Bartlett: Rich Nontaxpayers

New York Times, Rich Nontaxpayers, by Bruce Bartlett:

An oft-repeated Republican talking point is that close to half of all federal income tax filers have no tax liability. Prominent Republicans often imply that these people ought to be paying federal income taxes — and that they don’t is a major cause of the budget deficit. ...

This is ironic, because two of the measures most responsible for the rise in the number of nontaxpayers are the earned income tax credit and the child credit — both Republican initiatives. Together they account for 30 percent of the nontaxpaying population, according to the Tax Policy Center.

Once upon a time, Republicans were more concerned about the number of rich people with no income tax liability. ... According to newly released data from the IRS, the number of tax filers with no federal income tax liability among those with an income of $200,000 or more has risen to more than 20,000, just over half of 1% of all those with an income over $200,000. In 2009, about four million returns listed such an income out of 140 million total returns.

The data also show that among those with an income over $200,000, many paid relatively low tax rates: 3.3% paid less than 10%, 10% paid 10-15%, 37.2% paid 15-20%, 30.4% paid 20-25% and 16.7% paid 25-30%. Just 2.4% paid more than 30%.

Republicans are always quick to attack Democrats for waging “class warfare” whenever they suggest that the wealthy ought to pay more taxes to help reduce the deficit and prevent the decimation of programs to aid the poor.

But Republicans also engage in class warfare when they suggest that the poor are to blame for deficits because so few pay federal income taxes. Those among the wealthy who are paying no income taxes at least deserve equal time.

• Forbes, Income of Top 400 Fell 25% in 2009, But They Took Record 16% of all Capital Gains, by Janey Novack