The Payroll Tax and the 47%

Republicans in Congress have been attracting plenty of unwanted attention for their muddled refusal to extend a payroll tax cut that will, if not passed, hit 160 million American workers with a substantial tax increase on Jan. 1. Most of that attention has focused, rightly, on their refusal to provide a tax break to working people even as they do everything in their power to ensure historically low tax rates for the wealthiest.

But in a column today, David Frum points out that it’s more than the GOP’s image as tax-cutters that’s hurting in this debate. As long as the payroll tax stays an issue, more light is shed on the bogus claim, swallowed whole by the Right and even some in the media, that “47 percent of Americans pay no taxes.” The claim has caught on despite being flatly untrue – while only 53 percent of Americans make enough money to pay federal income tax, all workers pay federal payroll taxes. The myth that half of Americans don’t contribute to the federal budget is convenient for GOP talking points, but it just isn’t true.

Frum writes:

[U]nlike House Republicans, I am not in thrall to another Journal teaching: the claim that the poorer 47% of Americans “pay no tax.” This claim rests on denying the existence of payroll taxes altogether. If you deny that payroll taxes exist, it becomes very difficult to discuss the consequences of reducing or remitting them, including some arguably serious long-term consequences.

Republicans, with their “47 percent” claim, are essentially payroll tax deniers. By having a debate about cutting the payroll tax, they are being forced to admit not only that it exists, but that it can be an actual burden on working Americans.

The White House, meanwhile, has started collecting compelling stories via Twitter from individual Americans of what an extra $40 per paycheck (the savings from the payroll tax for a family earning $50,000 a year) will mean to American families. You can follow and contribute your own story with the hashtag #40dollars.

Tags:

Barack Obama, gop, Payroll Tax, taxes