Rep. Alan Grayson introduced the “War Is Making You Poor Act” on Friday:
The upshot is that he claims the extra $159 billion (on top of the already committed $549 billion) to be spent on the wars in Iraq and Afghanistan isn’t necessary, and should instead be used to pay the income tax on the first $35,000 of income for every taxpayer in the country. As a supporting argument, he shows how current U.S. military spending is about the same as the rest of the world’s military spending combined.
Something’s wrong with his math, though. $159 billion is on the order of $1,000 for each taxpayer in the United States. How does that pay for the taxes on $35,000 of income? Most of that money falls into the 10% and 15% federal tax brackets, so even with a pretty hefty deduction, I’m guessing most people pay at least two or three times that $1,000 on their first $35,000 of income. The deduction wouldn’t even apply for people whose adjusted gross income is over $35,000.
Although those making less than $35,000 pay less in taxes, obviously, is it really enough to make up the difference? Rep. Grayson claims about one third of Americans earn less than $35,000, which overlaps significantly with the 38% with no income tax liability. So that leaves us with about $1,500 per taxpayer — still off by at least a factor of two.
Something just doesn’t add up here, and while I agree with both the sentiment (why do we need to spend as much on military as the rest of the planet combined?) and the general idea of a small tax break for middle-income workers, I’m left with a sour taste in my mouth because politicians invariably twist the numbers to suit their purposes. “We pay your taxes on $35,000″ certainly sounds a lot more impressive than “about $1,500 per taxpayer”, even if it does somehow add up. Not to mention Grayson’s emotional appeal to the third of taxpayers making less than $35,000, who wouldn’t even benefit from it, since they have little or no tax liability.No comments