# Bottom 50% of wage earners don't pay taxes--yeah, right! **URL:** \ **Category:** Great Debates\ **Created:** [April 9, 2004, 9:19pm UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228 "2004-04-09T21:19:18Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![kanicbird](https://avatars.discourse-cdn.com/v4/letter/k/5f8ce5/32.png) [@kanicbird](https://boards.straightdope.com/u/kanicbird)\ **Post date:** [April 14, 2004, 11:08pm UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/61 "2004-04-14T23:08:18Z")
> [@](#): > > You are saying pollution is negligible? What about acid rain, global warming, or the loss of the ozone layer? If you don’t accept these, what about the effects of air and water pollution on people’s health, on arable land, on economically exploitable natural resources? I said global pollution, not local pollution. Acid rain, I know there are effects, but honestly haven’t looked into it much, Global warming has no crediable proof from what I have seen, and is highly political. Pollution issues are fairly localized, and in general in develped countries getting better while increasing productivity, As for arable land, we are loosing much to development, and farmers are in trouble, I admit both and don’t have answers except for cheap food is benificial to the lower classes and should be helped out. As for economically exploitable natural resources, you will have to go into which ones you are talking about for comments. > [@](#): > > You say that effectively subsidising gasoline gives people choices, it also takes away choices. Gasoline isn’t magically cheaper, someone (ie the general tax payer) still has to pay for all of the costs involved in getting it. Someone gains $x of choice from having cheaper gas, someone else loses $x of choice by having to pay for it. I disagree, with added productivity of cheap energy our eccomony has expanded far beyond any losses caused by any ‘subsidisy’. It is NOT a zero sum gain, It is possiable to have a win-win where all parties gain and the ‘pie’ expanded ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [April 15, 2004, 12:35am UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/62 "2004-04-15T00:35:47Z")
I just checked in to see the latest on “bottom 50% of wage earners don’t pay taxes” and found a discussion on acid rain. Wow. That’s just about as far off topic as I think I’ve ever seen. I’ll check in later for the discussion about the morality of eating meat. 🙂 ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [April 15, 2004, 3:01am UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/63 "2004-04-15T03:01:06Z")
> [@kanicbird](#): > > Global warming has no crediable proof from what I have seen, and is highly political. Well, science doesn’t operate on “proof,” which is concept within a deductive system like mathematics. Science operates by the accumulation of evidence. And, the accumulation of evidence has led major respected scientific organizations, such as the IPCC, the National Academy of Sciences (NAS), the councils of the American Meteorological Society and the American Geophysical Union, the editors of the most respected multidisciplinary science magazines _Science_ and _Nature_ (citing work that has appeared in their journals), plus even Shell Oil and British Petroleum to come to the conclusion that the evidence is sufficient to state that anthropogenic climate change is real and that, while considerable uncertainty remains regarding the magnitude of the effects, the potential consequences are dire enough to take it very seriously and to justify action. I’ll repeat my [link](http://boards.straightdope.com/sdmb/showthread.php?t=248383) to a recent thread where you can find all sorts of links backing this up. > [@](#): > > I disagree, with added productivity of cheap energy our eccomony has expanded far beyond any losses caused by any ‘subsidisy’. It is NOT a zero sum gain, It is possiable to have a win-win where all parties gain and the ‘pie’ expanded. Whenever you subsidize or effectively subsidize something, you are by definition paying the externalized costs in some other way, either by spreading them around to others, damaging the environment, … It does not have to be zero-sum, I suppose, but if you are subsidizing inefficiency the chances are that the negative effects will outweigh the positive ones. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [April 15, 2004, 3:07am UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/64 "2004-04-15T03:07:42Z")
> [@TaxGuy](#): > > Well, the only way your (and Johnston’s) statement is not completely and utterly ridiculous is if you define “income” as something other than “adjusted gross income,” which is the tax term for the amount of income to which the tax rate is applied. And in that case I’d argue that what you are doing is illegitimate. > > To reiterate, it is ludicrous to say that the person who has $60,000 of adjusted gross income pays a higher percentage of such person’s income in taxes than does the person who has $2.5 million of adjusted gross income. > > The whole debate usually centers around _how much_ more of their income the richer person should pay. I’ve never seen someone actually say the richer person’s percentage is less (which would mean that the federal income tax is regressive). Well clearly, to make progress here, we will have to look into Johnston’s claim in more detail. I have his book and will see if I can track it down if I get the chance. However, I don’t think it is so ludicrous to imagine that people earning $25 (not 2.5, by the way) million might pay less percentage of their AGI in federal tax than people earning $60,000…particularly now that the tax on capital gains and dividends has been reduced…And, once you factor in the payroll taxes. The potential does indeed exist for the tax code to be regressive over some part of the scale near the top. Whether it actually is in reality entails further investigation, but I don’t see how you are so confident that you can rule this out out-of-hand. ---
**Author:** ![iamme99](https://avatars.discourse-cdn.com/v4/letter/i/57b2e6/32.png) [@iamme99](https://boards.straightdope.com/u/iamme99)\ **Post date:** [April 15, 2004, 3:15am UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/65 "2004-04-15T03:15:44Z")
Getting back to the subject of taxes: > [@](#): > > [http://www.commondreams.org/news2004/0409-03.htm](http://www.commondreams.org/news2004/0409-03.htm) > > FOR IMMEDIATE RELEASE > APRIL 8, 2004 > 12:49 PM > CONTACT: National Priorities Project > Anita Dancs, 413-584-9556 > Russell Powell, 413-247-3232 > > \*\*Nearly Half of Every Tax Dollar Goes to Military, National Debt \*\* > > NORTHAMPTON, MA - April 8 - As April 15 approaches and people prepare to pay their 2003 income taxes, they should know that nearly half of every dollar they owe will be used to support military spending and interest on the national debt. Military spending in 2003 required 29 cents of every income tax dollar, with the debt taking another 20 cents, according to the National Priorities Project. > > By comparison, education and veterans benefits receive only four cents of every income tax dollar, slightly ahead of nutrition (three cents), housing (two cents) and natural resources (two cents). Less than a penny of each dollar will fund job training programs. The only budget category besides military spending and the debt to receive more than five percent of the income tax dollar is healthcare (20 cents). > > The average household paid $6,548 in federal income taxes in 2003. Of this, $1,928 went to military and defense, $1,295 to pay interest on the debt, and $1,287 for healthcare. Only $249 from the average household funded education, $233 for veterans’ benefits, $176 for nutrition, $147 for housing and $117 for natural resources. > > Citizens can get a breakdown of how their individual tax payments are spent by visiting the Internet website of the National Priorities Project (NPP) at [http://www.nationalpriorities.org](http://www.nationalpriorities.org). Visitors to the website can also find the impact of federal tax policy in all 50 states and 190 cities nationwide. > > “As the national debt continues to rise, more and more of our taxes will have to go toward paying interest, leaving even less money for such critical needs as the environment and education,” says Greg Speeter, NPP’s executive director. > > Speeter adds that nearly half of the payments on the national debt, or nine cents, goes toward interest on past military expenditures, meaning that taxpayers’ total contribution to military and defense is close to 40 cents of every dollar. “The United States spends almost as much on military and defense as the rest of the world combined. When you add the cost of the war in Iraq, there is little money left for such critical needs as natural resources and the environment—less than two cents of every tax dollar.” > > The non-partisan National Priorities Project shows how national tax and spending policies impact local communities and states across a broad range of issues. NPP, a non-profit organization, aims to help people respond to federal decisions that affect their daily lives. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [April 15, 2004, 3:23am UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/66 "2004-04-15T03:23:35Z")
**TaxGuy** — Actually, going back to that article by Johnston, here is what he says: > [@](#): > > People making $60,000 paid a larger share of their 2001 income in federal income, Social Security and Medicare taxes than a family making $25 million, the latest Internal Revenue Service data show. And in income taxes alone, people making $400,000 paid a larger share of their incomes than the 7,000 households who made $10 million or more. Since this is IRS data, I presume it is likely based on AGI but I am not sure and don’t know whether his inclusion of S.S. and Medicare taxes included the employer-paid part of the contributions too (which I think most economists argue is effectively a tax paid by the employee). I don’t know where this IRS data is available. The Tax Foundation’s summary of IRS data doesn’t break down the very rich beyond the “top 1%” level. I guess I was also a bit fast-andd-loose when I stated this in that previous post as an “effective federal tax rate,” since one could argue that you need to factor in other taxes such as corporate taxes and estate taxes. And, of course, it is not entirely clear how to assign these. I believe that CBO assigns the corporate taxes to the shareholders, although commentators, especially conservative ones, often like to argue that corporate taxes are passed on to consumers. The truth certainly lies somewhere in between these extremes. I am willing to believe more is borne by the shareholders than the consumers although that is just a WAG on my part. ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [April 15, 2004, 3:59am UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/67 "2004-04-15T03:59:23Z")
And so, as **jshore** continues to argue that the payroll taxes are taxes, **iamme99** finds a cite which not only ignores the amount paid as payroll taxes, it ignores the amounts spent on social security as expenditures altogether. It seems we need to take this whole conversation back to the dictionary and agree on our terms first. BTW, **jshore** , if you look closely at the quote from Mr. Johnston’s article you just posted, he seems to include payroll taxes, but ignore capital gains (and other non income) taxes altogether. I know that some of those taxes were lowered recently, but to zero? Even at that, though, I bet he is including income earned through investments. Any takers? ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [April 15, 2004, 6:11am UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/68 "2004-04-15T06:11:36Z")
> [@iamme99](#): > > Getting back to the subject of taxes: The comparison of military and educational expenditures is sloppy at best, deliberately deceptive at worse. Educational spending is located at the state and local level, not the federal level. For examply, in CA something like 40% of the state budget is spent on education. What percent of the CA budget do you think is spent on national defense? Apples and Oranges, I’m afraid. ---
**Author:** ![iamme99](https://avatars.discourse-cdn.com/v4/letter/i/57b2e6/32.png) [@iamme99](https://boards.straightdope.com/u/iamme99)\ **Post date:** [April 15, 2004, 7:30am UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/69 "2004-04-15T07:30:19Z")
> [@John Mace](#): > > The comparison of military and educational expenditures is sloppy at best, deliberately deceptive at worse. Educational spending is located at the state and local level, not the federal level. For examply, in CA something like 40% of the state budget is spent on education. What percent of the CA budget do you think is spent on national defense? > > Apples and Oranges, I’m afraid. Au contraire. The Feds do contribute some tax dollars to education through various programs and subsidies which are sent to the states (such as Title 1). That’s all the article I posted was counting. As to your quip about National Defense, you know very well that it is the tax dollars paid to the government that provides for national defense (and that covers the supposed defense of all states). I believe the point the article was making was that we spend too much of our tax dollars on the military and serving our debt. What if we spent less on the military and had a balanced budget? We might then choose to spend that extra money on more socially useful items like education and health care. And bonus, the rest of the world might like us better if we didn’t have the means to undertake wars and nation building whenever we elected some misguided fool. In case you’re interested: > [@](#): > > The average household in California paid $8,065 in federal income taxes in 2003. Here is how that amount was spent: > > Military and Defense: $2,375 > Interest on the Debt (Military): $761 > Interest on the Debt (Non-military): $834 > Health: $1,585 > Income Security: $365 > Education: $307 > Veterans’ Benefits: $287 > Nutrition: $216 > Housing: $180 > Natural Resources: $144 > Job Training: $36 > Other: $974 ---
**Author:** ![Razorsharp](https://avatars.discourse-cdn.com/v4/letter/r/53a042/32.png) [@Razorsharp](https://boards.straightdope.com/u/Razorsharp)\ **Post date:** [April 15, 2004, 3:27pm UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/70 "2004-04-15T15:27:22Z")
> [@2sense](#): > > The income. The credit applies to the tax on earned income. Income is divided based on how it is aquired. If you work for it it is earned otherwise it is unearned income. Whew! There for a minute, I thought that “earned” meant that the “tax credit” was earned. Funny thing about that, whenever I do my taxes, my income is not divided on how it is aquired, I am just asked for all sources of income. As I alluded to earlier, this program was entitled “The Earned Income Tax Credit” for the purpose of making palatable, legislation that is considered repugnant by the majority of the citizenry. As “The Earned Income Tax Credit” is an example of Orwellian newspeak, an explaination if the EITC also relies on newspeak. > [@](#): > > The legislative history makes clear that Congress and the White House both viewed the EITC as a de facto\*\* payroll tax\*\* cut, not a welfare program. Giving the “working poor” a cut in their “payroll taxes” has a much more acceptable ring to it than admitting that the ruling elite is cutting their social security taxes as well as their income taxes. Let’s see, the rules of FICA are that the employer matches the employee contributions to the Social Security “trust fund”. So, when the employee’s FICA is cut, does the employer also receive a cut in matching contributions? Why of course not. This is just another contortion and perversion of the written law that is required by the orthodoxy of liberalism. > [@](#): > > We used to have the idea in America that the hard earned dollars folks received in exchange for their labor ought to be taxed at a lower rate than those revenues derived from the labor of others. Yeah, notwithstanding the fact that the “revenues derived from the labor of others” is not only used to pay the wages of the others, but their unemployment insurance, workman’s compensation insurance, medicare and social security as well. As far as the business owner is concerned, if there is any left over, tax the Hell out of it, ‘cause it’s derived from the labor of others. Nuthin’ like some good ol’ class warfare to bolster the Democratic voter base. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [April 15, 2004, 4:12pm UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/71 "2004-04-15T16:12:54Z")
> [@iamme99](#): > > Au contraire. The Feds do contribute some tax dollars to education through various programs and subsidies which are sent to the states (such as Title 1). That’s not what I meant, but maybe I was unclear. In the US, education is a responsibility of state and local governments. The Feds are not supposed to play a significant role. I would aruge that the Feds should spend $0 on education. Now, if you want to add up all the local, state, and federal monies spent on education, plus all the private money spent and compare that to the Defence budget, that might be a good indicator of the value of each to our society. Quoting federal spending on education and the military is pretty much meaningless. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [April 15, 2004, 4:45pm UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/72 "2004-04-15T16:45:29Z")
**Razorsharp** \*Funny thing about that, whenever I do my taxes, my income is not divided on how it is aquired, I am just asked for all sources of income. \* However, if you were applying for the Earned Income Tax Credit, you **would** have to distinguish between your earned income and the rest of your AGI. (Both earned income and AGI would have to be less than $11,260 (for a childless applicant), and your investment income component would have to be under $2600.) _As I alluded to earlier, this program was entitled “The Earned Income Tax Credit” for the purpose of making palatable, legislation that is considered repugnant by the majority of the citizenry._ I don’t see why you think that most citizens would find it “repugnant” to give tax credits to working folks with less than a certain minimum annual income. Public opinion surveys (pdf) do not seem to bear out your opinion: > [@](#): > > Four in ten (43%) voters say that they are very or fairly familiar with the term “earned income tax credit, or EITC,” and those who are at least somewhat familiar with the term generally understand that it benefits low-income families and involves a refund or getting money back from the federal government. When voters hear more about the EITC program, their reaction is strongly favorable—two in three (66%) describe their reaction to the EITC as very or somewhat favorable; just 15% characterize their reaction as unfavorable. This enthusiasm is broadly shared by all Americans, regardless of party identification or income: Republicans (55% favorable, 20% unfavorable), independents (68%, 16%), and Democrats (74%, 10%), as well as voters with household incomes of over $75,000 annually (59%, 19%) and those with incomes of less than $30,000 annually (74%, 9%) all feel favorable toward the EITC. Seems to me that most people like it because it gives low-income people an incentive to work even if they don’t earn enough to live on. The taxpaying public is generally in favor of giving some assistance and/or income support to poor people who work, as well as providing more poor people with incentives to work. _As “The Earned Income Tax Credit” is an example of Orwellian newspeak […]_ Compared to, say, the conservative PR maneuver of trying to rename the “estate tax” or “inheritance tax” as the “death tax” (which is fundamentally absurd, because dead people don’t pay taxes and therefore are not taxed on their deaths), it seems to me like a pretty mild example. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [April 15, 2004, 6:02pm UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/73 "2004-04-15T18:02:18Z")
> [@pervert](#): > > BTW, **jshore** , if you look closely at the quote from Mr. Johnston’s article you just posted, he seems to include payroll taxes, but ignore capital gains (and other non income) taxes altogether. I know that some of those taxes were lowered recently, but to zero? No, there is no evidence he ignores capital gains taxes…That is in fact part of your federal income tax. Capital gains are income, even if they are income that is sometimes treated differently for tax purposes than other income (e.g., now taxed at a lower rate; doesn’t qualify as “earned income” for the EITC; …). As I noted in my last post though, it does appear from the full quote that Johnston considered only at federal taxes directly paid by people on their incomes (income tax, payroll taxes) and not those like the corporate taxes that are indirectly paid and there is ambiguity in assigning. ---
**Author:** ![Razorsharp](https://avatars.discourse-cdn.com/v4/letter/r/53a042/32.png) [@Razorsharp](https://boards.straightdope.com/u/Razorsharp)\ **Post date:** [April 15, 2004, 6:39pm UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/74 "2004-04-15T18:39:29Z")
> [@Kimstu](#): > > I don’t see why you think that most citizens would find it “repugnant” to give tax credits to working folks with less than a certain minimum annual income. Because the whole issue of the EITC is deceptive. Despite your cite, I would venture to say that most people don’t realize that many beneficiaries of the EITC are getting money back that they never paid, and that is being camouflaged under the guise of a “tax credit”. As for cutting “payroll taxes”, if one is still eligible for Social Security benefits, despite not having paid “payroll taxes”, then one is receiving benefits from a “trust fund” that they never paid into. In other words, getting money back that they never paid. What is equally repugnant is the effort that the ruling elite puts into deceiving the citizenry. ---
**Author:** ![Razorsharp](https://avatars.discourse-cdn.com/v4/letter/r/53a042/32.png) [@Razorsharp](https://boards.straightdope.com/u/Razorsharp)\ **Post date:** [April 15, 2004, 6:54pm UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/75 "2004-04-15T18:54:01Z")
> [@Kimstu](#): > > I don’t see why you think that most citizens would find it “repugnant” to give tax credits to working folks with less than a certain minimum annual income. Public opinion surveys (pdf) do not seem to bear out your opinion: I wonder how that survey would have panned out if the participants were asked, “Would you favor giving members of the “working poor” a tax refund that was more than the amount of income tax that they paid?” ---
**Author:** ![Razorsharp](https://avatars.discourse-cdn.com/v4/letter/r/53a042/32.png) [@Razorsharp](https://boards.straightdope.com/u/Razorsharp)\ **Post date:** [April 15, 2004, 7:56pm UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/76 "2004-04-15T19:56:59Z")
> [@Kimstu](#): > > Compared to, say, the conservative PR maneuver of trying to rename the “estate tax” or “inheritance tax” as the “death tax”. I’d say that there is quite a difference between a “PR maneuver” and the official name of a legislative act, but that’s just me. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [April 15, 2004, 9:06pm UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/77 "2004-04-15T21:06:36Z")
> [@Razorsharp](#): > > I wonder how that survey would have panned out if the participants were asked, “Would you favor giving members of the “working poor” a tax refund that was more than the amount of income tax that they paid?” One the one hand, we have \*\*Kimstu’s]/b] cite of a poll. On the other hand we have your hypothetical poll. As a scientist, I have to go with actual data. But that’s just me… ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [April 15, 2004, 9:07pm UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/78 "2004-04-15T21:07:50Z")
> [@Razorsharp](#): > > As for cutting “payroll taxes”, if one is still eligible for Social Security benefits, despite not having paid “payroll taxes”, then one is receiving benefits from a “trust fund” that they never paid into. In other words, getting money back that they never paid. (1) Social security was never meant purely as private retirement accounts…i.e., it is understood that some people would get out more than they put in and vice versa. In particular, those who got benefits in the early years clearly got more out than they put in. It has also generally been believe that social security was progressive with poor getting more out than they put in, although some conservative/libertarian groups like Cato and NCPA have recently argued that S.S. is in fact regressive (in trying to make the case for abolishing it in favor of private accounts). See [url=http://www.ncpa.org/pi/congress/pd051100e.html]here[/rl] for one example. The issue turns out to be fairly complicated because it depends on the rate at which you discount money over time and such. (2) You also have to recognize that the government has been borrowing from the surplus in the social security trust fund to pay for government spending, so in fact, spending for other things is being paid for by money collected through the payroll taxes. Now, one might argue that this is just a temporary thing and the money will be paid back…And, I hope that this is true. But, with the fiscal train wreck that Bush has created, it is not so clear. And, in fact, you have conservatives (even “respectable” ones like Alan Greenspan) now making noises about how we will have to do something to save social security from a crisis that will come about in 2017 or there-abouts once the system is no longer running a surplus. However, the only way in which one can believe that this date is the crisis point is if you accept the idea that the government won’t repay what it has borrowed from the S.S. trust fund. In fact, if the government repays what it borrowed, then the “crisis” in social security doesn’t happen until about 2043…And, that date is so far off right now that the estimates of future economic growth that go into it make it highly subject to revision (and those estimates are apparently quite conservative). > [@](#): > > Let’s see, the rules of FICA are that the employer matches the employee contributions to the Social Security “trust fund”. So, when the employee’s FICA is cut, does the employer also receive a cut in matching contributions? Why of course not. This is just another contortion and perversion of the written law that is required by the orthodoxy of liberalism. As the history I linked to (by a conservative commentator) makes clear, talking about all this as part of the “orthodoxy of liberalism” seems to put Milton Friedman, Andrew Mellon, and Gerald Ford into the camp of liberals. As the link noted: "The EITC has a sterling Republican heritage. " Also, I believe most economists don’t think there is much of a distinction between the part of the tax paid by the employee and the part paid by the employer, since the distinction between having the employer pay half and having the employee pay all but with the employer now including the money he would have paid in the employee’s paycheck is pretty much nil. (I guess the one difference is that if paid to the employee, it would be additional income subject to income tax…so those rates would have to be adjusted too to nil-out the difference.) ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [April 15, 2004, 9:14pm UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/79 "2004-04-15T21:14:07Z")
> [@jshore](#): > > No, there is no evidence he ignores capital gains taxes…That is in fact part of your federal income tax. Ok, so what does he mean when he claims that we only tax half of all income? ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [April 15, 2004, 9:20pm UTC](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228/80 "2004-04-15T21:20:48Z")
> [@jshore](#): > > And, in fact, you have conservatives (even “respectable” ones like Alan Greenspan) now making noises about how we will have to do something to save social security from a crisis that will come about in 2017 or there-abouts once the system is no longer running a surplus. However, the only way in which one can believe that this date is the crisis point is if you accept the idea that the government won’t repay what it has borrowed from the S.S. trust fund. In fact, if the government repays what it borrowed, then the “crisis” in social security doesn’t happen until about 2043…And, that date is so far off right now that the estimates of future economic growth that go into it make it highly subject to revision (and those estimates are apparently quite conservative). Why do you keep saying things like this. Do you really not see the changeover from surplus to deficit SS as a potential crisis? Even if we do not renig on the SS debt, we will still have a sharp decrease in the purchase of government bonds from that source. That is, a sharp decrease in monies collected for **other** expenditures. At that point (2017, not 2043) we will have to cut spending or raise taxes, or both. Given that SS spending will be an enormous portion of government spending by then, cutting spending will be very difficult without cutting SS benifits. It will be a crisis of huge proportions for both sides of the isle, so to speak. [Previous page](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228.md?page=3) [Next page](https://boards.straightdope.com/t/bottom-50-of-wage-earners-dont-pay-taxes-yeah-right/239228.md?page=5)