The Misinformed Tea Party Movement
Bruce Bartlett, 03.19.10, 12:01 AM EDT
For an antitax group, they don't know much about taxes.
On March 16 the Tea Party crowd showed up for yet another demonstration on Capitol Hill in Washington. Curious about the factual knowledge these people have regarding the issues they are protesting, my friend David Frum enlisted some interns to interview as many Tea Partyers as possible on a couple of basic questions. They got 57 responses--a pretty good-sized sample from a crowd that numbered between 300 and 500 people. (Survey results are here.)
The first question that was asked concerned the size of government. Tea Partyers were asked how much the federal government gets in taxes as a percentage of the gross domestic product. According to Congressional Budget Office data, acceptable answers would be 6.4%, which is the percentage for federal income taxes; 12.7%, which would be for both income taxes and Social Security payroll taxes; or 14.8%, which would represent all federal taxes as a share of GDP in 2009.
Not everyone follows these numbers closely, and Tea Partyers may have been thinking of figures from a few years ago, before the recession when taxes were higher. According to the CBO, the highest figure for all federal taxes since 1970 came in the year 2000, when they reached 20.6% of GDP. As we know, after that George W. Bush and Republicans in Congress cut federal taxes; they fell to 18.5% of GDP in 2007, before the recession hit, and 17.5% in 2008.
Tuesday's Tea Party crowd, however, thought that federal taxes were almost three times as high as they actually are. The average response was 42% of GDP and the median 40%. The highest figure recorded in all of American history was half those figures: 20.9% at the peak of World War II in 1944.
To follow up, Tea Partyers were asked how much they think a typical family making $50,000 per year pays in federal income taxes. The average response was $12,710, the median $10,000. In percentage terms this means a tax burden of between 20% and 25% of income.
Of course, it's hard to know what any particular individual or family pays in taxes, but according to IRS tax tables, a single person with $50,000 in taxable income last year would owe $8,694 in federal income taxes, and a married couple filing jointly would owe $6,669.
But these numbers are high because to have a taxable income of $50,000, one's gross income would be higher by at least the personal exemption, which is $3,650, and the standard deduction, which is $5,700 for single people and $11,400 for married couples. Owning a home or having children would reduce one's tax burden further.
According to calculations by the Joint Committee on Taxation, a congressional committee, tax filers with adjusted gross incomes between $40,000 and $50,000 have an average federal income tax burden of just 1.7%. Those with adjusted gross incomes between $50,000 and $75,000 have an average burden of 4.2%.
Even though the Tea Partyers were specifically asked about federal income taxes, it's possible that they were thinking about other federal taxes as well, such as payroll and excise taxes. According to the JCT, when all federal taxes are included, those earning between $40,000 and $50,000 have an average tax rate of 12.3%, and those earning between $50,000 and $75,000 pay a rate of 14.5%.
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