Beware of the Tax Day Lies

There's an old line about "Beware, the Tax Man Cometh." Actually a better line might be "Beware, the Press Cometh with Tax Misrepresentations. Expect a series of stories on the AMT and high taxes, but little on things like Republican policies make taxes so high, are those paying the most in taxes get the largest share of income and so forth.

So to help everyone out, return to 2004 for Elephant Lies week-long look at the U.S. tax situation. The following are only snippet. For more, read the full version:

April 12 - In the April issue of SmartMoney (a Wall Street Journal publication) several families taxes are reviewed, such as the family from Missouri who under the AMT will pay 15.7% of their 182,300 adjusted gross income to the feds. Another family makes $90,000 finds themselves paying 9.2%. How are these people paying these amounts? Numerous exemptions bring their level well below the 21.4% paid by the top 10% of Americans (those making over $92,000 in 2001)

April 13 - The Tax Foundation shows that the top 25% saw their tax payments increase from 17.5% to 18% of income from 1984 to 2001, yet that group's share of overall income went from 57.5% to 65.2%. So for a small increase in taxes they got a huge increase in the overall share of U.S. income.

April 14 - What many people don't understand is that different parts of income are taxed at different levels. People understand that there are different tax rates on different income levels (10%, 15%, 25%, 28%, 33%, 35%), but conservatives have deceived the public into thinking that if they earn over a certain amount ALL of their income will be taxed at the higher level. In reality, different parts of a person's income are taxed at the different levels. For example, for singles, currently taxable income (AGI minus deductions) up to $7,000 is taxed at 10%, income from $7,001 to $28,400 is taxed at 15%, and so forth. For a complete listing of rates see Yahoo's tax center.

April 15 - When Reagan took office the national debt was around $930 billion dollars. When he left it was $2.6 TRILLION, a 280% increase. For comparison, the debt was around $4 trillion when Bill Clinton took office and around $5.6 when he left, a 40% increase over eight years. Today the debt is $7.1 trillion, a $1.5 trillion increase in THREE years. Most of the increase during Clinton's term was left over from Bush I, which was a hangover from Reagan. In Clinton's final THREE years the debt only increased by $260 billion or 4.8%.