Tag Archives: taxes

Sophistry

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The Oxford English Dictionary defines “sophistry” as “the use of clever but false arguments, especially with the intention of deceiving”.

Consider, for example, the statement on Mitt Romney’s official website that says he wants to “make permanent, across-the-board 20 percent cut in marginal (income tax) rates”.

So if you make a lot of money and the last dollar you earn is now taxed at a rate of 35%, your new, lower rate will be 28%. That will lower your taxes by quite a large amount, especially if you earn a million dollars or more.

If you don’t make so much money, and your last dollar is taxed at a rate of 25%, your new rate will be 20%. Your marginal rate will go down by 5%. Not bad, but the high earner’s rate will go down by 7%. That’s how percentages work.

It certainly sounds like Romney is advocating a big tax cut for the highest earners, bigger as both a percentage of income and as a dollar amount.

At the last debate, however, Governor Romney said: “The top 5 percent will continue to pay 60 percent, as they do today. I’m not looking to cut taxes for wealthy people. I am looking to cut taxes for middle-income people.”

Well, if he’s not looking to cut taxes for wealthy people, he’s made a grievous error.

But wait — the top 5% will continue to pay 60% of all income taxes! Doesn’t that mean that the high earners aren’t getting a tax cut at all?

Of course not. Since the total amount of taxes being paid will go down, the top 5% will still pay 60% of that smaller total. At the same time, they will receive a big tax cut on their “earned” income, much bigger in fact than low earners.

As Bill Clinton said today, someone running for President thinks we’re dumb. No surprise, it’s Mitt Romney, sophist.

Big Science, Low Taxes

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The physicist Steven Weinberg wrote an article in the New York Review of Books a few months ago about “big science” — the kind of science that requires large amounts of money. The two main examples of such science are particle physics and cosmology, the sciences of the very small and the very large. In each case, scientific progress has made the problems to be investigated more difficult and more expensive. One of the stories he tells is how concern over federal spending resulted in the death of the Superconducting Super Collider in the early 90s.

Instead of simply calling for the government to devote more money to particle accelerators and space-based telescopes, however, Weinberg puts spending on big science in the context of overall government spending and taxation.

In the last part of his article, he calls attention to the need for more spending on a number of important priorities (education, infrastructure, drug  treatment, patent inspectors, regulation of the financial industry, etc., etc.). Professor Weinberg concludes:

“In fact, many of these other responsibilities of government have been treated worse in the present Congress than science….It seems to me that what is really needed is not more special pleading for one or another particular public good, but for all the people who care about these things to unite in restoring higher and more progressive tax rates, especially on investment income. I am not an economist, but I talk to economists, and I gather that dollar for dollar, government spending stimulates the economy more than tax cuts. It is simply a fallacy to say that we cannot afford increased government spending. But given the anti-tax mania that seems to be gripping the public, views like these are political poison. This is the real crisis, and not just for science.”

The anti-tax mania isn’t gripping the public as a whole, but he makes an excellent point.

http://www.nybooks.com/articles/archives/2012/may/10/crisis-big-science/?page=1

Yet More Background on What Romney Said

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From an article by Ramesh Ponnaru in the National Review Online:

“The Tax Foundation has calculated the percentage of filers in each state who pay income tax. The ten states with the highest number of non-payers are a strongly Republican bunch: Eight of them went for John McCain in 2008, and nine of them have Republican governors.”

http://www.nationalreview.com/articles/283265/freeloader-myth-ramesh-ponnuru

Obviously, some people are very confused. And some people are making stuff up. The red states below had the highest percentages of people filing Federal income tax returns but not paying any income tax. The blue states had the lowest percentages. 

nonpayers.banner.taxfound

The Background to What Romney Said

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Ezra Klein of the Washington Post responds to Romney’s remarks:

“83 percent of those not paying federal income taxes are either working and paying payroll taxes or they’re elderly and Romney is promising to protect their benefits. The remainder, by and large, aren’t paying federal income or payroll taxes because they’re unemployed.”

And why don’t many working people end up owing Federal income tax?

“Part of the reason so many Americans don’t pay federal income taxes is that Republicans have passed a series of very large tax cuts that wiped out the income-tax liability for many Americans. That’s why, when you look at graphs of the percent of Americans who don’t pay income taxes, you see huge jumps after Ronald Reagan’s 1986 tax reform and George W. Bush’s 2001 and 2003 tax cuts. So whenever you hear that half of Americans don’t pay federal income taxes, remember: Ronald Reagan and George W. Bush helped build that.”

Klein points out that some of the tax cuts for lower income people were adopted to make tax cuts for higher income people more politically acceptable. Now, however, the Republicans are arguing that people who don’t owe federal income tax are parasites who don’t deserve government benefits:

“Republicans have become outraged over the predictable effect of tax cuts they passed and are using that outrage as the justification for an agenda that further cuts taxes on the rich and pays for it by cutting social services for the non-rich.”

http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/17/romneys-theory-of-the-taker-class-and-why-it-matters/

What Romney Says When We’re Not Listening

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Somebody secretly filmed Romney talking behind closed doors at a fundraiser. He thinks that half of us are freeloaders:

“There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax….My job is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.”

So being certain to vote for Obama is the same as not earning enough money to owe Federal income tax (while paying other taxes, like Social Security, Medicare and sales taxes), which is the same as not taking responsibility for your life. I wonder what the waitresses and bus boys were thinking while this guy was talking.

http://www.motherjones.com/politics/2012/09/secret-video-romney-private-fundraiser