Tea Parties Draw Small Crowds – Are Taxes Too Low?

2009-04-15-hartford-tea-party-106 Hartford, CT Anti-Tax Rally

Anti-tax tea party rallies took place across the nation on tax day, April 15th.   All things considered, including the warm spring weather, the size of the crowds protesting seemed oddly small.

MSNBC -Whipped up by conservative commentators and bloggers, tens of thousands of protesters staged “tea parties” across the nation Wednesday to tap into the collective angst fueled by a bad economy

“Frankly, I’m mad as hell,” said businessman Doug Burnett at a rally at the Iowa Capitol, where many of the about 1,000 people wore red shirts declaring “revolution is brewing.” Burnett added: “This country has been on a spending spree for decades, a spending spree we can’t afford.”

In Boston, a few hundred protesters gathered on the Boston Common — a short distance from the original Tea Party — some dressed in Revolutionary garb and carrying signs that said “Barney Frank, Bernie Madoff: And the Difference Is?” and “D.C.: District of Communism.”

Tens of thousands nationwide,  1,000 in Iowa and only a few hundred in Boston, the site of the original Tea Party!  What gives?  Tens of thousands, in a nation of 300 million, is a statistical non event.

Who Cares, If You Are Not Taxed?

Did the small number of protesters indicate that people are not upset by taxes, or was it a case of  “why waste my time – nothing will change”?  Perhaps it was something else, such as the fact that a relatively small number of households pay virtually all of the individual income taxes collected.  Consider the following:

NEW YORK (CNNMoney.com)

The top fifth of households made 56% of pre-tax income in 2006 but paid 86% of all individual income tax revenue collected, according to the most recent data available from the Congressional Budget Office.

But once the various tax breaks to which they’re entitled are counted, the burdens of low- and middle-income tax filers as a group has been fairly low.

The Tax Policy Center estimates that for 2009, 43% of tax units (most of which are lower income households that may or may not file a return) will have no income tax liability or will have a negative income tax liability, meaning the government will actually pay them.

Wall Street Journal

The federal version of this spinning top is the tax code; the government collects its money almost entirely from the people at the narrow tip and then gives it to the people at the wider side. So long as the pyramid spins, the system can work. If it slows down enough, it falls.

It’s also what’s called redistribution of income, and it is getting out of hand.

A very small number of taxpayers — the 10% of the country that makes more than $92,400 a year — pay 72.4% of the nation’s income taxes. They’re the tip of the triangle that’s supporting virtually everyone and everything. Their burden keeps getting heavier.

As a result of the 2001 tax cuts enacted by a bipartisan Congress and signed by President George W. Bush, the share of taxes paid by the top 10% increased to 72.8% in 2005 from 67.8% in 2001, according to the latest data from the Congressional Budget Office (CBO).

According to the CBO, those who made less than $44,300 in 2001 — 60% of the country — paid a paltry 3.3% of all income taxes. By 2005, almost all of them were excused from paying any income tax. They paid less than 1% of the income tax burden.

It’s time to create an Economic Growth Code whose purpose is to fix and grow the economy, not redistribute massive amounts of wealth. A new tax code that creates growth and reforms our entitlement system is the only way to dig our way out of the hole we’re in.

Not only is the current code flawed from top to bottom, it is used by politicians to divide the public along class lines and fails to promote prosperity.

I’d also create a mechanism so tax rates go up or down for everyone — no more dividing the country by lowering taxes for some or raising them only for others. A revenue system whose purpose is to pay the government’s bills should apply fairly to one and all. If Congress wants to raise or cut taxes, it should do so for everyone.

Another benefit is that such a system will create an environment in which spending programs receive the scrutiny they deserve. It’s funny what happens when everyone pays the bills; Americans may want less spending so they can pay fewer bills.

Many Had No Reason To Protest

The stats on who actually pays taxes explains the low turnout of tax protesters.   If you are not paying taxes, which is the case for over 50% of the country’s wage earners, what do you have to protest?

Why the no show turnout for the 40% of workers who pay 30% of the taxes?   My guess is they probably couldn’t afford to take the day off.   And as for that exalted group in the top 10% of wage earners who pay 70% of the taxes, they were probably doing what got them into the top 10% – working hard to support the 50% that don’t pay taxes.

The federal tax code was never meant to tax “fairly” but has instead been used as an instrument for implementing   social policy and income redistribution.   Redistribution of wealth, necessary to some extent, has now reached a dangerous point when 50% of wage earners pay no taxes.  Those who are not taxed can chose to be wrongly  indifferent to the level of taxation or spending since it has no impact on them.  Politicians, of course, understand this situation and by promising more to the majority of voters who pay the least, keep themselves in office thus perpetuating trillions in deficit spending.   Those who pay the most have effectively been disenfranchised from the political process due to their small voting numbers.  At some point this untenable situation collapses of its own weight as the small number of people supporting the system are eventually taxed out of existence.

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Hartford, CT Tea Party

Hartford, CT Tea Party

Craig Stahl, Connecticut, who participated in the Hartford, CT Tea Party had this comment for Comrade Obama:

“Remember the focus of the TEA Parties is not just taxes, but the massive
spending by all Governments (state & federal), and the sudden shift toward
socialism. That will result in massive debt for our grandchildren.”

One Response to “Tea Parties Draw Small Crowds – Are Taxes Too Low?”

  1. Taxpayers are not familiar with the concept of getting paid to stand in a protest, having been community organized.

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