 38% of $1,366,241,000,000, which is $519,171,580,000*, is a whole lot more than whatever is paid in state taxes by the two lowest quintiles of income distribution. In the chart (above) that accompanies the three articles by the three "make them pay more" group, the top three quintiles still pay more as a percentage of all tax collected than they collect in total income, even with them gerrymandering the numbers in favor of their own argument.

No kidding. This is the evidence used to rebut the argument that the rich don't pay too much in taxes. This is the zombie that the Smartest Man in the Universe, for all of his intelligence, just can't slay. Why? Because you, you dolt, just aren't as smart as he and his friends are.

*numbers are from 2007, via wikipedia here.

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