Federal Budget

The messaging on who pays the federal income tax has become a rallying cry for those on the right. Talk radio hosts and the Republican presidential candidates are continually railing against the “non achievers.”They frequently drop the federal income tax identification to imply that 50% of Americans pay no taxes.

The Tax Policy Center estimates that 46% of households will have no federal income tax liability in 2011. Just who are these folks who don’t pay federal income taxes?  22% are people who live on Social Security, which is exempt from federal income taxes. 50% are folks who don’t earn enough income to pay federal income taxes (For example, a family of four making earning less than $26,400 will pay no federal income tax this year because their $11,600 standard deduction and four exemptions of $3,700 each reduce their taxable income to zero.)  The other 25% are people lucky enough to find loopholes that negate their tax liability or people who use tax credits and the earned income tax credit to lower their tax bills. Only a small percentage of the wealthiest tax payers pay no federal income taxes, but they are able to lower their bills significantly. According to Roberton Williams writing for Forbes in July, “It’s also important to recognize that while tax expenditures push many people off the income tax rolls, they provide much larger benefits to higher-income households than to others, measured both in dollar value and as a share of income.”

All Americans- legal, illegal, rich, or poor- pay taxes. They may pay any or all of these: state income taxes, state and local sales taxes, payroll taxes, property taxes, personal property taxes, federal income taxes, and excise or franchise taxes. According to Who Pays, an analysis by the Institute on Economic and Tax Policy, in every state, low income people pay a higher percentage of their income in state and local taxes than higher income earners.

Look, Peter Kinder tweeted something dumb.

As you can see in the chart pasted here from the Center on Budget and Policy Priorities, our unfinanced wars are a major cause of our current deficits. And unless Kinder and his pal Fred Barnes want to talk about the 2001 and 2003 tax cuts as "spending," it's doubly hard to see how "the cause is spending at levels never before seen in peacetime."

h/t Political Wire

CQ/Roll Call's Political Wire: "A new CBS News poll finds Americans 'are unimpressed with their political leaders' handling of the debt ceiling crisis.' Key finding: A majority disapprove of all the involved parties' conduct, but Republicans in Congress fare the worst, with just 21% backing their intransigent resistance to raising taxes. A stunning 71% disapprove."

h/t Political Wire

Via Politico: “I would just say Mitch, honestly, with a straight face, do a press conference and say, ‘Here’s the solution to the problem: Let’s let the Democrats do it and we want them to do it three times before the next election and it will be OK with us if they do it as long as we don’t have to touch it.’ And people aren’t ridiculing that? This is when we’re supposed to come together.”

Roll Call reports that Sen. Roy Blunt supports Minority Leader Mitch McConnell's (R-KY) plan to give the President "sweeping power to increase the government’s borrowing authority" without Congressional approval. 

As has been noted elsewhere, McConnell's "plan" is an acknowledgement that you can't do serious deficit reduction without new revenues.

The initial analysis from MSNBC's First Take: 

Yet perhaps the biggest takeaway from McConnell’s proposal is that it exposes Republicans leaders for not acting on the deficit and debt when they had the power to do so, and when they had a Democratic president willing to do things that probably won't be seen for a generation. When Obama put $4 trillion in deficit reduction on the table (as long as Republicans added revenues to the mix), they walked away. And when they had Democrats tying spending cuts to the debt increase, they ended up punting. Here’s the lesson we’ve all learned: What the GOP cares about is low taxes and shrinking government. The deficit and debt are only means to that end.   

It's time for a balanced approach to our state and federal budgets, and way past time for some shared sacrifice. 

From Michael Linden, the Director of Tax and Budget Policy at the Center American Progress: 

[I]f you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher. The top 10 years would share marginal tax rates at 50 percent or higher. The two worst years, on the other hand, were 2008 and 2009, when the top marginal tax rate was 35 percent. In the 13 years that the top marginal tax rate has been at its current level or lower, only one year even cracks the top 20 in overall job creation.

We showed last week that lower rates are not associated with faster overall economic growth—just the opposite, in fact. And now we know that lower rates don’t coincide with higher job growth, either. So where is the evidence that the lower marginal tax rates spur job creation? It’s certainly not present in the past 60 years of American history.

It’s worth keeping this in mind the next time a conservative lawmaker claims that raising the rates for the wealthy would “destroy jobs.”

The Hotline: "Todd Akin (R-Mo.) told the Missouri state House Republican Caucus Monday that he intends to publicly announce a decision on a challenge to Sen. Claire McCaskill (D-Mo.) next Tuesday, according to two Republican sources who were at the caucus meeting."

Akin and Paul Ryan (R-WI) at their press conference announcing the House GOP's FY2012 budget proposal, which would phase out Medicare as we know it, make huge cuts to vital safety net programs -- and give the wealthy even more tax cuts

Akin proudly endorses the GOP plan to phase out Medicare as we know it.  "I had the privilege of being part of the process of crafting this budget," he bragged to constituents last month.

The Washington Post's Greg Sargent summarizes data from a new Gallup poll:

USA Today published a few numbers this morning from the Gallup poll, which is due out tomorrow, but Gallup sent me an early look at the details. There’s this striking finding:

Are you worried or not worried that the Republican plan for reducing the federal budget deficit in the long-term would --

Cut Medicare too much? Worried: 66; Not worried: 31

Cut Social Security too much? Worried: 65; Not worried: 33

Take away needed protections for the poor and disadvantaged: Worried: 64; Not worried: 34

Protect the rich at the expense of everyone else: Worried: 64; Not worried: 35

Here's a more complete breakdown, directly from Gallup:

The Americans United for Change organization has a new TV spot running in a few Congressional districts around the country highlighting Congressional Republicans' recent vote to phase out Medicare as we know it.  It's a good taste of what's to come.

Reps. Todd Akin, Vicky Hartzler, Blaine Luetkemeyer, Jo Ann Emerson, Sam Graves and Billy Long all voted to eliminate Medicare -- and give the very wealthy even more tax cuts.

Billy Long found the time in his very busy schedule promoting meaningless holidays to speak with the National Journal in Washington this week.  In his interview, Long delivered a number of his vapid Billyisms, and even declared,"I'm probably more tea party than the tea party."  I have no idea what it means to be "more tea party than the tea party," but it sounds unpleasant. 

What really caught my attention was this exchange at the end of the interview about an upcoming vote on raising the federal debt ceiling. 

NJ Will you vote to raise the debt ceiling?

LONG We are going to have to get some extreme, not extreme—we’re going to have to get some good-sized spending cuts before I’d even look at it. It’s going to be another negotiating thing.

From the Washington Post's Greg Sargent:

New Washington Post/ABC News polling released this morning is unequivocal: There is strong across the board support for Obama’s policy preferences on the deficit.

After voting to shut down the federal government last week, Billy Long voted against the full compromise budget deal passed yesterday. 

The News-Leader calls out Billy Long for voting to shut down the federal government last week: "If U.S. Rep. Billy Long is trying to appeal to ardent tea party supporters, he made a good choice with his vote last weekend to reject a budget deal that avoided a shutdown of the federal government. But we're hoping Long joins other Missouri members of the House and Senate in embracing the spirit of compromise needed for our country to move forward on thorny long-term budget issues..."

Via The Turner Report, here's Barry Soetoro's full speech outlining his budget proposal "to reduce the deficit by $4 trillion over the next 12 years and to ensure America's future wealth and prosperity."

Last night on The Daily Show...