You’d think when the Huffington Post’s top writer on finance writes about the tax code, he’d understand at least how the tax code works. But in an age when “finance” editors, like the HuffPo’s Mark Gongloff, are demonstrably anti-business, pro-Occupy and work as shills for progressive ideas, facts take a back seat to ideology, outrage and agendas.
The latest outrage Gongloff has taken issue with is how little of the U.S. tax revenue, on a percentage basis, is generated by corporate taxes, as opposed to the good old days of the 1950s.
He even has a chart to prove it
“What this shows,” writes Gongloff, “is how dramatically corporate tax contributions have shrunk in the past several decades, and how our personal taxes have risen to fill the gap. Payroll taxes now make up 35 percent of all federal government tax receipts, up from 11 percent in 1950. Corporate income taxes, meanwhile, now make up less than 10 percent of federal revenue, down from about 26 percent in 1950.”
The chart actually shows none of that.
While technically it’s true that corporate taxes as a percentage basis have gone down, individual taxes aren’t going up in order to fund tax cuts for corporations. Corporations are generating more tax revenues then they did in the good old days, in fact.
Payroll taxes are going up because programs like Social Security and Medicaid-Medicare-which are funded by payroll taxes- are growing faster than any other area of the government budget.
In other words, the “garbage in” in the guise of payroll taxes is growing because social insurance programs, like Social Security, are sending the “garbage out” in the form of higher expenses for an aging population.
And as even Gongloff acknowledges in a later update to his story, “[the] chart of course does not reflect the fact that employers typically cover half of the payroll taxes collected by the government. Assuming companies pay half of the payroll taxes in this chart, the total tax burden for individual Americans is reduced to about 63 percent of total federal revenue, instead of 81 percent, as I estimated in an earlier version of this story. But that is up from about 45 percent in 1950.”
Gongloff doesn’t understand how payroll taxes work apparently- or as liberals would say, he doesn’t care.