Conservative politicians and corporate lobbyists (coincidence, right?) have constructed a highly effective narrative about taxes. It is a governmentaphobia that enlists the very people hurt by its advancement. In many ways it has come to be taken for granted as common knowledge.
However, this does not mean that it is any way accurate, factual or backed by data, events or statistics. Here are some actual facts about our tax system to burst that fictitious balloon.
1. We don’t have a progressive tax system. A truly progressive tax system would ask those who are the most well-off in America to contribute the largest share of their income in taxes. Our federal taxes are progressive, but when you account for state, local and sales taxes, top-line taxation rate isn’t really progressive at all.
2. We’re one of the least-taxed countries in the world. Though the animating impulse of much of conservative politics is that we’re over-taxed, total government receipts are less in the United States than they are in any other member of the Organization for Economic Co-operation and Development, as a percent of GDP.
3. Not many companies pay the corporate tax rate—and some don’t pay any corporate taxes at all. Politicians and corporate lobbyists are fond of saying the US corporate tax rate of 35 percent is the highest in the world, which is technically true—but thanks to expansive tax loopholes, many corporations don’t pay nearly that much.
4. Some of your tax dollars are given to hugely profitable companies. Many companies have a negative tax rate—meaning they actually get money from the government. This can come in the form of federal tax breaks and other preferential treatment of certain financial instruments. Then consider the subsidies given directly to industry, along with the safety net programs some of these companies force employees to rely on, and the number gets quite big.
5. Meanwhile, some people are actually taxed into poverty. Many high-profile conservatives like to complain about their supposedly oppressive tax rates. But there’s one group—low-wage childless adults—who can literally be taxed into poverty.
6. Washington doesn’t like to address the deficit by raising taxes. There has been quite a bit of deficit reduction talk—and action—since 2008. Despite the fact that, as noted, government receipts in the United States are extremely low, a vast majority of the savings that DC has found has come from cutting things, not raising more revenue.
7. Much More Revenue Is Out There. In order to raise more tax revenue, corporations paying negative tax rates are a logical place to start, as are the very wealthy. They are the only ones seeing their income increase, rather than decrease.
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