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The Tax Hikes That Republicans Love

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Posted on Oct 16, 2011
Gage Skidmore (CC-BY-SA)

Republican presidential candidate Herman Cain has soared in the polls, thanks in part to a tax plan that would raise taxes on poor Americans while cutting rates for the wealthy.

By Joe Conason

From the tea parties to the corporate boardrooms to the presidential debate platforms, we hear a familiar droning whine about taxes—except the angry message is no longer simply that taxes are too high. Today, conservative politicians and pundits complain instead that some people, namely those too poor to owe federal income taxes, aren’t paying enough. So what if those people can scarcely sustain their families, like the millions of middle-class families doing slightly better but struggling, as well?

This is the Democratic “fairness” argument turned upside down, which may prove to have limited appeal. What will appeal to most Americans even less are the proposed Republican solutions, like a national sales tax. And what might surprise them is that the first president to expand tax relief for the working poor was that almighty Republican icon, Ronald Reagan, whose name is constantly invoked by politicians unworthy of his legacy.

However piously they cite the Gipper as their idol, the Republican candidates for president seem united in their desire to repeal the earned income tax credit, which he justly praised in 1986 as “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.”

Now, Republican politicians increasingly reject the earned income credit as an immoral form of “welfare,” because its provisions have helped to ensure that roughly 47 percent of Americans pay no federal income tax, with the poorest receiving a modest rebate, instead. That statistic has been distorted all too often into the false assertion, usually uttered on Fox News Channel or right-wing talk radio, that the poorer half of the nation’s population “pays no taxes.”

Of course the working poor pay lots of taxes. In fact, they tend to pay more as a share of their income than the very rich, plenty of whom do not work at all. The poor pay state and local income tax as well as sales taxes, gas taxes and utility taxes, but above all they pay Social Security and Medicare taxes on the very first dollar of income they earn (and on every dollar up to the $106,000 ceiling that shelters the income of higher earners). To suggest that the working poor receive government benefits without paying anything is a brazen lie.

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Aside from the earned income credit, there is another very basic reason why the working poor don’t pay income taxes. After decades of falling wages and rising inequality, they literally cannot afford it. As the noted economics reporter David Cay Johnston explained last April 15, the average annual income among the bottom half of American taxpayers was around $15,000. With the first $9,350 exempt from federal income tax for single people, a figure that rises to $18,700 for married couples, millions of households don’t earn enough to owe anything to the IRS.

At the same time, Johnston pointed out that many of the wealthiest families in the country also pay no taxes thanks to loopholes such as the “carried interest” provision, which Republicans fight ferociously to preserve against “socialist” demands that bankers and investors pay the same rate as their secretaries and janitors.

Although polls show that most Americans—including most Republican voters—strongly favor raising rates on the wealthiest taxpayers, the GOP leadership is sworn to prevent any such reform. Rather than close the grossest loopholes and deductions exploited by billionaires, Republican politicians want to punish all those families living large on $300 a week by taxing them more.

One way to do that—favored by House Budget Chairman Paul Ryan, R-Wis, and presidential candidate Herman Cain, among others—is to impose a national sales tax or value-added tax.

The result, as any tax expert could explain, would shift the national tax burden even further from the wealthy to the working poor and middle class. It is their form of class warfare. And unless the rates were much higher than proposed in Cain’s “9-9-9” plan or Ryan’s original budget, a sales tax would increase deficits and debt instead of reducing them.

Why millionaires like Ryan and Cain favor such schemes is obvious enough. What is far less obvious is why they can still pretend that they revere Reagan—or that they want to cut taxes for anybody except themselves.

Joe Conason is the editor in chief of NationalMemo.com.

© 2011 CREATORS.COM


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anaman51's avatar

By anaman51, October 18, 2011 at 8:35 pm Link to this comment

Every day that goes by I find one more reason to loathe the Republican Party. This, however, is not news. They’ve been robbing the workers for as long as there’s been taxation. Not once in all that time has the richest one percent ever paid anything close to a fair tax. And now they want to rob the working poor some more. I have to wonder how much of this they can actually pull off, year after year, before the so-far incredibly dull-witted voting public finally becomes outraged and gets them out of Congress. How many people do they have to shit on before the smell becomes too much to bear?

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oddsox's avatar

By oddsox, October 18, 2011 at 8:00 am Link to this comment

glider—
We agree on the current odds of 9-9-9 happening, even if Cain’s lottery-ticket chance of winning the Presidency pays off.

But this is how things get started. 

What were the odds of a Black President 20 years ago?  Or even 10?  I never had a glimmer about Obama until watching his keynote address at the 2004 Dem Convention.  When was he first on your radar?

Now there’s OWS.  Something good could still come of it.  My pet causes are
—campaign reform that eliminates corporate contributions.  Repeal Citizens United & limit political contributions to natural (breathing) US citizens only.
—Anti-trust action to break up the Too-Big-To-Fail banks and insurance companies.

Both longshots right now as well. 
But I’m not alone supporting these ideas. 
Their times will come.

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By glider, October 18, 2011 at 3:27 am Link to this comment

Hey Pat,

Guess what the biggest “Socialist” institution is that is hidden from your Fox News radar and that is costing you more tax dollars than everything you are so concerned over now.  It is called the Military Industrial Complex.  It is filled with Corporations, Persons, and Government Agencies living high on the hog on taxpayer money without any kind of free market price controls.  It is hog heaven, rationalized as protecting you from the terrorists that they are creating.  It is one great scam.  Wake Up little Suzie, Wake Up!

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By glider, October 18, 2011 at 3:12 am Link to this comment

Oddsox,

Nice post.  I like your basic concept of making some sort of x-x-x progressive tax that both simplifies and creates a fair system.  But of course nothing could be further from the reality of what Cain is seeking for the Elites.  Nonetheless, I would like to see something along the lines you suggest.  However, realize that one would be extremely wealthy if one had bet against such changes in the tax code ever occurring, that are proposed every presidential election cycle.  It is really a joke at this stage.  Watch the price of Intuit stock for an indication of an actual possibility for this coming to pass.  You really can be certain it ain’t going to happen.

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skimohawk's avatar

By skimohawk, October 17, 2011 at 7:59 pm Link to this comment

re: Pat:
“we dont want people telling us how to live our lives”

Yep! Good thing you’re not in need of an abortion or a license for your same-sex marriage.

“If socialism goes into place”

If? What were the bank bailouts if not corporate socialism?

The rest of your commentary is sound-bite drivel lifted right out of an AM talk-radio show.
Let me guess: Limbaugh or Hannity?

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By bluesman, October 17, 2011 at 5:48 pm Link to this comment

Jeffpc, that was awesome.

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By Pat, October 17, 2011 at 3:43 pm Link to this comment
(Unregistered commenter)

Others outside the 1% vote republican because we dont
want people telling us how to live our lives if I
want to spend til I am broke, or save til I am Trump
I don’t want Government telling me who I have to pay
money to in order to sit on their Duff. I give as
much of my income as I can to charities who give
people hand ups in times of need. I vote republican
because there are too many (not all) people living on
the social programs my taxes go to that have no
intentions of getting off of them because the jobs
they could get (due to being a drop out, or lazy bum)
would pay them less. Did they have an easy life
probably not. But too many people come from low to
middle class families (again not all) to say it is
impossible to move up in the tax brackets. I consider
this latter group those who receive and want hand
outs because they feel they were cheated as they
cannot accept responsibility for their own actions
and failures in life. Was Steve Jobs a known Liberal
/ Democrat a Harvard graduate trust fund baby? No he
and Woz started Apple in their Garage and now it is a
multi-billion dollar company. At least for the time
being Americans are limited in the success they can
achieve only by their ambitions and Drive. If
socialism goes into place what is the purpose of
working more only to have most if not all after a
certain income level taken away so those with less
ambition and drive can be “successful too”?? There
isnt one which is why you are seeing Corporations
hoard money as taxes go up (or are planned to) as
well as unemployment go up as jobs go over seas.
Companies are in business to stay in business and to
stay in business you must make money. To provide jobs
you have to know the money will stay with your
company and not go to feed the ever growing Slush
fund these taxes fund. It is simple there is a
difference between regulation (to avoid
discrimination and sexism aka equal rights and
fairness) and nationalization of the private sector
and I am for the former. If you are for the latter
move to Russia or China

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oddsox's avatar

By oddsox, October 17, 2011 at 3:13 pm Link to this comment

9-9-9 PROGRESSIVE:
We can turn 9-9-9 to a progressive system very simply.
And simplicity is its greatest virtue.

1) 9% sales tax: exclude groceries, meds, rents, utilities.
That’s where the poor spend most of their dollars.
And remember, at the same time, we’re eliminating the regressive payroll taxes here.
Taxing consumption instead of labor is a fundamental improvement to our tax system.

2) Exempt the first $20k from the 9% income tax.
Especially helpful to minimum wage workers, temps and youth.

3) Exempt the first $20k from the 9% corporate tax.
Now you’re helping small business.
That’s where most new jobs come from.

Simplicity of 9-9-9 also affords transparency.
Simplicity makes it tough to sneak in pet exemptions or increases.
Unlike under our current tax code, going from 9-9-9 to 10-10-10 would be tough without everybody noticing.

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oddsox's avatar

By oddsox, October 17, 2011 at 2:51 pm Link to this comment

“To suggest that the working poor receive government benefits without paying anything is a brazen lie.”
—JC

Under Cain’s 9-9-9 plan, the 9% sales tax (a tax on consumption) would replace payroll taxes (taxes on labor).

...so to suggest the 9% sales tax would be implemented without the concurrant elimination of payroll taxes is a brazen ... let’s be kind and say “oversight.”

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By James, October 17, 2011 at 11:11 am Link to this comment
(Unregistered commenter)

I don’t understand this logic.  The federal budget spending 1.6 trillion dollars more than it is taking in.  The biggest culprits are social programs (medicare, medicaid, social security) and military spending.  These programs were created in a way that their growth is unsustainable.  If fact, when the government looks at deficit spending, it ignores the big IOU we owe social security. 

This talk about taxing the rich and getting rid of the loopholes are small potatoes compared to what needs to be done.  Congress is talking about 10 trillion dollar cut in 10 years.  We need bigger than that to bring balance back to our spending. 

Government needs to cut back to a manageable size, responsibilities it used to handle needs to be pushed back to the states, and we need to get out of and stop getting into wars.  We will need to do some major cutting to our social programs and military budgets, probably get rid of a cabinet position or two and raise some taxes across the board, but most importantly we need to get American innovating again.  We need to roll back some changes to our financial community that was made in the nineties and make it more American and American-worker-centric and not global-centric.  We need our schools and communities praising encouraging entrepreneurship and government needs be an undo burden on them. We need to rebuild and reinvigorate small business in America. 

Until we are willing to have these types of conversions, it won’t matter who we elect.  Neither party will be able to get anything meaningful done.  It will be smoke and mirror politics and leading by distraction.

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By John Steinsvold, October 17, 2011 at 10:52 am Link to this comment

An Alternative to Capitalism (if the people knew
about it, they would demand it)

Several decades ago, Margaret Thatcher claimed:
“There is no alternative”. She was referring to
capitalism. Today, this negative attitude still
persists.

I would like to offer an alternative to capitalism
for the American people to consider. Please click on
the following link. It will take you to an essay
titled: “Home of the Brave?” which was published by
the Athenaeum Library of Philosophy:

http://evans-
experientialism.freewebspace.com/steinsvold.htm

John Steinsvold

Perhaps in time the so-called dark ages will be
thought of as including our own.
—Georg C. Lichtenberg

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By Laurie Bowen, October 17, 2011 at 10:46 am Link to this comment
(Unregistered commenter)

The 10% tithe used to be the tax of choice until “Jesus” observed the “widows mite” paradox . . . . the 999 plan is a replay and will further suffer the average “citizen”.

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By Basoflakes, October 17, 2011 at 10:25 am Link to this comment

Yes, a blind person can see that 9-9-9, which will evolve into a 23% National Sales Tax, does nothing but futher tax lower and middle income families and will drive the recession even further along.

What is needed is trumpeters on the media circuit giving simple, examples.  I did my 2010 taxes with the 9-9-9 in place and will pay $2000 more.

Come on media, come on Rachel, Lawrence, Ed, put out simple examples of single and families making between poverty level and say $50,000 and how they will all pay more under 9-9-9, and eventually the Fair Tax.

And please, some one in media - read Cain’s site - his plan is:
1.) Reduce maximum tax rate to 27%;
2.) Remove the existing tax code and replace it with 9-9-9;
3.) Replace 9-9-9 with the Fair Tax - Read The Fair Tax Act on live TV.

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By Rixar13, October 17, 2011 at 6:25 am Link to this comment

It’s time to sweep the GOP from office… wink ;-(

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skimohawk's avatar

By skimohawk, October 17, 2011 at 12:57 am Link to this comment

re OldManCA: “Why are people deluded by the Republicans?”

Why are they deluded by the Democrats?
Both parties are owned and controlled by corporate interests.
Why are they deluded by the “major media”? They’re owned by the same people.

They’re deluded because they can’t bring themselves to accept that they’re being lied to. Everybody wants to be able to believe in something, be that something Jesus or Buddha or that your government gives a damn about your welfare.
The trick is to make the lie big enough that people will refuse to believe it’s a lie. Like, say, “9-11” or “trickle-down economics”.

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By diamond, October 17, 2011 at 12:01 am Link to this comment

For heaven’s sake! Haven’t you worked it out yet? The Republicans believe in reverse socialism, where you tax the poor so you can give socialism to the rich. The rich in America get subsidized and get every perk going while the poor have to pay every cent of their taxes so that the system which disadvantages nearly 80% of the population can continue. The rich get socialism, the poor get free market economics and libertarian hokum. This system is rare, outside of various dictatorships and banana republics around the world.

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By jeffpc, October 16, 2011 at 10:40 pm Link to this comment

Tax the starving more and me less, so that I may buy 25 yo scotch rather than the 20 yo swill I am forced to purchase now, they will only waste it in on booze anyhow.  Tax the destitute more and me less, so that I may buy imported pure water rather than the polluted fracking rubbish they and their children drink from their water taps. Tax the poor more and me less, so that I may have more Armani suits and they less shelter against the cold wind.  Tax the debt laden more and me less, so that I may leave more millions to my privately tutored children and they leave naught but debt to theirs.  For they and their children are undeserving, lazy, ungrateful, stupid, ugly, weak, smelly, and a drain on humanity…a drain on us captains of society. How will they disappear if we keep gifting them health care and food stamps? Cut these things and tax me less, so that I may have another Porsche and another Cadillac.

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By OldManCA, October 16, 2011 at 9:46 pm Link to this comment

Why are people deluded by the Republicans?

In a rational world only the greediest of the ultra-rich would find it in their
self-intreset to vote Republican. Is the electorate so easily duped?  Republicans
should not be able to get enough votes to run third in any given election as
their policies only support the 1% of the population at the top of the income
brackets.

Why can’t the Democrats dominate the elections until the Republicans start
caring about the other 99%? 

Is it Democrat incompetence (Lord knows there is plenty of that), Republican
control of major media, or something else.

I am at a stumped as to why anyone other than the top 1% (and not even all of
that group) would vote Republican.

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By glider, October 16, 2011 at 8:46 pm Link to this comment

The complexity of the tax code and the ambiguity of human language provides rich fodder for these con men/politicians.  Outside of the desire to regulate personal behavior to be sufficiently Christian, there is not a single Republican political position that can not be distilled down to a mission of preserving and enhancing elite wealth.  That is the party’s reason for being.  These guy’s are elite class’s front line warriors.  Some time ago Nader wrote an “i give up” book whose theme was that our only hope was that at some point a certain benevolence of the rich would “save us”.  Judging by these characters that ain’t going to happen. Currently, even in the face of a possible nascent revolutionary uprising these people are arguing for an acceleration of injustices.  It seems more likely that the only thing that will blunt their onslaught will be a fear for their own safety.

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Octopodian's avatar

By Octopodian, October 16, 2011 at 8:38 pm Link to this comment

I’m not sayin’ he’s the Anti-Christ or anything, but 999 turned upside down is… just sayin’.

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By Rodney, October 16, 2011 at 5:49 pm Link to this comment
(Unregistered commenter)

To the Republicans the slaves earn too much money.
From the 1600’s to 1863 those same folks did fine
without having all that extra money. They yearn to
return those same folks back to the good ole days. They
have come to hake their country back. Back to 1863!

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