The “Non-Taxpaying Class”

In an article for The Washington Post, E.J. Dionne predicts that we “are about to hear a great deal about how working Americans at the bottom of the economy are not paying enough in taxes.” (Both TBogg and Talking Points Memo have linked to the Post article.)

According to Dionne, The Wall Street Journal‘s editorial page “always provides important clues about the Next New Thing among conservatives, and there it was last week assailing ‘The Non-Taxpaying Class.'”

The WSJ article decries a system under which “almost 13% of all workers have no tax liability and so are indifferent to income tax rates. And that doesn’t include another 16.5 million who have some income but don’t file at all.” Who, the editorial asks, “are these lucky duckies?”

Dionne does a good job of analyzing the actual burden on low-income taxpayers, who he notes are disproportionately burdened by sales and excise taxes. He observes that “between 1979 and 1997, the last year for which figures are available, the average after-tax income of the top 1% of households, adjusted for inflation, rose by $414,000 — a 157% gain. For the middle fifth of households — the middle of the middle class — the comparable gain was 10 percent, or $3,400. The bottom fifth was stagnant.”

Dionne does not note the most recent U.S. Census Bureau report, which establishes that poverty among low-income taxpayers is on the rise and that median household income is falling.

According to the Bureau, “the nation’s poverty rate rose from 11.3% in 2000 to 11.7% in 2001. Median household income declined 2.2% in real terms from its 2000 level to $42,228 in 2001.”

The poverty rate and the number of poor “increased among several population groups between 2000 and 2001, including all families, married-couple families, unrelated individuals, non-Hispanic Whites, people 18-to-64 years old and the native population.”

As if the rise in poverty weren’t enough, homelessness is becoming a major issue, especially in urban areas. In New York City alone, as of mid-November, there were 36,000 people using the shelter system–an all time high. Roundly criticized for housing the homeless in abandoned jails, the city is now considering a plan to place them on defunct cruise liners.

Those lucky duckies.


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