Tuesday, June 28, 2011

ON THE "DEADBEATS"

A lot of conservatives have been whining about the fact that the less than 50% of American households pay income tax and they imply that the liberals/progressives are to blame for this situation.

First of all, Milton Friedman, a conservative economist, came up with the idea of the Feds giving money to poor people below a certain income level.  Today that is called the Earned Income Tax Credit.

In addition, Bruce Bartlett points out that Republican presidents have been responsible not only for signing the EITC but also for expanding it:
But the growth of the non-income-taxpaying population is largely a result of Republican tax policies. The earned-income tax credit is the main reason those with low incomes are largely exempted from federal income taxes. Originated by Gerald Ford, it was expanded by both Ronald Reagan and George H.W. Bush as a better way to help the working poor than raising the minimum wage, which they believed would increase unemployment.

According to the Tax Foundation, in 1974, before the earned-income tax credit was instituted, 19.2 percent of tax filers had no federal income tax liability. This rose to 25.2 percent in 1975 when the credit took effect.

During the 1990s, about 24 percent of filers had no income tax liability, but this number took a big jump during the George W. Bush administration as Republicans added a large child credit to the tax code. The percentage of filers with no income tax liability rose to 36.3 percent in 2008, from 25.2 percent in 2000.

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