NY Times' Leonhardt: “47 percent” tax talking point is false

From David Leonhardt's April 13 New York Times column:

Forty-seven percent.

That's the portion of American households that owe no income tax for 2009. The number is up from 38 percent in 2007, and it has become a popular talking point on cable television and talk radio. With Tax Day coming on Thursday, 47 percent has become shorthand for the notion that the wealthy face a much higher tax burden than they once did while growing numbers of Americans are effectively on the dole.

Neither one of those ideas is true. They rely on a cleverly selective reading of the facts. So does the 47 percent number.

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So a much greater share of income is now concentrated at the top of distribution, while each dollar there is taxed less than it once was. It's true that raising taxes on the rich alone can't come close to solving the long-term budget problem. The deficit is simply too big. But if taxes are not increased for the wealthy, the country will be left with two options.

It will have to raise taxes even more than it otherwise would on everybody else. Or it will have to find deep cuts in Medicare,Social Security, military spending and the other large (generally popular) federal programs.

All the attention being showered on “47 percent” is ultimately a distraction from that reality.

The 47 percent number is not wrong. The stimulus programs of the last two years - the first one signed by President George W. Bush, the second and larger one by President Obama - have increased the number of households that receive enough of a tax credit to wipe out their federal income tax liability.

But the modifiers here - federal and income - are important. Income taxes aren't the only kind of federal taxes that people pay. There are also payroll taxes and capital gains taxes, among others. And, of course, people pay state and local taxes, too.

Previously:

Hannity falsely claimed “50 percent of American households no longer pay taxes”

Do conservative media figures want to raise taxes on middle- and low-income Americans?