“We’re approaching nearly half of the United States population that doesn’t pay any income taxes,” Mr. Perry said in Iowa, when asked about combating an “entitlement culture” in the U.S. “And I think one of the ways is to let everybody, as many people as possible…be able to be helping pay for the government that we have in this country.” In Nashua, N.H., Mr. Romney hit a similar theme: “We want to make sure people do pay their fair share.”
Broadening the tax base, simplifying the tax code and lowering tax rates have long been prescriptions for a more efficient tax system, notably from the right. The idea is likely to be a major issue as a congressional supercommittee seeks at least $1.2 trillion in deficit reduction by Thanksgiving.
Of the poorest 20% of American households, those earning less than $16,812 a year, 93.4% pay no income tax. But even 30% of the middle class earning between $33,542 and $59,386 are exempt. Some Republican economists say the tax policies that cause this phenomenon have gone too far, contending that people who don’t pay income taxes have an incentive to support politicians who promise more federal programs, since they aren’t paying for them. …
…About half of the households that pay no income tax do so simply because the standard deductions for tax filers and dependents are large enough to negate taxable earnings. In addition, nearly half of the remainder who were knocked off the tax rolls because of other tax measures are seniors, according to the Tax Policy Center.
The elderly who do not itemize their taxes get a larger standard deduction and most can exclude some or all of their Social Security from being counted as income. Repealing those benefits would subject 16.3 million more households to income taxation.
In other words, it’s wrong to raise taxes on the wealthy when we can squeeze money out of Grandpa.