Beltway Confidential

The 47 percent can be Republicans, too

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Beltway Confidential,Timothy P. Carney,Taxes,Republican Party

Many Republicans worry excluding middle-income Americans from the income tax will make these people more liberal, because they won't have "skin in the game."

Michele Bachmann made this argument while running for President. Famously, so did Mitt Romney.

Today, former Bush spokesman Ari Fleischer uses this argument to explain shutdown strife, writing on Twitter:

In a country in which 1/2 the people pay income taxes & 1/2 don't, is it any wonder we're so polarized about what the role of gvt should be?

I find this point of view completely unconvincing and counterproductive.

What evidence is there that knocking people off the income tax rolls makes them warmer to big government or less concerned about federal spending? As Ramesh Ponnuru asked at the American Enterprise Institute when discussing Mike Lee's tax plan, did expanding the child tax credit make middle-class parents more liberal?

Here's one theoretical scenario of the 47 percent who pay no income tax:

A married couple living outside of Bloomington, Indiana. The husband has a pretty good job, and he makes $58,000 a year while she stays home and raises the kids. In the suburbs of Bloomington, that's enough to live a nice, middle-class life in a three-bedroom home.

The personal exemption is $3,900, which, times five, means their first $19,500 is tax-exempt. The standard deduction for married couples is $12,200. Let's say the two of them pay about $500 in student-loan interest a year. Their total taxable income is $25,800.

The first $17,850 is taxed at 10 percent, meaning $1,785 in taxes. The rest is taxed at 15 percent, adding $1,192.50 to their tax bill, for a grand total of $2,977.50.

But in comes the child tax credit to the rescue! At $1,000 per kid, this reduces their federal income tax to zero.

Of course, they still pay Social Security tax, Medicare tax, sales tax, state income tax, excise tax, and if they own their home, they pay property taxes.

Does their zero dollars in federal income tax mean they don't really care how the federal government spends its money? I doubt it. I doubt these people feel like non-taxpayers.

Here's the thing: this family, pre-Bush tax cuts, would have owed federal income taxes.

First, their standard deduction would have been lower without Bush's repeal of the marriage penalty for low-and-middle-income workers, adding about $300 to their tax bill. Second, that income currently taxed at 10 percent would have, without Bush, been taxed at 15 percent, adding about $900.

Finally, the law increased the child tax credit from $500 to $1,000 per child. Without that, this family would owe an extra $1,500.

So, the Bush tax cuts brought this family's income tax from about $2,600 down to zero. It probably had this effect on many families. Did this make these parents more liberal?

So here's one way to owe no federal income tax: Have a few kids and live in a part of the country where you can get by on a mid-five-figure income — in other words, being a stereotypical Republican.

Do Fleischer, Romney, and Bachmann want to tell these people they're not Real Republicans?

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