Exposing What's Wrong With The "Right-To-Work" Myth

From Media Matters

Contrary to the right-wing media myth, right-to-work legislation does not lead to job growth and higher pay for workers. Economic studies have shown that the "evidence is overwhelming" that "right-to-work" laws have not boosted employment or wages in states that have adopted them.

Right-Wing Myth: "Right-To-Work" Laws Create Jobs

John Fund: "States That Have Right-To-Work Laws Created Something Like 900,000 New Jobs Over The Last 10 Years." American Spectator editor John Fund appeared on Fox News and argued that "right-to-work" laws create jobs:

BILL HEMMER (co-host): OK, would this new law, would it create jobs or is this just a way to -- I guess the unions were using the dues to make sure that they stayed strong, right?

FUND: Well, the Labor Department has shown that states that have right-to-work laws created something like 900,000 new jobs over the last 10 years. States that didn't have right-to-work laws lost over 3 million jobs. So, looking at this, it makes it easier for employers to come in and makes work schedules more flexible, and a lot of employers are now looking at states like Indiana to move to, especially from states like Illinois which are raising taxes and also have lots of union protections. [Fox News, America's Newsroom, 2/24/12]

Art Laffer: "Right-To-Work" States "Have Higher Employment Growth, Attract More Residents, And Have More Rapid Growth In State And Local Tax Revenues." In a February 11 Wall Street Journal op-ed, Art Laffer, a former economic adviser to President Reagan, argued:

The benefits to states having right-to-work legislation are overwhelming. As demonstrated by a number of economists, most notably Ohio State's Richard Vedder and Harvard's Robert Barro, the economies in states with right-to-work laws grow significantly faster than those in forced-union states. They also have higher employment growth, attract more residents, and have more rapid growth in state and local tax revenues than forced-union states. [The Wall Street Journal, 2/11/12]

Wash. Times' Nita Ghei: "These Locations Boast The Highest Job-Creation Rates." Washington Times contributor Nita Ghei wrote a column defending "right-to-work" laws and argued:

Twenty-three other states have similar statutes that say employees cannot be forced to join a union or pay union dues as a precondition of employment. It's no coincidence that the states playing by these rules are some of the economy's best performers, such as Texas, Tennessee and even Alabama. These locations boast the highest job-creation rates, a vital factor for suffering Americans in these days of 8.5 percent unemployment. [The Washington Times, 1/26/12]

Real World Reality: "Right-To-Work" Laws Have Little Impact On Employment, Economic Growth

EPI: Evidence Shows "Right-To-Work" Legislation "Has No Statistically Significant Impact Whatsoever" On Job Growth. The Economic Policy Institute analyzed employment growth in states with and without "right-to-work" laws and reported that "the evidence is overwhelming" that "right-to-work laws have not succeeded in boosting employment growth in the states that have adopted them." The report also reported:

[T]he history of right-to-work studies has a clear trajectory. The more scholars are able to hold "all other things" equal, the more it becomes clear that these laws have little or no positive impact on a state's job growth. The most recent and most methodologically rigorous studies conclude that the policy has no statistically significant impact whatsoever. [Economic Policy Institute, 3/16/11]

Hofstra University's Lonnie Stevans: "Right-To-Work" Laws Result In "Little Or No Gain" In Employment And Economic Growth. Lonnie Stevans, director of Hofstra University's Business Research Institute, analyzed the economic impact of "right-to-work" laws and concluded that "from a state's economic standpoint, being right-to-work yields little or no gain in employment and real economic growth." [Review of Law & Economics, Volume 5, Issue 1, 2009]

AP: Experts Say It's "Nearly Impossible" To Show Impact Of "Right-To-Work" Laws On State Economies. From an Associated Press article on "right-to-work" laws:

The evidence on the issue is abundant, but also conflicting and murky. The clearest conclusion, according to many experts, is that the economies of states respond to a mix of factors, ranging from the swings in the national economy to demographic trends, and that isolating the impact of right-to-work is nearly impossible.

Obscuring the answer is "the difficulty of distinguishing the effects of the RTW laws from state characteristics, as well as other state policies that are unrelated with these laws," said economists Ozkan Eren and Serkan Ozbeklik, who conducted a major study last year of the right-to-work laws in Oklahoma and Idaho.

For major industries, the chief factors in choosing locations tend to be access to supplies, infrastructure, key markets and a skilled workforce, according to business-recruitment specialists. For a state's workers, the impact of the laws is limited because only about 7 percent of private-sector employees are unionized. Over the years, job growth has surged in states with and without right-to-work laws.

"The reason we don't have clear views (on right-to-work laws) is because it's always being debated at its extremes," said Gary Chaison, a professor of labor relations at Clark University in Massachusetts, who assigns his students to analyze the issue each year. In the end, when it comes to jobs and the law, "we don't know causation," he said. [Associated Press, 1/28/12]

NY Times' Rosenthal: "Six Of The 10 States With The Highest Unemployment Have Right-To-Work Laws In Place." Discussing the impact of "right-to-work" laws on the economy, New York Timeseditorial page editor Andrew Rosenthal reported that "economists have found that unionization has a minimal impact on growth and employment. Six of the 10 states with the highest unemployment have right-to-work laws in place. North Carolina, which has the lowest unionization rate in the country, 1.8 percent, also has the sixth highest unemployment, 10 percent." [The New York Times, The Loyal Opposition, 2/2/12]

Real World Reality: "Right-To-Work" Had "Significant And Negative" Effect On Employment

AP: "Proponents Point To An Immediate Impact In Oklahoma, Which Adopted The Measure In 2001." The AP reported:

In 2002, the state added 7,822 jobs, said Fred Morgan, president of the Oklahoma Chamber of Commerce.

"In 2002, the Oklahoma Department of Commerce reported that companies announced plans to add the highest number of new jobs since 1995," Morgan said.

However, the chamber study does not account for significant factors affecting employment in the period cited. A massive decline in American manufacturing had a severe impact on jobs in the Rust Belt, where states without right-to-work laws are clustered.

The Sun Belt, where most states have the law, had fewer manufacturing jobs to lose and experienced big increases in population.

In Oklahoma, the job gains after the law passed also were not unusual in the region. Three neighboring states without a right-to-work law -- Missouri, New Mexico and Colorado -- experienced similar job growth, in some cases even exceeding Oklahoma's. [Associated Press, 1/28/12]

EPI: "The Adoption Of Right-To-Work In Oklahoma Had No Significant Positive Impact Whatsoever On Employment." The Economic Policy measured the impact of implementing "right-to-work" laws in Oklahoma and concluded:

No matter how we analyzed the data, the result was always the same: The adoption of right-to-work in Oklahoma had no significant positive impact whatsoever on employment. In every instance, the effect of the law was either insignificant or, more often, significant and negative. When we tracked year-by-year changes, the data show Oklahoma improving relative to its neighbors in the years leading up to adoption of right-to-work -- strongly suggesting that factors other than right-to-work are driving the state's employment trends.

The years following the law's adoption are overwhelmingly associated with negative employment effects. The sample that compares all counties in Oklahoma with all counties in its neighboring states gives the most robust estimates due to the larger sample size. Here too, the data suggest that Oklahoma's employment declined by 1-3%, relative to its neighbors, in the years following adoption of right-to-work. [Economic Policy Institute,3/16/11]

Real World Reality: "Right-To-Work" Laws Cut Wages And Benefits

EPI: "Right-To-Work" Laws "Are Associated With Significantly Lower Wages And Reduced Chances Of Receiving Employer-Sponsored Health Insurance And Pensions." Elise Gould and Heidi Shierholz, researchers at the Economic Policy Institute, studied what they called "the compensation penalty of 'right-to-work' laws" and concluded:

[O]ur findings -- that "right-to-work" laws are associated with significantly lower wages and reduced chances of receiving employer-sponsored health insurance and pensions -- are based on the most rigorous statistical analysis currently possible. These findings should discourage right-to-work policy initiatives. The fact is, while RTW legislation misleadingly sounds like a positive change in this weak economy, in reality the opportunity it gives workers is only that to work for lower wages and fewer benefits.

EPI estimated that "right-to-work" laws decreased hourly wages by 3 percent for all workers:

[Economic Policy Institute, 2/17/11, 4/5/11]

Hofstra's Stevans: "Wages And Personal Income Are Both Lower In Right-To-Work States." In her analysis of the economic impact of "right-to-work" laws, Hofstra's Stevans wrote: "Wages and personal income are both lower in right-to-work states, yet proprietors' income is higher. As a result, while right-to-work states may maintain a somewhat better business environment relative to non-right-to-work states, these benefits do not necessarily translate into increased economic verve for the right-to-work states as a whole -- there appears to be little 'trickle-down' to the largely non-unionized workforce in these states." [Review of Law & Economics, Volume 5, Issue 1, 2009]

McClatchy: "Numerous Studies Have Found That Wages For Both Union And Non-Union Workers Are Lower In States With Right-To-Work Laws." McClatchy reported:

Numerous studies have found that wages for both union and non-union workers are lower in states with right-to-work laws. Others have found that workplace safety suffers in right-to-work states, where workers are less likely to secure job safety enhancements beyond federal and state regulations. [McClatchy Newspapers, 2/16/12]

Obama gets stronger as message sticks

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GOP continues to push to disenfranchise citizens through voter ID laws

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Michigan Dems, Independents Should Vote for Santorum in Michigan Primary

By Joe DiSano/Huffy Post

Democrats love chaos. Few will admit it but nothing gets our blood flowing like an ugly primary blood bath. Thankfully, we are in a period of relative internal calm right now. 2012 is the only the second presidential primary cycle since 1964 where Democrats aren't sinking their teeth in each other's jugulars.

But what's a trouble making Democrat to do in the interim? I think I have a solution. A solution that will cause maximum discomfort for the power brokers of the GOP. May I suggest casting a vote for Rick Santorum in Tuesday's GOP presidential primary? 

Not Ron Paul or Newt Gingrich. Voting for Ron Paul is wasting your vote. We need to focus our fire on the one real challenger to Romney left standing. While it may be amusing to cast a vote for either of those walking punch lines, the real opportunity to embarrass Romney is to cast your vote for Rick Santorum. 

Sure the good government types and party purists will look down their noses at the thought of loyal Democrats casting a vote in the GOP Primary. It's easy to render moral and ethical judgment on those people actually in trenches slugging it out against the GOP if you don't ever get your hands dirty.
 
I am not concerned with the ethical or moral implications of voting in the GOP primary and neither should you be. Heck, even the pro-Obama Super PAC -- Priorities USA -- is up with an ad here in Michigan trashing Mitt's record on the auto bailouts.

The fact is Michigan's Republicans rammed a bill creating this statewide primary through the legislature to the cost of $10,000,000 paid for by us -- Joe and Jane Taxpayer. That gives me, and hopefully you, free reign to make mischief and maybe deliver a mortal wound to the Romney campaign.

Let's be clear though -- chances are good Mitt Romney will be the GOP nominee regardless of what happens in Michigan. But we can assist in making it as costly for Romney and his corporate supporters as possible. It is in every Democrats best interest for this process to continue right up until the GOP convention. 

Imagine a 1968 redux only with supply-siders and Republican Tea Partiers battling it out in the streets instead of hippies and Chicago police. I would wager the American public would render any political party with a brokered convention as unfit to run the government. We can help create that out come this Tuesday.
 
Now some will say that we could actually help deliver the nomination to Santorum and we may regret that outcome. 
 
Don't be distracted by the sideshow. Santorum matters little on Tuesday. He is only a convenient vessel to embarrass Romney on the national stage. The Romney people have set the bar so high in Michigan through their massive spending Romney needs to win a resounding victory in Michigan of at least 10 percent to beat expectations and quell the demands for a stronger nominee. The national press is ready to tell the story that Romney got beat on his home turf.  You can help make that happen.
  
The Michigan Republican Party delegate selection plan provides that of the 30 delegates to the national convention, 28, or two per each of Michigan's 14 congressional districts, will be awarded based on a winner-take-all determination within each congressional district. The remaining two delegates will be awarded based on the proportionate vote of the entire statewide primary vote. So, for example, if Santorum wins in 8 congressional districts he would wind up with 16 delegates plus one more based on the statewide vote, or 17 delegates. Under this scenario, the end result would be Santorum 17, Romney 13.

There are various scenarios being tossed around by pollsters and pundits alike that show either Mitt or Santorum could walk out of Michigan with a majority of delegates. 

And at the heart of it this is all about delegates, but we can help mold the perception of whoever wins on Tuesday night by ignoring the opportunity to vote for Gingrich or Ron Paul. Cast your vote for Santorum for maximum effect and maximum havoc. Don't waste your vote for Ron Paul. He has no chance of walking out of Michigan with even one delegate under the current rules.
 
To vote in the Republican primary a voter simply needs to request to do so. You don't need to say that you are a Republican, and you would still be able to vote in the Michigan Democratic Party May 5 caucuses, and to re-elect President Obama in November.

For now, savor the opportunity to cause problems for the other party. After all you are paying for it.

 

New PAC seeks to oust anti-choice legislators in Virginia

By Eric W. Dolan/Raw Story

Former Virginia lawmakers announced on Monday the formation of the Women’s Strike Force, a new political action committee aimed at defeating state lawmakers who have pushed for legislation to prohibit or restriction a woman’s ability to terminate her pregnancy.

“The steps that have been taken by lawmakers in Virginia and states across the country to deprive women of their reproductive rights are a slap in the face to every American wife, mother, sister and daughter in our country,” former Del. Robin Abbott (D), the group’s co-chair, said.

So-called “informed consent” legislation in Virginia sparked outrage because it would have required a woman to receive a trans-vaginal ultrasound before having an abortion. Since most abortions are performed in the first trimester, when the fetus is too small to be viewed by an abdominal sonogram, the ultrasound image would need to be captured by inserting a probe into the vagina.

The bill would also require the ultrasound image to remain in a woman’s medical file for seven years.

After a public backlash, the legislation wasrevised so that it would require only non-intrusive abdominal ultrasounds.

“As a former member of the General Assembly and Virginia’s first woman in Congress, I fought for women’s rights in the 70′s, 80′s and 90′s,” former Del. Leslie Byrne (D) said in a statement.

“We must move the Commonwealth and the nation forward, not backslide to denying women rights.”

Another bill in Virginia would have legally defined a person to include unborn children “from the moment of conception until birth at every stage of biological development.” The legislation was intended to ban abortion and to set up a legal challenge to Roe v. Wade, which upheld a woman’s right to terminate her pregnancy until the fetus is viable outside the womb.

The bill could of had the unintended consequence of outlawing contraception, but an amendment to prevent such an occurrence was rejected by a 64 to 34 vote in the House. The bill was latershelved by the Virginia Senate, and will not be considered again until 2013.

RUSH LIMBAUGH: AMERICA’S LEAST FAVORITE NEWS PERSONALITY

By Alex Seitz-Wald/Think Progress


A new Harris Poll out today finds that conservative shock jock Rush Limbaugh is America’s “least favorite” news personality, with 46 percent of respondents picking him for the dubious honor. Runners-up Bill O’Reilly and Nancy Grace come in a distant second and third, at 31 percent and 23 percent, respectively. But more interestingly, Limbaugh is universally disliked. He is the only person whom Democrats, Independents, and Republicans alike chose as among their top three their least favorite people

Mitt Romney ‘Remembers’ A Michigan Event That Took Place 9 Months Before He Was Born

By Adam Peck/Think Progress

For several weeks now, the Mitt Romney campaign has crisscrossed Michigan in an attempt to salvage a badly-needed win in the state where Romney was born and his father served as governor. And in an attempt to overcome several embarrassing unforced errors in the last few days, Romney tried to connect with Michiganders at a tea party rally in Milford on Thursday by “remembering” an event from his childhood that took place nine months before he was born.

A reporter from the Toronto Star, which covers nearby Michigan, caught the blunder:

Romney recalled he was “probably 4 or something like that” the day of the Golden Jubilee, when three-quarters of a million people gathered to celebrate the 50th anniversary of the American automobile.

“My dad had a job being the grandmaster. They painted Woodward Ave. with gold paint,” Romney told a rapt Tea Party audience in the village of Milford Thursday night, reliving a moment of American industrial glory.

The Golden Jubilee described so vividly by Romney was indeed an epic moment in automotive lore. The parade included one of the last public appearances by an elderly Henry Ford.

The National Automobile Golden Jubilee was held in June of 1946. Romney was born on March 12, 1947. Governor George Romney did in fact oversee the day’s festivities, but his son’s retelling is, at best, a patchwork tale stitched together from pieces of his father’s stories.

On Monday, the Romney campaign told the Huffington Post that Romney never explicitly said he was in attendance at the event. “He was simply telling the story about his dad,” an aide told the site.

This isn’t the first time Romney has run into trouble when trying to recall a childhood memory from Michigan. Two weeks ago his campaign ran an ad with a photograph purportedly showing Romney with his father at the Detroit auto show. As ThinkProgress noted, the photo was actually taken from a helipad at the World’s Fair in New York.

VIDEO: Mitt Romney’s Top 10 Out Of Touch Moments

By Jeff Spross and Alex Seitz-Wald/Think Progress

Mitt Romney just can’t help himself. Despite concerns about his ability to connect with average voters, Romney refers to his significant wealth with startling frequency. Three times in the last three days alone, Romney has issued statements that make him seem completely disconnected with normal Americans. This has been a problem for Romney since the beginning of the campaign, and may haunt him down the road if he just can’t shake the image of being “Mr. One-percent.” Here are Mitt Romney’s top 10 out of touch moments:

10. “I like those fancy raincoats you bought [to people wearing plastic ponchos]. Really sprung for the big bucks.’”

9. “I know what it’s like to worry about whether or not you are going to get fired. … There are times when I wondered whether I was going to get a pink slip.”

8. “Corporations are people, my friend.”

7. “Rick [Perry], I’ll tell you what: 10,000 bucks? $10,000 bet?”

6. “I get speaker’s fees from time to time, but not very much.” [$374,000]

5. “I have some great friends who are NASCAR team owners.“

4. “Ann drives a couple of Cadillacs.”

3. “I’m not concerned about the very poor. … We have a safety net there.”

2. “I’m also unemployed.”

1. “I like being able to fire people who provide services to me.”

Watch them all here:

Random Friday:Tony Trupiano on The Ed Show

How The Right Redefines "Fairness" To Push Tax Hikes On Poor People

From Media Matters






The re-emerging right-wing myth that low-income Americans aren't paying their "fair share" in taxes relies on flawed data: a report from the Heritage Foundation highlighting the fact that nearly half of Americans pay no federal income tax. In fact, while nearly half of Americans pay little to no federal income tax, nearly three-quarters pay other federal taxes, and nearly all pay state and local taxes; Americans who pay neither income nor payroll taxes are seniors, students, people with disabilities, and others who are not part of the working population.

Conservative Media Hype Income Tax Number In A Call For "Fairness"

Fox's Jim Angle: "For Half Of The Working Population, 'Fair' Means Almost No Income Taxes At All." In a segment examining "fairness" in the tax code, Fox News chief Washington correspondent Jim Angle pointed to the fact that half of Americans pay little to no federal income taxes to criticize President Obama's call that the wealthy pay their fair share in taxes, saying that it "doesn't entirely fit with the call for fairness from the president and his aides." He added: "When the president talks about fairness, he's arguing the wealthy should pay more, not that everyone should pay something." [Fox News, Happening Now, 2/20/12]

Fox's Bret Baier: "Like Beauty, Fairness In Taxes Appears To Be Largely In The Eye Of The Beholder." Introducing a segment by Angle on Fox News' Special Report, anchor Bret Baier asked viewers whether they pay their "fair share" and said that "like beauty, fairness in taxes appears to be largely in the eye of the beholder." Angle went on to say that "the president's idea of fairness is that the wealthy should be more, not that everyone should pay something." [Fox News, Special Report, 2/20/12]

Fox Nation: "Percentage Of Americans Who Pay No Income Tax Hits 49.5..." In a post highlighting the Foundry's blog, the Fox Nation website linked to the post using the headline: "Percentage Of Americans Who Pay No Income Tax Hits 49.5...":

[Fox Nation, 2/22/12]

Big Government: "No Wonder Obama Is Being Called The 'Food Stamp President.'" In a post bearing the headline, "49.5% of Americans Pay No Federal Income Tax, Can Obama Get that Number to 51% by November?" that trumpeted Heritage's report, Andrew Breitbart's Big Government website blamed the increase on President Obama:

Under Barack Obama, the number of people not paying federal income taxes in America has officially hit 49.5%. That means almost half of America, or 151.7 million Americans, are enjoying privileges or living off benefits the other 50.5% pay for. What kind of benefits am I talking about? Almost every kind you think about.

[...]

No wonder Obama is being called the "food stamp president." [Big Government, 2/21/12]

Drudge Report: "Percentage Of Americans Who Pay No Tax Hits 49.5..." The Drudge Report linked to the Foundry's post with the headline: "Percentage of Americans who pay no tax hits 49.5...":

[Drudge Report, 2/22/12]

In Fact, "No One Lives Tax-Free In America"

CBPP: Income Tax Number "Greatly Overstates The Share Of Households That Do Not Pay Any Federal Taxes." The Center on Budget and Policy Priorities wrote that the fact that nearly half of Americans don't pay any federal income tax "ignores the substantial amounts of other federal taxes -- especially the payroll tax -- that many of these households pay." CBPP continued: "As a result, it greatly overstates the share of households that do not pay any federal taxes. Data from the Urban Institute-Brookings Tax Policy Center show only about 14 percent of households paid neither federal income tax nor payroll tax in 2009, despite the high unemployment and temporary tax cuts that marked that year." [Center on Budget and Policy Priorities, 5/31/11]

CBPP: "86 Percent Of Working Households Pay More In Payroll Taxes Than In Federal Income Taxes." CBPP reported:

The reality is that the income tax is one of a number of types of taxes that individuals pay, both over the course of their lifetimes and in a given year, and it makes little sense to treat it as though it were the only one that matters. Some 86 percent of working households pay more in payroll taxes than in federal income taxes. In fact, low- and moderate-income people pay a much larger share of their incomes in federal payroll taxes than high-income people do: taxpayers in the bottom 20 percent of the income scale paid an average of 8.8 percent of their incomes in payroll taxes in 2007, compared to just 1.6 percent for taxpayers in the top 1 percent of the income distribution.

[Center on Budget and Policy Priorities, 5/31/11]

CBPP: "The Poorest Fifth Of Households As A Group Paid An Average Of 4 Percent Of Their Incomes In Federal Taxes In 2007." CBPP reported that "low-income households as a whole do, in fact, pay federal taxes," writing:

• Congressional Budget Office data show that the poorest fifth of households as a group paid an average of 4 percent of their incomes in federal taxes in 2007 (the latest year for which these data are available), not an insignificant amount given how modest these households' incomes are -- the poorest fifth of households had average income of $18,400 in 2007. [4] The next-to-the bottom fifth -- those with incomes between $20,500 and $34,300 in 2007 -- paid an average of 10 percent of their incomes in federal taxes.

• Even these figures understate low-income households' total tax burden, because these households also pay substantial state and local taxes. Data from the Institute on Taxation and Economic Policy show that the poorest fifth of households paid a stunning 12.3 percent of their incomes in state and local taxes in 2010.

• When all federal, state, and local taxes are taken into account, the bottom fifth of households paid 16.3 percent of their incomes in taxes, on average, in 2010. The second-poorest fifth paid 20.7 percent. [Center on Budget and Policy Priorities, 5/31/11]

Journalist David Cay Johnston: "When It Comes To State And Local Taxes, The Poor Bear A Heavier Burden Than The Rich In Every State Except Vermont." In an article outlining "a few points about taxes and the economy that you may not know," Reuters columnist David Cay Johnston, a former New York Times reporter who won the Pulitzer Prize for his reporting on the tax code, wrote:

Data from the Tax Foundation show that in 2008, the average income for the bottom half of taxpayers was $15,300.

This year the first $9,350 of income is exempt from taxes for singles and $18,700 for married couples, just slightly more than in 2008. That means millions of the poor do not make enough to owe income taxes.

But they still pay plenty of other taxes, including federal payroll taxes. Between gas taxes, sales taxes, utility taxes and other taxes, no one lives tax-free in America.

When it comes to state and local taxes, the poor bear a heavier burden than the rich in every state except Vermont, the Institute on Taxation and Economic Policy calculated from official data. In Alabama, for example, the burden on the poor is more than twice that of the top 1 percent. The one-fifth of Alabama families making less than $13,000 pay almost 11 percent of their income in state and local taxes, compared with less than 4 percent for those who make $229,000 or more. [Willamette Week, 4/13/11]

Johnston: Payroll Taxes "Are Paid Mostly By The Bottom 90 Percent Of Wage Earners." In his article on taxes and the economy, Johnston wrote:

Social Security, Medicare and unemployment insurance taxes (known as payroll taxes) are paid mostly by the bottom 90 percent of wage earners. That's because, once you reach $106,800 of income, you pay no more for Social Security, though the much smaller Medicare tax applies to all wages. Warren Buffett pays the exact same amount of Social Security taxes as someone who earns $106,800. [Willamette Week, 4/13/11]

CBPP: "Lower-Income Households Pay A Significantly Larger Share Of Their Incomes In Federal Excise Taxes" Than Do More Affluent Households. In a report on the taxes that low-income Americans pay, CBPP wrote:

The reality is that the income tax is one of a number of types of taxes that individuals pay, both over the course of their lifetimes and in a given year, and it makes little sense to treat it as though it were the only one that matters. Some 86 percent of working households pay more in payroll taxes than in federal income taxes. In fact, low- and moderate-income people pay a much larger share of their incomes in federal payroll taxes than high-income people do: taxpayers in the bottom 20 percent of the income scale paid an average of 8.8 percent of their incomes in payroll taxes in 2007, compared to just 1.6 percent for taxpayers in the top 1 percent of the income distribution.

In addition, Congressional Budget Office data show that lower-income households pay a significantly larger share of their incomes in federal excise taxes (levied on goods such as gasoline) than middle- and upper-income households do.

When all federal taxes are considered, it is clear that the overwhelming majority of Americans pay such taxes. [Center on Budget and Policy Priorities, 5/31/11]

For the truth about taxes, click here

And Taxes On Top Earners Are At Historic Lows ...

CBPP: "The Effective Federal Income Tax Rate For The 400 Taxpayers With The Very Highest Incomes Has Declined By Nearly Half Over The Past Two Decades." A February 23, 2010, report by the Center on Budget and Policy Priorities (CBPP) found:

The effective federal income tax rate for the 400 taxpayers with the very highest incomes has declined by nearly half over the past two decades, even as their pre-tax incomes have grown five times larger, new IRS data show.

The top 400 households paid 16.6 percent of their income in federal individual income taxes in 2007, down from 30 percent in 1995. This decline works out to a tax cut of $46 million per filer in 2007, or a total of $18 billion in tax cuts for these households per year. [Center on Budget and Policy Priorities, 2/23/10]

CBPP: "Typical Middle-Class Households Face Higher Tax Rates Than Some High-Income Households." A September 20 post on the CBPP blog, Off the Charts, showed that households with an annual income of over $1 million that earn over two-thirds of their income from investments paid a lower tax rate in 2011 than most middle-income families:

[Center on Budget and Policy Priorities, Off the Charts, 9/20/11]

Congressional Research Service: "About 25 Percent Of Millionaires In The U.S. Pay Federal Taxes At Lower Effective Rates Than A Significant Portion Of Middle-Income Taxpayers." An October 12 Bloomberg article on the recent Congressional Research Service report, "Analysis of the Buffet Rule," noted:

About 25 percent of millionaires in the U.S. pay federal taxes at lower effective rates than a significant portion of middle-income taxpayers, according to a legislative analysis.

Preferential treatment of investment income and the reduced impact of payroll taxes on high earners lets about 94,500 millionaires pay taxes at a lower rate than 10.4 million "moderate-income taxpayers," representing about 10 percent of those making less than $100,000 a year, according to the report by the non-partisan Congressional Research Service dated Oct. 7.

The findings put the U.S. tax system in conflict with the so-called Buffett Rule, which says households making more than $1 million annually shouldn't pay a smaller share of their income in taxes than middle class families, says the report, which analyzed 2006 Internal Revenue Service data. [Bloomberg, 10/12/11; Congressional Research Service, 10/7/11]

For the truth about the historically low tax rates paid by the wealthiest Americans, click here

... While Their Income Has Risen By 256 Percent

CEPR Report Shows Income Of Top 1 Percent Increased 256 Percent From 1979-2006, While Lowest Quintile Saw Incomes Rise 11 Percent. From a December 2010 report released by the Center for Economic and Policy Research (CEPR):

[Center for Economic and Policy Research, December 2010]

For more on income inequality, click here

And Most Americans Who Are Exempt From Paying Income Tax Are Not Part Of Working Population

CBPP: "Vast Majority" Of People Who Neither Pay Income Nor Payroll Taxes Are Seniors, Students, People With Disabilities, And Others. From CBPP:

Some have implied or suggested that people who do not owe federal income tax are "freeloaders" who don't have a "stake in the system" and that making them pay federal income taxes would improve the tax code. Yet the vast majority of the people who owe no federal income taxes fall into one of three categories:

• Approximately 70 percent are working people who pay payroll taxes. As noted above, even the low-income households in this group pay substantial federal income taxes over time. The main options to force these people to pay federal income tax in years when their incomes are low include cutting the EITC or the Child Tax Credit, which would tend to reduce work incentives and increase child poverty and welfare use, and lowering the standard deduction or personal exemption, which could tax many low-income working families into, or deeper into, poverty.

• An additional 17 percent of people who did not pay federal income taxes in 2009 are people aged 65 or older. The main option to make these individuals pay federal income tax would be to subject their Social Security benefits to taxation.

• The remaining 13 percent consists largely of students, people with disabilities, the long-term unemployed, and others with very low taxable incomes.[19] To make these people pay federal income taxes, policymakers would have to tax disability, veterans', and similar benefits or make full-time students and the long-term jobless individuals borrow (or draw from any available savings) to pay taxes on their meager incomes.

[Center on Budget and Policy Priorities, 5/31/11]

Tax Policy Center: "Share Of People Who Don't Pay Income Taxes Will Likely Shrink"

Tax Policy Center: "When People's Incomes Decline So Too Does Their Income Tax."Responding to the income tax number, Tax Policy Center economist Howard Gleckman wrote that "rarely has a bit of data been so misunderstood, or so misused." He went on to explain:

So who are these folks who pay no federal income taxes? Mostly, they are people who don't make very much money. Many are elderly: Think a widow living only on Social Security benefits. Others are parents earning less than $20,000. Only about 5 percent are non-elderly households making more than $20,000. 

It is no accident, btw, that the number of people not paying income tax was so high in 2009. You may have noticed that we've had a recession lately. And here is a powerful insight: When people's incomes decline so too does their income tax (at least most of the time). At the same time, many working families have benefited from temporary tax cuts aimed at boosting the economy, and as a result some did not pay income taxes last year. As the economy improves and those tax cuts expire, it should also be no surprise that the share of people who don't pay income taxes will likely shrink from half last year to less than 40 percent by 2012.

There is, however, another reason why some people don't pay. For decades, both Democratic and Republican governments have made conscious policy decisions to remove low-income working families from the income tax rolls. And, guess what, sometimes government policy works exactly as intended. That's what happened this time. [Tax Policy Center, 4/15/10]