Taxpayer Is Not a Binary Classification

I've noticed that some people tend to think of "taxpayer" as being a binary classification--i.e., one either pays taxes or one does not, and the amount is irrelevant. For example, here's Ampersand protesting that, contra Megan McArdle, he doesn't just want to tax the rich to pay for his favorite social programs--after all, he pays taxes, too.

Well, that's technically true. But Ampersand once mentioned that a one-percentage-point increase in the payroll tax rate would cost him $2.30 per week, suggesting wages of about $12,000 per year. Income taxes at that level would be negligible, and as an Oregon resident he pays no sales taxes. I gather that he's part-owner of a house, so he probably does pay some property taxes. If we count the full ~15% for payroll taxes, that suggests an annual tax bill of about $3000, barring significant royalty or other non-wage income.

In the US, government at all levels spends nearly $14,000 per person per year. Merely paying a few thousand in taxes does not mean that a person is making a net contribution to the public treasury and thus helping to pay for social programs and various forms of redistribution. These are paid for almost exclusively by people in the top income quintile, and among them the burden is skewed heavily towards the top, with some people paying tens, hundreds, thousands, or even hundreds of thousands of times more in taxes than Ampersand.

Nor are all taxpayers affected equally by changes in the tax structure. While I'm not sure about Ampersand specifically, almost all left-wing proposals for increasing tax revenues are narrowly targeted to the top 5-10% of income earners. While it's true that not everyone in this category is a conservative or libertarian, it's also true that the vast majority of welfare statists are not in this category, so Megan was perfectly correct to say that most people who favor increased government spending want to do it with other people's money.

This post by hilzoy at Obsidian Wings provides another example. Responding to Pat Buchanan's claim that white Americans have spent huge sums of money trying to lift black Americans out of poverty, hilzoy writes:

Who provided welfare, food stamps, etc.? Not white people, but the US government, and through it, the taxpayers. Blacks pay taxes. They helped to provide those programs. To imagine that they did not is, quite literally, to write them out of the citizenry.

Well, no, it isn't. It's an acknowledgement of an incontrovertible fact. Yes, most black Americans pay taxes at some point in their lives, but on average they pay much less per capita than whites do, because of their lower earnings and the progressivity of the tax system. I don't think the IRS collects tax data by race, but I would hazard a guess that blacks pay 5% of the taxes in the US, give or take a few percentage points. While there are a great many black Americans who have made net contributions to the government coffers, there's no question that AFDC, WIC, Medicaid and the like* have, in the aggregate, redistributed wealth from white Americans to black Americans**.

This fallacy is not limited to the left. I've seen conservatives and libertarians appeal to the unfairness of making the working poor pay taxes to subsidize things that benefit primarily the upper and middle classes, like higher education, national parks, and funding for the arts. While I certainly agree that it would be good to scale back these subsidies, it simply isn't true that the working poor are subsidizing these programs. They may be paying taxes, but "taxpayer" is not a binary classification.

*The direction of redistribution due to Social Security is not obvious. Blacks have lower life expectancy than whites, but people with lower lifetime incomes tend to have a more favorable benefit/tax ratio while living.

**This is not to say that these programs haven't actually contributed to the persistence of black poverty, but if that's the case, then welfare statists have no one to blame but themselves.

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The classification is in

The classification is in fact even more complex. Where do you put tax accountants? As taxes go to zero, their wages would tend to zero as well. Are they living off taxes? Do the actual money flux matter? What if you sell your labor to a civil servant who derives his income from taxes?

Responding to Pat Buchanan's

Responding to Pat Buchanan's claim that white Americans have spent huge sums of money trying to lift black Americans out of poverty...

Yes, but if they've done it kicking and screaming, they can still be criticized for not having their hearts and minds in the right place.

Yes, but if they've done it

Yes, but if they've done it kicking and screaming, they can still be criticized for not having their hearts and minds in the right place.

So their hearts and minds are not in the right place if they dislike having their money taken by force and given to others without their consent?

I don't know the context in

I don't know the context in which Pat was speaking, but it seems like he means to say that white Americans are caring and not racist because they've paid so much into the system, apparently for the benefit of blacks. Now if taxes are not voluntary - and we all know they aren't - then how is it some kind of charitable act?

parsing, semantics or merely

parsing, semantics or merely navel-gazing? I can't quite decide the best way to categorise this post. On reflection, I think I'll opt for pointless.What the hell are you trying to argue here?
Relative contribution to/benefit from the social security system is not the issue. There are plenty like me for whom your "binary" argument is irrlevant, because we pay a considerable amount of taxes, far outweighing benefits, and yet don't even approach the income levels of even the merely rich, let alone the wealthy and above.
The reason these people need to pay more is as follows:

The guys who take home billions these days do so by rigging the financial system for their own benefit, then leveraging themselves to the hilt, driving down the capital gains ceiling, and then getting government to bail them out... these are the guys who need to pay. Let's not call it tax, if that makes you feel better. Let's call it a relative fee for differential and preferential access to the levers that allow them to game the system to the detriment of the rest.

Anon, How exactly do you

Anon,

How exactly do you plan you rig the game against the game riggers as punishment/compensation for them rigging the game against you? Isn't it more likely that, the more power you put into the system, the more potential for game rigging, the perpetual game riggers will continue to rig the game in their own favor and against yours, and not the other way around?