Akkam’s Razor

In light of the first of the stimulus checks being deposited into Americans accounts, it is high time we discussed the previous old next new conservative outrage - Freeloaders!

Our friends on the right have quietly been condemning the freeloaders who will be receiving stimulus rebates, despite having paid no income tax, previously referred as Lucky Ducks in the Wall Street Journal (note how Awesome it is to be making $12k annually and paying no Federal Income Tax).

The Tax Foundation describes it thusly:

Just to be clear, that means half of the households in America have no income tax liability - a number that’s grown 50% since Bill Clinton left office and the Bush tax cuts were enacted.

So do the working poor get nothing from the federal government? No - and in fact, quite to the contrary. The working poor are the biggest beneficiaries on the other side of the federal fiscal coin: spending.

In early 2007, the Tax Foundation released a ground-breaking study comparing the amount of taxes paid by individuals versus the dollar values of government spending received.

The results show that the bottom 20% of households receives $14.76 in federal spending for every dollar paid in federal taxes. On the other end of the spectrum, the top 20% of households receive 32 cents in federal spending for every dollar paid in federal taxes.

In fact, as the chart below shows, the bottom 20% receive $23,176 more per year in federal spending than the pay in federal taxes. The top 20% pay $38,939 more in federal taxes than they receive in spending. This is in no small part due to the fact that so many low-income families have no income tax burden after applying their credits and deductions.

Expect this argument to draw in the arguments on the regressive nature of our tax code, the excessive burden carried by the wealthy, and most importantly, that the poor are poor solely due to their own lazy, shiftless, and ambitionless behavior.  You’ll also likely hear a renewed pitch for the flat-tax and/or a national sales tax.

‘Tis a beautiful argument, actually, as it rounds up several of conservatives favorite claims. The poor are parasites, taxes dis-incentivize the middle class from attempting upper-class mobility, and that the investment of wealthy supply-siders are actually the engine that drives our (consumption driven economy) and are soaked by taxes.