TAXES - Myths, Lies, & Deceptions

Today is Tax Day, and the tax forms that have been piling up on desks (or Internet browsers, thanks to technology) across the country are due. Taxes are complicated, unpopular, and fund a variety of government programs. Because of their unpopularity, and because taxpayers have naturally different opinions on the programs taxes fund, taxes have long been an easy issue for politicians, the wealthy, and corporate-funded front groups to demagogue and spread falsehoods about. Because they are unpopular, they are a valuable political tool, and candidates have used "No New Taxes" pledges or accusations that an opponent wants to raise taxes to gain electoral advantages since the very beginnings of American politics. There are plenty of myths about taxes: who pays them, who doesn't, who has raised them, who hasn't, what your tax dollars fund, and what they don't. Tax Day seems an appropriate time to address some of the misconceptions that have been continuously injected into the debate about taxes.

MYTH #1 -- AMERICANS ARE UNHAPPY WITH THEM: Over the past two years, the Tea ("Taxed Enough Already") Party and other "grassroots" movements have helped spread the idea that Americans are unhappy with how much they have to pay in taxes each year. But recent polls have shown that the majority of Americans actually think their annual tax payments are fair. An AP poll found that only 46 percent of Americans believe they pay too much in taxes, while a Fox News poll pegged that numbereven lower, at 43 percent. No one likes to pay taxes, but as these polls show, Americans understand that they are necessary. Taxes pay for the military, national parks, law enforcement agencies, infrastructure maintenance, repair and improvements, social programs and a host of other programs that go unnoticed in our daily lives. But despite the intense anti-tax rhetoric of the Tea Party and affiliated groups, these polls confirm that Americans understand why they pay taxes, and believe that they are paying their fair share when they do.

MYTH #2 -- THE WORKING POOR DON'T PAY THEM: One of the right's widely-used talking points over the last few years is that low-income Americans don't pay taxes, and that the rich carry an unduly heavy tax burden. Citing a study by the Tax Policy Center, politicians and pundits have repeated the debunked idea that "47 percent of Americans don't pay any taxes." In fact, while millions of poor Americans don't make enough to pay a significant amount of federal income taxes, the working poor still contribute through federal payroll taxes, and according to the Institute on Taxation and Economic Policy, they carry a heavier burden of state and local taxes than the rich in every state except Vermont. In Alabama, for example, low-income families (which make less than $13,000) pay 11 percent of their income in state and local taxes, while those making more than $229,000 pay just four percent. And while taxes on lower- and middle-income Americans have increased over the past 30 years, they dropped for the ultra-wealthy. The 400 highest income Americans saw their rates drop to 16.6 percent in 2007, while the majority of Americans paid 22.5 percent. Because of the Bush tax cuts for the wealthy and a variety of loopholes and legal maneuvers, many of the very richest Americans pay hardly any taxes at all. The same can be said for the nation's largest corporations, such as GE and Goldman Sachs, which use their own loopholes to either drastically lower the amount of taxes they pay or to avoid paying any taxes whatsoever. The result: More of the tax burden is shifted to low- and middle-income Americans, who pay an extra $434 a year to make up for lost tax revenue from tax-dodging individuals and corporations.

MYTH #3 -- OBAMA HAS RAISED THEM: One of the main reasons for the Tea Party's rise in 2009 was the idea that Americans were paying more taxes under President Obama than they had under former President George W. Bush. In February, Obama explained to Fox News' Bill O'Reilly, "I didn't raise taxes once. I lowered taxes over the last two years." The Congressional Budget Office backed up that claim, revealing that in 2011, Americans would be paying less in federal taxes than they did under Bush for a third consecutive year, "thanks to a growing number of tax breaks for the wealthy and poor alike." Obama's Making Work Pay Credit will increase refunds for millions of Americans yet again, and the stimulus bill passed in 2009 included tax credits for college students, first-time home buyers, working families and the poor. In 2010, Obama signed a temporary extension of the Bush-era tax cuts, keeping federal tax brackets from reverting to Clinton-era levels. As a result, federal income taxes under Obama are the lowest they have been since 1950, proving that the right's widely-held belief that Obama is out to raise taxes on each and every American citizen is patently false.