Disingenuity without Limit
Tom Delay in the NYT: “To me, it’s a little difficult to give tax relief to people that don’t pay income tax.”
First, in all the stories I’ve read, most of the excluded are low income people who do pay income taxes. The current excluded group includes families making $10,500 to $26,625–the upper half of that range surely pays income taxes. Moreover, rampant deficit spending lead to the raiding of the Social Security “lockbox”, so payroll taxes and income taxes are essentially fungible (they basically are, anyway). And everybody with a job pays “payroll taxes”, though many of the working poor do not pay “income taxes”. So DeLay, and Republicans in general, are always careful to preface “tax” with the word “income”, whenever they talk about only being able to cut [income] taxes for those who pay them.
This is an important issue that everyone needs to be completely clear on, because it is widely used by Republicans to justify regressive tax cuts. Take a look at your pay stub. Everything that says something like “Fed Med” or “Medicare” or “OASDI” or “Social Security” is payroll tax. I’m fairly certain–commenters will fact check me–that nothing Bush has done in any tax cut plan has reduced payroll taxes. Payroll taxes are regressive, meaning that you pay less in percentage terms as your income goes up, because Social Security taxes are only applied to your first $85k of income. If you make $85k, you pay 6.2% of your income in SS taxes; if you make $170k, then you pay 3.1% of your income in SS taxes, and so forth. Back to your pay stub: look at the part with a name like “Federal Withholding”. This, and only this, is the amount DeLay is talking about when he says “Income Tax”. If you make under $40 thousand a year, depending on your family status, the part DeLay is not talking about (payroll) is probably bigger than the part he is talking about (income).
That said, I’m a bit surprised that he’s holding out on this. I figured the plan was to hit the $350 target, via the chicanery of sunsets, exclude popular taxes, and then force the Democrats and moderate Republicans to insist on inserting more tax cuts. But, as the WSJ editorial page revealed last fall, it’s important to keep taxing the poor, so that they will politically support further tax cuts.
UPDATE: Jesse of Pandagon has more.