Tuesday, September 29, 2009

Untold Story: Regressive Taxation, State And Local

By Manifesto Joe

Debates about taxes tend to be dominated by federal income tax policy. That in itself has become a scandal because of myriad corporate and personal tax dodges. But it ignores what lies at the base of taxation in America. At the state and local levels, taxes hit the poor and the working class hardest, in terms of percentage of income.

My home state of Texas has a special history of this. Sales taxes, user fees and other levies are mostly directed at people with lower incomes. Courtesy of state Rep. Lon Burnam, D-Fort Worth, here are some recent statistics:

State and Local Taxes as a Percentage of Household Income in Texas

Over $109,182: 4.7 percent

$69,614 to $109,182: 6.0 percent

$45,271 to $69,614: 6.4 percent

$24,899 to $45,271: 7.6 percent

Under $24,899: 12.8 percent

Source: The Center for Public Policy Priorities, May 2008


If you were to examine all the states, it might even get worse in some of them. In Texas, most groceries are exempt from sales taxes. I lived in Oklahoma for a while, and there, NOTHING is exempt from the sales tax.

The next time you encounter some anus-head doing the Rush Lardbaugh talking points about how the rich are so oppressed with their income tax burden, hit them with some of this. You won't change their "minds," but you might get the pleasure of seeing them stammer and look confused for just a moment.

Manifesto Joe Is An Underground Writer Living In Texas.

6 comments:

SJ said...

@Manifesto Joe,
---exactly.
It should also be pointed out to Rush Limbaugh that the Rich got an 8 cent tax break during the Clinton years, and another 6 cent tax break off every dollar of income during George W Bush years.
It's disgusting.
Working people on average pay 30% of their wages to run the country while the Rich only pay around 15% of their "wages?"

--And for their trouble?
The working people of America also fight the nation's wars and get to fight for basic needs when they come back from combat.

Oh yeah, that's real American all right.
-SJ

Manifesto Joe said...

An unfortunate thing is that most people's eyes glaze over when you try to discuss taxes with them.

And then, there are those who have been demagogued so badly on the issue that they are shockingly ignorant about it.

Back when Steve Forbes was running for president around '95-96, he was floating that "flat tax" notion of his. What a Trojan horse that was. I was talking one day to a man, a middle-aged small-business owner, and he said he thought Forbes had a great idea there. I pointed out that under the Forbes "flat tax," the rate for income from interest and dividends would be 0%.

This guy looked a little stunned -- then after a moment, said, "You're right."

This information was available from the MSM, but you have to pay very close attention, closer than any typical American pays.

Jack Jodell said...

My blood boils when I hear conservatives and Republicans piss and moan about taxes. The wealthy are NOT getting penalized with heavy taxes the way they claim. In fact, in the past 50 years, the tax burden has dramatically shifted FROM then onto middle and lower income brackets. The top rate for the highest income level stood at a whopping 91% in 1959. This was dropped to 70% in 1965; to 50% in 1982; and to 28% in 1988. Bush I raised it again to 31% in 1991, and conservatives howled. They screamed like they were Gitmo torture victims when Clinton raised it again in 1993 to 39.6%, and then Bush II dropped it to 35% in 2003, where it sits today. The wealthy and even the upper middle class have absolutely nothing to cry about today when it comes to taxes, but cry they do anyway even though their tax rates are far, FAR lower than they were 30 to 50 years ago, and especially when compared with tax rates in Europe and even Canada. On the other hand, working, lower, and middle classs Americans should be out rampaging with tomahawks over the way the tax burden has been shoved steadily onto THEM over the past 5 decades, especially now that their incomes are basically frozen. By the way, this info is easily verifiable by going to http://www.truthandpolitics.org/top-rates.php. Happy searching, crybaby tax whining conservatives!

Jack Jodell said...

Another thought: it seems that big money conservatives want to avail themselves of all the benefits government has to offer, such as police, fire, roads and highways, a military to protect them, the postal service, etc. Those self-centered people just don't want to pay for any of it. Instead, they actually be;ieve, as the arrogant Leona Helmsley did, that taxes are "for the little people." It is infuriating to see their preference for flat taxes and sales taxes, which create a far bigger sting among poor and working people than it is for them. It is also maddening, as you point out, to see them set up the tax system so thatits byrden falls more heavily on those with lesser incomes.

SJ said...

@Manifesto Joe & Jack,
I've lately begun to think it's because it's glossed over in schools. Kids are taught how to compute taxes on the dollar, but no one goes into what taxes actually pay for today; the road that carries them to school and the school itself; -the physical elements of the country they see around them. Maybe if the curriculum on history focused more on what taxes actually buy throughout the nation's history instead of just celebrating the fever that gripped the colonies and made them revolt, they wouldn't see taxes as just something paid out as they become adults, they might even wonder why some people aren't paying their proportionate share.
Instead we let today's news media and punditocracy inform them about it all.
-SJ

Marc McDonald said...

What often gets overlooked in the tax debate is the fact that tax brackets are really not that important.

What's important is the effective tax rate that people pay. Often (particularly for the rich), there's an enormous difference between a person's tax bracket rate and the rate that he actually pays.

A good example are corporate taxes. In the 2008 campaign, McCain was actually correct when he said that U.S. corporate tax rates are the highest in the First World.

What McCain didn't mention is that the ACTUAL taxes that U.S. corporations pay are by far the lowest in the First World. In fact, because of loopholes, most U.S. corporations pay zero tax.