Rand Paul is Lying His Ass Off About Taxes

Rand Paul went on the View today and lied his ass off about taxes.

Rand Paul's claim that the wealthy pay the majority of ‘taxes’ is flat out false. The idea that the wealthy (the top 1%) of Americans pay the majority, or even an unfair share, of the total tax burden, is 100% false.

That doesn't stop Republicans from making these claims. Who could forget when Mitt Romney was secretly recorded telling his rich donors that 47% of Americans do not pay tax. Yes, it is true that close to 47% Americans pay zero ‘federal income tax’. But what does that mean? 

Let’s break down that 47%:
  • 22% are retired seniors.
  • 16% are from the working poor who are not paid enough to owe federal income tax.
  • 9% owe no federal income tax due to various tax expenditures such as education credits, itemized deductions or reduced rates on capital gains and dividends. Furthermore, most of this group is in the middle to upper income brackets. There are about 7,000 families and individuals who earn $1 million a year or more and still pay no Federal Income tax.

It is true that the wealthiest Americans pay the greatest share of 'federal income taxes', but that point alone is a purposeful and nefarious framing of the overall issue of who pays the most tax. When Republicans talk about taxes, they deliberately only talk about ‘federal income tax’ and never talk about other taxes such as state tax, local tax, Social Security tax, Medicare tax, property tax, sales tax and other excise taxes such as gas tax (“total tax”). Republicans never talk about “total tax” because, once you do, the argument that the wealthy pay an unfair share of 'total tax' falls apart. The reason it falls apart is that all of the other taxes we pay are regressive, which means they take a larger share of income from the poor and middle class.

When you look at who is paying the 'total tax' you will find that the wealthiest Americans are not paying too much, but in fact, they are paying too little. The following chart is from the Institute on Taxation and Economic Policy (ITEP). It presents the "total tax" burden by income percentile. 

There are a bunch of ways to look at this, but here are the key numbers:
  • The bottom 99% takes home 78.3% of income while paying 76.1% of total tax. The top 1% takes home 21.7% of total income while paying 23.8% of total tax. This shows the wealthy DO NOT pay a disproportionate share of tax. 
  • The average income of a taxpayer in the top 1% is $1,827,000. Their total tax burden is 34.1%. A taxpayer earning $129,000 a year has a tax burden of 32.3%, a nearly identical burden to someone earning $1,827,000. A taxpayer earning $31,900 has total tax burden of 23.1%, just 11 points lower than someone earning $1,827,000.
  • The average income and tax burden for a taxpayer is $89,700 and 31.1%. The average income and tax burden for a taxpayer in the top 1% is $1,827,000 and 34.1%. The top 1% of Americans pay nearly the same tax burden as the average. To put it another way, while making 2000% more income than average (yes two thousand percent), a taxpayer in the top 1% pays the average tax burden. 
Anyone who tells you that the wealthy are paying an unfair share of 'tax' or 'total tax' is either lying or doesn't know any better. Secondly, anyone who only wants to talk about 'federal income tax' (like Rand Paul) is engaging in a nefarious framing of the argument with the intention to deceive. The only fair conversation to have on taxation is one that includes all taxes paid. 


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