There is a misconception, which the Republican noise machine has pushed relentlessly for the last few decades, that Democrats want high taxes. The key to this misconception is that it lumps the poor, the middle class, and the rich together. Democrats do not want high taxes for the poor and middle class. Democrats want fair taxes, which in many states would require raising taxes for the rich so that the poor and middle class don’t have to pay more than they should. This may sound like class warfare, and Republicans make sure to call it class warfare whenever possible, but it isn’t. It is just a desire for fairness. The reason why raising taxes on the rich is needed is because the current tax structure in most of the country is not fair, it favors the rich.
• Virtually every state tax system is fundamentally unfair, taking a much greater share of income from low- and middle-income families than from wealthy families. The absence of a graduated personal income tax and overreliance on consumption taxes exacerbate this problem.
• The lower one’s income, the higher one’s overall effective state and local tax rate. Combining all state and local income, property, sales and excise taxes that Americans pay, the nationwide average effective state and local tax rates by income group are 10.9 percent for the poorest 20 percent of individuals and families, 9.4 percent for the middle 20 percent and 5.4 percent for the top 1 percent.
The current tax structure in most of the country results in the rich paying far less in taxes, after all taxes are taken into account, as a percentage of income than do the poor and middle class. The reason why this is the case is because income taxes for the rich have been steadily cut at the national level and in many states, while payroll taxes have not been cut, and property taxes and sales taxes have been increased. Payroll taxes, property taxes, and sales taxes hit the poor and middle class much more than they hit the rich.
Democratic governor candidates in Illinois, Kansas, and Wisconsin want to reverse the current unfair tax structure in their states, so that the middle class can end up with tax cuts.
In Illinois, Democratic Governor candidate J.B. Pritzker wants to change the current flat income tax structure, which has resulted in higher than average property taxes and sales taxes, to a progressive income tax structure that will result in higher income taxes for the rich. A progressive income tax is already in place in 34 other states and would help lessen the reliance on property taxes and sales taxes by local communities, so that they can fund their schools without unfairly hitting the poor and middle class for the bulk of their revenue:
Pritzker’s solution to that, at least in part, has been to change the state’s income tax from a flat rate to one that would hit wealthier people more and lower-income folks less. That would take at least two years, however, because a needed constitutional amendment could not be approved by voters at least until the 2020 election. Pritzker said he has a short-term remedy: raise the overall rate, but then effectively lower it for most taxpayers by adding and expanding deductions for those with low and moderate incomes.
In Kansas, where the former Republican Governor Sam Brownback cut income taxes for the rich while increasing sales taxes for everyone else, almost bankrupting the State, Democratic Governor candidate Laura Kelly wants to do the opposite: cut sales taxes in order to lower taxes for the poor and middle class:
Kelly, a Topeka member of the Kansas Senate, said she would urge the Legislature to pass stair-stepped reductions in the state’s 6.5 percent sales tax on food. She offered no timeline, but said adjustments could be linked to revenue growth.
“A stable, balanced state budget is essential to a growing economy — as we’ve seen in the last 15 months,” Kelly said. “It is also critical to providing real tax relief for working men and women and their families. That’s why once the state’s finances have fully stabilized, the first order of business will be to reduce the sales tax on food.”
Kelly said she supported legislative efforts to reduce the sales tax on food in 2012, 2015 and 2016 “because we all know that a little bit can go a long way for our families.”
The Kansas sales tax rate was increased to its current level in 2015 by Gov. Sam Brownback in response to deep shortfalls in tax revenue. Under Brownback’s supply-side economic experiment, 330,000 business owners were exempted from state income tax in 2012. Accompanying cuts in individual income tax rates added to the revenue decline, but promised job growth and surge in tax revenue didn’t occur.
In Wisconsin, where the current Republican Governor Scott Walker has made a mess of the State by cutting taxes for the wealthy, the Democratic Governor candidate Tony Evers wants to rollback the tax cuts for the rich and give the middle class a tax cut:
Democratic gubernatorial nominee Tony Evers is proposing a 10 percent tax cut for low- and middle-income taxpayers, saying it’s part of a plan to give them tax breaks instead of corporations and the wealthy.
In a brief overview of his plan provided exclusively to the Wisconsin State Journal, Evers said he would pay for most of the $340 million proposal by scaling back a tax credit for manufacturers and agricultural producers.
Under the plan, Evers’ campaign said 86 percent of Wisconsin’s income tax filers — those below the $100,000 individual or $150,000 family annual income threshold — would see an across-the-board 10 percent cut in the amount of income taxes they pay.
…“For eight years Scott Walker has rewarded the wealthy and the special interests,” Evers said. “That’s not fair. It’s time the middle class gets a break.”
These adjustments to the fairness of state tax structures have already been put into place by Democratic Governors in states like California and Minnesota, and have been shown to be much more successful in growing each state’s economy than have the tax policies of Republican governors who instead favored the rich. Trickle up works better than trickle down.
If more Democratic Governors can be elected this year and in coming years, hopefully the myth of Democrats wanting high taxes can be put to bed. Taxes are a necessity that is required to fund government, and government is necessary to provide for goods that are not effectively provided by private enterprise, such as education, health care, and infrastructure. Democrats don’t want high taxes. They want fair taxes and good government. Republicans want unfair taxes that favor the rich, and dysfunctional government.