Five Myths about the 47 Percent

Each Sunday, the Washington Post runs an opinion piece debunking five myths about a topic in the news. Bill Gale and I penned today’s, addressing five myths about the 47 percent of households who pay no federal income tax in any given year. Here is the Cliff Notes version:

Myth #1: Forty-seven percent of Americans don’t pay taxes. “This oft-heard claim ignores the many other taxes Americans encounter in their daily lives.”

Myth #2: Members of the 47 percent will never pay federal income taxes. In fact, households often move in and out of the 47 percent, primarily because of changes in their income.

Myth #3: Many high-income people game the system to pay no income tax. Gaming certainly happens, but “it has essentially nothing to do with who does and doesn’t pay income taxes … the vast majority of people who pay no federal income tax have low earnings, are elderly or have children at home.” They aren’t scheming millionaires.

Myth #4: The 47 percent vote Democratic. Many low-income folks don’t vote at all; many seniors vote Republican.

Myth #5: Tax increases are the only way to bring more of these households onto the [income] tax rolls. Rolling back tax breaks like the child credit would, of course, be one way to reduce the ranks of the 47 percent, if one were so inclined. But don’t forget economic growth. Faster job creation and growing incomes would help move some households up the income scale and out of the 47 percent.

The full version is here.