Thomas M. Neale's letter to the editor ("The wealthy pay more than their fair share," May 14) uses the usual Republican tactic of irrelevant statistics to confuse the issue of tax fairness. It does not matter that the top 1 percent of taxpayers pay 38 percent of income taxes. What matters is what percentage of their income do they pay in taxes — and not just income taxes, but all taxes. In the tax year of 2010, Only 42 percent of federal revenue came from income taxes. The rest came from payroll taxes (Social Security and Medicare taxes, 40 percent), corporate income taxes (11 percent), excise taxes (3 percent) and other (4 percent).
The point is that most of the top 1 percent do not pay these payroll taxes at all, or pay at a rate of less than 1 percent while the bottom 98 percent pay at 5.65 percent. In tax year 2010, the bottom 98 percent paid at a rate of 7.65 percent. So if you look at the total percentage of federal taxes collected from individuals, the wealthy pay a much lower percentage of the federal tax burden than Mr. Neale's figures imply — only 16 percent. When you consider state and local taxes (gasoline taxes, property taxes, sewer taxes, car registration taxes, highway tolls) many of which the poor and middle class pay at the same rate as the most wealthy, the total tax burden borne by the wealthy as a percentage of income drops to a ridiculously low level, way below the rate that the rest of us pay. The people who actually pay the highest rate of federal taxes are the two-income earners in the $100,000 to $350,000 range. They make 35 percent of the income but pay 53 percent of the federal income tax.
Mr. Neale goes on to note another irrelevant statistic: that 48 percent of Americans pay no income tax. He says this in order to rile up middle class taxpayers into thinking that they are supporting a class of freeloaders. So, who are these freeloaders? Well, lets see: 20 percent of Americans are children 15 or under. Most of them aren't paying income taxes. Full-time students 16-21 years old who don't have part-time jobs make up another 5 percent. Ten percent of Americans are unemployed. That's only the ones who are have been out of work less than six months. The rest aren't counted. Add 3 percent for the uncounted unemployed and prisoners make up 1 percent of Americans. And none of them are paying income taxes. How about those women (and some men) who stay at home to care for children? Five percent of Americans fall into that category. That leaves less than 4 percent who are employed but make so little (less than $8,000 per year) that they pay no income taxes. Many of those are students with part-time jobs. So, which of these people does Mr. Neale think are the non-tax-paying underclass that are sapping our civic spirit? The children? The stay-at-home moms? The full-time students? Or the unemployed? I guess it's the 4 percent too poor to pay any income tax.
It's time for the American people to wake up and demand tax fairness based on income and all taxes paid, not on some cooked up statistic that only tells part of the story.
Stan Sunderwirth, OellaCopyright © 2014, The Baltimore Sun