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The Poor Pay No Taxes Myth


Poverty (Photo credit: Teo's photo)

This is a trope you continue to hear from mentally diminished Fox parrots.

They argue that since the middle class and wealthy and pay income taxes, all those poor people who pay no income taxes are getting a free ride.


A new study of state taxes from the Corporation for Enterprise Development  shows that the poor pay a much higher percentage of their income in taxes — sometimes six times more than the parasitic caste (thanks David Brin) that makes up the top 1%.

The Assets and Opportunity Scorecard breaks down by state what the tax rate burden is for both the top 1% and the poorest 20%.

Kevin Drum at Mother Jones has taken the data and created an enlightening table:

Soaking the Poor, State by State

The most fair places to live? Washington, DC, Vermont, South Carolina and New York.

The most unequal? Nevada, South Dakota, Florida and Washington state.

On average (Mississippi) the poor pay twice as much in all taxes than the extremely wealthy.


February 7, 2012 Posted by | Uncategorized | , , , , , , , | Leave a comment

Failed Economic Arguments Won’t Die

Any American who is thinking about voting in November should have a firm grasp of the economic arguments the candidates are making.

The Republicans are all pushing supply-side, top-down economics, which HAS NEVER BEEN SHOWN TO WORK.

Voodoo economics is alive and well in American, despite failing to prevent or curtail the current downturn.

The wealthy are taxed less than they have been in my lifetime, and none of the “trickle-down” benefits have yet made an appearence.

President Obama is firmly in the Keynesian camp, and despite some acknowledged problems, this was the model that got us out of the last Depression and paved the way for a half century of prosperity in America.

David Brin lays it all out in a brilliant post:

Must the Rich be Lured into Investing? Who are the Real “Job Creators?”

Also see his:  A Primer on Supply-Side vs Demand-Side Economics

My favorite bit of irony from Brin’s primer is that Supply-Side Economics (SSE) is a Marxist idea:

Interestingly, the most famous proponent of this approach was Karl Marx, who maintained that the owner-capitalist class propels industrial development by re-investing profits in plants and equipment, thus building up society’s capital stock and the means of production. SSE is, in that respect, an entirely Marxist theory.

Of course, Marx then looked farther ahead. He hypothesized an eventual “completion” of this capital-formation process, a final phase when all the factories are finished – an image we now find ludicrous, since productive capacity must be updated at an accelerating pace. (Hence there will always be a need for capitalists.) Still, it seems kind of sad that SSE supporters won’t ever acknowledge this fundamental root of their theory. They do not study their ideological forebear. Nor do they try, as Marx did, to extrapolate where their prescription may eventually lead.

In the new post on the investment incentive of cutting taxes on the wealthy, Brin does a lengthy takedown of the underpinnings of SSE

Karl Marx (1818-1883)

Image via Wikipedia - Father of Supply Side

and compares it to the actual success of the Keynesian approach:

What we need in this depression – and by most of the metrics it has been a depression, not a recession – what’s needed is what ended the last one. The circulation of high velocity money that goes hand to hand very quickly, generating economic activity with every transaction. Not the exact opposite, money that sits in portfolios, not helping capitalize industry but simply fostering the aggrandizement of a parasitic caste. One of the founding father of free enterprise – Adam Smith himself – quite despised.

“All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind. As soon, therefore, as they could find a method of consuming the whole value of their rents themselves, they had no disposition to share them with any other persons.”

So, for some reason we have an uphill struggle against proponents of an idea that has failed spectacularly on many occasions. Meanwhile a tried and true approach to getting the economy roaring is mocked and relagated to the status of “liberal fantasy”.

With the current example of failed European austerity policies (in the place of government spending), you would think that most people who pay attention would begin to understand that the “parasitic caste” that Brin describes is pulling the wool over people’s eyes.


February 7, 2012 Posted by | Uncategorized | , , , , , , , | Leave a comment