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Friday, April 23, 2010

Tea Party vs. The Facts

For weeks, I've meant to link to Bruce Bartlett's Forbes piece on the beliefs of the tea party participants. Bartlett was last seen on this blog more than 4 years ago as a conservative critic of Bush's policies. Bartlett was a domestic policy aide to Ronald Reagan and is something of a deficit hawk.

However, despite apparent shared ideals, Bartlett cannot abide the tea party movement. He reports the results of a survey of tea party members revealing their poor grasp of basic tax and spend issues:
Tea Partyers were asked how much the federal government gets in taxes as a percentage of the gross domestic product. According to Congressional Budget Office data, acceptable answers would be 6.4%, which is the percentage for federal income taxes; 12.7%, which would be for both income taxes and Social Security payroll taxes; or 14.8%, which would represent all federal taxes as a share of GDP in 2009...

Tuesday's Tea Party crowd, however, thought that federal taxes were almost three times as high as they actually are. The average response was 42% of GDP and the median 40%. The highest figure recorded in all of American history was half those figures: 20.9% at the peak of World War II in 1944.
There's a lot more like that. In fact, the group members being off by a factor of 3 was actually low compared to another data point:
To follow up, Tea Partyers were asked how much they think a typical family making $50,000 per year pays in federal income taxes. The average response was $12,710, the median $10,000. In percentage terms this means a tax burden of between 20% and 25% of income...

According to calculations by the Joint Committee on Taxation, a congressional committee, tax filers with adjusted gross incomes between $40,000 and $50,000 have an average federal income tax burden of just 1.7%. Those with adjusted gross incomes between $50,000 and $75,000 have an average burden of 4.2%.
Even if the respondent was assuming no exemptions, itemized deductions, or other reductions in tax burden, the Tea Party respondents were still significantly off the mark.
a single person with $50,000 in taxable income last year would owe $8,694 in federal income taxes, and a married couple filing jointly would owe $6,669.
Read the entire piece as Bartlett provides a lot of specific detail to debunk the mythical views held by the tea party members.

This is a pretty important fact they seem to have missed: "federal taxes are very considerably lower by every measure since Obama became president." About 40% of the stimulus package was just tax cuts, mostly for 2010.

And this: "No taxpayer anywhere in the country had his or her taxes increased as a consequence of Obama's policies."

Bartlett speculates that anger about the deficit gets mistranslated to anger about taxes. Frankly, I suspect the tea party concerns about the deficit reflect a complete failure to understand basic Keynesian economics. Government deficits are necessary during economic contraction to stimulate demand not provided in the private sector.

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