Commentary: Prosperity Policy: We All Pay Taxes

Article excerpt

Who pays taxes?

The indisputable answer is that we all do - rich, poor and middle class alike. Moreover, we all generally pay a similar share of our income to support schools, roads, defense and other public services nationally and locally.

Recently, of course, the question has generated heated controversy, especially regarding presidential nominee Mitt Romney's leaked comment that it is not his job to worry about the 47 percent of Americans who don't pay federal income tax.

While it's true that nearly half of American households paid no federal income tax in 2011, according to the Tax Policy Center, this is not the whole story. Almost two-thirds of those households include workers who are paying payroll taxes to support Social Security and Medicare. Another 25 percent are seniors living on limited retirement income. Most of the remaining households earn under $20,000 a year and benefit from tax credits, like the earned income tax credit and child tax credit, designed to encourage work and help lift very low-income families with children out of poverty.

In addition, while many lower-income households are exempt from federal income tax, all pay a wide range of state and local taxes, including taxes on property, fuel, cars, and other goods and services. …