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In defense of the poor

Two outstanding critiques of some recent false claims that the poor don’t pay taxes landed on our desks today.

The first, from our sister organization in Iowa. Peter Fisher, research director of the Iowa Policy Project, notes that the number of people paying no federal taxes is increasing as a result of the economy. People aren’t making money and are living far below the poverty level. (He also points out that the majority of those not paying federal income taxes are elderly and getting by with Social Security.)

…And if the result is that this year, when so many people are facing economic hardship, nearly half pay no federal income tax, remember who those people are. All of them are paying state and local taxes to support our schools and fire departments and roads. And they will have their time to contribute to federal income taxes as well, as many already have.

The second is an editorial today by the New York Times that makes the same case, while also defending the child tax credit and the earned income tax credit–a top policy achievement of Ronald Reagan. Both offset the large local and state tax burdens that low-income workers carry because of the regressive nature of sales and excise taxes.

… Nearly 90 percent of the families that paid no income tax make less than $40,000, most much less. The real problem is that so many Americans are struggling on such a small income, not whether they pay taxes. The two tax credits lifted7.2 million people out of poverty in 2009, including four million children. At a time when high-income households are paying their lowest share of federal taxes in decades, when corporations frequently avoid paying any tax, it is clear who should bear a larger burden and who should not.