WASHINGTON, D.C. — The nonprofit, nonpartisan Tax Analysts hosted a conference on Taxes and the Poor at the National Press Club in Washington, D.C. earlier today, taking a closer look at the "47 percent of Americans who pay no income tax."
Tax Analysts President and Publisher Christopher E. Bergin moderated the roundtable discussion, which featured speakers C. Eugene Steuerle, Institute Fellow at the Urban Institute; David Brunori, Executive Vice President of Tax Analysts; Scott A. Hodge, President of the Tax Foundation; and Chuck Marr, Director of Federal Tax Policy at the Center on Budget and Policy Priorities.
Addressing Governor Mitt Romney’s assertion that 47 percent of Americans pay no income tax, Bergin noted: "It's true that, in a typical year, about 40 percent of Americans don't pay federal income taxes. That's either because they don't make enough money or because we reduce their tax liability to zero by offering them a variety of tax credits . . . But of course, most of those taxpayers still pay Social Security and Medicare payroll taxes as well as a slew of state and local taxes.
"This begs an important question," Bergin suggested. "Should everyone pay at least some income tax as an obligation of citizenship?"
"Yes, I believe it is bad for our democracy to have so many Americans who don't have skin in the game," noted Hodge. "Today, an estimated 58 million tax filers paid no income tax after credits and deductions, that's 50 percent more than at end of the Clinton Administration. The growth of non-payers means that now more than half of Americans get more back from government than they pay. Despite Governor Romney's clumsy statement about the 47 percent, the reality is that neither side wants to talk about this honestly."
"Let's take an honest look at who the non-payers are," countered Marr. "They are the elderly. They are construction workers and nurses; they work in factories and restaurants. What do they all have in common? They work hard and they pay payroll taxes at a higher rate than the rest of us. I think the saddest part of Governor Romney's comment was when he said they don’t take personal responsibility. These are people who are working to lift their families out of poverty and to help their kids."
Brunori agreed and added that the poor pay more in relative terms than the wealthy to finance state government, particularly through the increasing use of excise taxes to influence behavior. "Today, state government raises 20 percent of total tax revenue from excise taxes: taxes on soda, cigarettes, alcohol, tanning salons, gasoline. These are extremely regressive and have the result of hammering the poor," Brunori noted. "We don't tax intangibles or real property. We don't tax the things that rich people buy a lot. Poor bear the brunt of excise taxes."
"We continue to debate the impact of small, moderate changes in the tax code, when we should be talking about the role and visibility of government as a whole," noted Steuerle. "I think the issue really comes down to what would happen if our tax system were more visible. If people could see more clearly what they are paying and what they are getting from government — which is impossible now with the proliferation of business taxes, hidden excise taxes and tax credits and much more — I think people would be more conservative and careful in what they ask from government."
This conference is part of a long-running series of roundtable discussions that Tax Analysts hosts several times a year on tax policy and administration. Last June, the focus was on Taxes and the Rich.
Media Notes: To receive a transcript of the conference or request an interview, please contact Genilson Brandao at 703-531-4810.
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