Are too many paying no taxes at all? Issue is getting a hard look

It’s a standard line in Republican presidential candidate Michele Bachmann’s stump speech.

“We live in a world where only 53 percent of Americans pay federal income tax, 47 percent pay nothing,” the Minnesota congresswoman recently said in Iowa.

Bachmann’s figures are roughly correct: By most estimates, 46 percent of American households had no federal income tax liability this year, either because they didn’t make enough money or their credits, exemptions and deductions exceeded their tax bill. Some filers without an income tax bill even got refund checks from Uncle Sam.

Other Republicans and conservatives have echoed her concerns, suggesting tax reform that could include a required minimum payment from almost everyone.

“The poor need jobs, and they also need to share some of the responsibility,” Republican Sen. Orrin Hatch of Utah said last July.

Sen. Roy Blunt, a Missouri Republican, also insists it’s a mistake to allow some taxpayers to pay no federal income levy. “I do think you value what you pay for,” Blunt said. “Whether that’s a copay at the doctor’s office, or actually having a stake in the income tax system.”

But Democrats and some liberal groups contend the GOP’s federal income tax claims are misleading. Even Americans who don’t pay income taxes pay a bucketful of other taxes and fees, they point out.

“All Americans pay taxes,” Citizens for Tax Justice, a liberal public interest group, noted recently. “Everyone who works pays federal payroll taxes. Everyone who drives pays federal and state gas taxes. State sales taxes affect everyone who shops, and state and local property taxes affect everyone who owns or rents a home. Most states have income taxes.”

The argument over the federal tax structure is expected to move to the center of the presidential campaign next year. It’s already part of the debate over the federal deficit, and GOP candidate Herman Cain rose in the polls after proposing major cuts in federal income taxes and a new national sales tax as part of his 9-9-9 proposal.

Republicans want to reform taxes for a variety of reasons, of course — lower tax rates, for example, would spur job creation, they say — but many also think requiring an income tax payment from everyone would make the system more fair.

But some who study the tax code are worried that major federal tax reform could upset the delicate balance among all the taxes Americans pay, potentially making the tax system less fair. That’s particularly true because states and cities also are discussing major changes in the way they collect the money needed to run their branches of government.

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