In the last few years two terms have come to creep into discussions about taxation in the US. These ideas are definitely being driven by the right wing echo chamber. So today we are going to examine what they are, how they are used, and the reality of people at different income levels.
Lucky ducks–these are the folks that file income tax returns, but whose income after deductions and credits owe no income tax. The Wall Street Journal editorial pages started this term, and have been using it since 2002.
Job creators–in the past few years this term has been thrown around to describe the wealthy, and defend the lower tax rates that they deserve. You may have heard something like this, “you don’t raise taxes on job creators during a down economy.”
Why are these terms being used, basically to convince people that the Republican’s economic agenda isn’t class warfare, but fairness.
So let’s breakdown the myth of the Lucky Ducks, these folks don’t make enough to pay federal income tax. Sadly in the down economy, the percentage of the population that falls into this category has been rising. As average employees wages have stayed stagnant, this is an inevitable result.
However, when Lucky Ducks is talked about, it is a not used to point out the stagnant wages for the majority of Americans. It is used to make tax payers think that there are a bunch of freeloaders that aren’t paying taxes. That those who aren’t Lucky Ducks have been supporting those lazy freeloaders.
But are they lazy freeloaders? While the statistic that is used is the number of people who file federal income taxes (those with an income) who don’t owe federal income taxes. People who have no income don’t have to file taxes, so this is measuring people with income, generally workers, who aren’t generally lazy or freeloaders.
In the US working people have to pay payroll taxes, 6.2% to Social Security and 1.45% to Medicare (or 7.65%) and double that if you are self employed as you are paying employee and employer shares. While these Lucky Ducks are not paying income tax, they are still paying payroll taxes on their income. Not as Lucky as they want you to think, and be angry about! That doesn’t get into state income, property or sales tax that these folks likely are paying too (double taxation!!!).
What about the myth of the job creators? For a few years, I have been hearing this statement, “no poor person employed me!” In the last few years as the Bush tax cuts were set to expire, and Democrats were looking to let the tax rates go up on the wealthiest Americans the job creators became the endangered species of the Republicans. To paraphrase a familiar line, “Won’t somebody please think of the Job Creators?”
But I want to think about this for a moment? They are trying to say that wealthy American tax payers, individuals or couples, are job creators. Now I believe that wealthy people do hire other people directly, maybe a housemaid, butler, driver, nanny, exercise coach, dietitian, publicist and so on. But how many people do they hire? Does a change in 3% marginal tax rate mean they go from hiring 3 people to 4? To that 4th person, that is huge, but I don’t call these people Job Creators.
I think we need to start asking Republicans, do you consider yourself wealthy (Mitt Romney), if yes, how many people do you employ. And when I say employ, you pay the employer share of payroll taxes! If you hire a service who employs a person who provides a service for you, the service is the employer, not you. If you create a company and that later employees people, than I will agree you are a job creator, but that isn’t a ton of the wealthy.
I have been thinking about this a for a long time, because we are all job creators if we are actively involved with the economy. When I go shop at Target or the grocery store I am buy products, along with the other customers. Our demand for those products are creating jobs for the people extracting the resources that are manufactured (more jobs), then transported (jobs) to a store (jobs). My demand along with my fellow consumers are creating that demand and those jobs.
Not only that, but the average consumer probably creates more jobs than the super wealthy in most sectors (not Lear Jets). Think about this, you have a wealthy family that makes $5,000,000. Maybe they have a principal residence and two vacation properties, a housemaid and a driver. Then you have 100 families who make $50,000 (same as that $5,000,000 wealthy family) who don’t directly hire anyone and just have one home. Now those 100 families are going to buy more toilet paper, more toothpaste, food, etc… than the multi millionaire with their 3 homes and 2 employees. For the people who make toilet paper or toothpaste, those employee’s jobs are based on the demand (job creation) of all them, but it is the demand of the average family collectively that is creating more jobs than the multi millionaires.
It is time for us to think past the language that is being used to support tax policies that benefit the ultra wealthy. Average Americans are struggling enough in the current economic climate. We need jobs, not class warfare, but we have been getting attacked for years and usually don’t even realize the Black Ops/Psy Ops that have been waged against us workers.
Lucky Ducks who may not pay any federal income tax definitely pay taxes, and usually are pretty hard workers. All of us that are buying things are job creators. The ultra wealthy may create jobs in the luxury industries, but they are not the only job creators and for a large part of society create less jobs (collectively) than the average American, including those who are not working, but still consuming.
-Josh
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