American Republic Online

Greg Mankiw points out a Cato report on the tax share for the rich and poor:

Hmmm…so the bottom 50% of income earners (the so-called poor) pay around 2% of their income in taxes and the top 1% pay 23%? Looks progressive to me. So how does one lower someone’s tax “burden” by any noticeable amount if they’re only really paying a couple hundred bucks into the system? Oh wait, Edwards reminds us that

…these data do not include the tens of billions of dollars sent to lower-income families as a result of the earned income tax credit, and thus it overstates taxes paid by the bottom group.

Negative taxes! And how do you give “poor” people free money? Why, just raise taxes on the rich. Not only will you not pay taxes, but you get some of the taxes rich people paid!

However, politicians can lower their taxes by 1%, and effectively cut the taxes in half. Talk about misleading statistics…

And, of course, the only tax system that actually really eliminates taxes for those below the poverty line is the Fair Tax.

One more side comment. The legend for the above graph could read: Bush; Clinton, Bush. So W’s tax cuts essentially repealed Clinton’s tax raises. Any guesses what the graph will look like if another Clinton is elected to office?