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September 20, 2012

The #47percent, taxes and "fees" - and #RickPerrysTexasMiracle

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Ezra Klein does a generally good job of breaking down this “47 percent who pay no income taxes” as to what they actually do pay.

Klein, as the first graphic from his blog shows, points out that those “47 percenters” pay plenty of state and local taxes.

Sales taxes at the state/county/local level, especially if food is taxable, are definitely regressive. I mean, we all have to eat, and there’s only so much pricey caviar or paté that Mitt Romney and his ilk can swallow. State income taxes, too, can have more loopholes for the well-off than federal ones.

That said, I don’t know how Klein exactly figures in property taxes. But, even if you’re a renter, you pay them indirectly as part of your monthly rent.

But, Klein doesn’t go far enough, even then.

Don't forget all the state “fees” that we all pay. Rick Perry with his “Texas miracle” ignores that Texas has consistently jacked up “fees” during his governorship -— driver's license, car registration, etc. He also ignores that Texas does things like charging fees on guns and ammunition, theoretically to support state parks and wildlife, but that the amount of those fees that actually goes to the Texas Parks and Wildlife Department is capped, while the rest goes to the state’s general fund.

I also don’t know how Klein counts excise fees … if they’re considered taxes or not. Let’s not forget that the feds have plenty of excise fees, on things like phone service, as do states and municipalities. (It does seem that Citizens for Tax Justice does, though exactly what it includes, I don't know. That said, I don't doubt that, in the Great Recession, many states hiked a lot of these fees a lot, afraid to raise top income tax rates on rich individuals or corporations.)

Let’s add to this other “fun.” Here in Texas … the Internet is supposed to be convenient, right? So “convenient” that you have to pay a convenience fee to renew your car registration online.

In other words, Tricky Ricky’s claim to have not raised taxes is a big fat lie, beyond semantics.

I’m sure other states have similar issues. And, I’ve probably only scratched the edges in Texas, even as big-biz lobbying groups are trying to scrap the minuscule business and franchise tax we currently have here.

A second graphic has combined the information and shows that total taxation is moderately progressive from the bottom of the income stack to the 80th percentile, only mildly progressive from there to the 99th percentile, and regressive for the top 1 percent. Had Klein broken out that top 1 percent, he probably would have fond it even more regressive.

Finally, Mittens and his like pay much of their taxes at a capital gains rate far below income tax rates. This encourages the rampant short-term churning of stocks. If we taxed capital gains as income while, per the clamor of some financier types, allowing an inflationary depreciation, we’d force investors to be real investors for the long term, while stopping the short-term churning.

Oh, and on Fresh Air with Terri Gross today, Donald Kay Johnston reminds us that corporate taxes, especially at the state level, are about as regressive as sales taxes. Maybe worse.

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