Mitch McConnell Sums Up GOP Economic Vision

The poor have it too good. The poor are treated with too much favoritism in the federal tax code. That's what Mitch McConnell said yesterday (in an interview that aired this morning). You may consider it outrageous. I certainly do. But what he said is the formed basis for right-wing conservative economic policy. Here is part of the interview from CBS News:

Note the clever propaganda-spreading in McConnell's interview.
Almost 70 percent of the federal revenue is provided by the top 10 percent of taxpayers now. Between 45 percent and 50 percent of Americans pay no income tax at all. We have an extraordinarily progressive tax code already. It is a mess and needs to be revisited again,
The first sentence in McConnell's assertion is an out-and-out lie. Top 10% of taxpayers do not provide 70% of federal revenue. Rather, they provide for 70% of federal income tax revenue, and the federal income tax itself accounts for only about 40% of total federal revenue. But what McConnell and the Republicans hope no one will notice is that income taxes, oddly enough, aren't the only taxes that comes out of one's income. If you earn your income from, you know, working (as opposed to the way Mitt Romney makes his money), the primary taxes coming out of your paycheck are the income tax (federal and state, if your state has any) as well as payroll taxes. McConnell's propaganda calculation does not include payroll taxes, which are a much greater burden on the poor and the middle class than for the rich.

The share of revenues vary a little from year to year, but about 34-40% of federal revenues come from payroll taxes. The chart on the right represent the numbers from the receipts in 2010, courtesy of the Tax Policy Center (with data from Office of Management and budget). The rich are far less affected by the payroll tax, as it is capped at a certain level for earned income and not at all charged for the income of the super rich - who make their money in capital gains.

Dan Pfeiffer of the White House explained just what is factually wrong with McConnell's - and other Republicans' - propaganda argument. Let's see what happens when you combine the total contributions and its effects on the actual federal revenue:
In fact, because of growing income inequality, the top 10 percent of American earners now earns 42 percent of the nation’s income, and when correctly calculated, pay about 50 percent of the federal income and payroll tax burden - not much larger than their share of earnings.
Of course, the top 10%, with incomes of an average of $400,000 (and the top 1% with incomes over $1 million a year each), they can and should be bearing more of the tax burden.

But that's the factual inaccuracies. The agenda behind those inaccuracies is fare more cynical. That is to end America's only progressive tax - the income tax. Elect Mitt Romney and it will become reality - the government will simply become a conduit through which the common wealth gets channeled to the rich few.

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