Fuzzy math

Ari Fleischer returns with an op-ed in the Wall Street Journal. As Jonathan Chait puts it, "the most dishonest flack meets the most dishonest Forum."

Of course, the central conceit of Fleischer's op-ed--that 40 percent of Americans pay no taxes--isn't true, either. Fleischer very carefully uses the phrase "income taxes," in order to mislead the reader into thinking that there are no other taxes. But he also proceeds from his discussion of "income taxes" into generalized observations about the tax code (i.e., "Our tax system comes up short in a lot of areas.").

But income taxes are just one part of the tax system. For most Americans, the biggest tax is the payroll tax, which is regressive. State taxes in most states are even more regressive. Any computation will show that the bottom 40 percent of taxpayers do pay federal taxes. Here's a link from the Congressional Budget Office (CBO) showing that the lowest-earning fifth pays 4.6 percent of its income in federal taxes, and the next-lowest quintile pays 9.8 percent.

If you add in state and local taxes, you get a more complete picture of the tax burden. As it happens, conservative economist Kevin Hassett of the American Enterprise Institute addressed this topic in yesterday's Washington Post. Hassett found that, in 2003, the average family of four earning $50,000 a year paid 31 percent of its income in taxes. The average family of four earning $150,000 paid 30 percent. (Note to Fleischer: 31 is greater than 30. I can explain this to you in more detail if you'd like.) These figures came from 2003, the last year for which data was available. They don't take into account the 2003 Bush tax cuts, which made the tax code even more regressive.

The rest of Fleischer's op-ed is filled with complaints about the freeloading poor and the overburdened rich, primarily assertions ("the tax code is highly progressive") that, as Hassett (or anybody who has seen the data) can show you, simply aren't true.

Fleischer waxes indignant about how the top 1 percent is paying a higher share of the tax burden than it was 25 years ago. The reason this is true, of course, is that the top 1 percent is earning a far higher share of the national income. Fleischer insists it's because they're paying higher tax rates. He cites a study last year by CBO which, he says, shows that since 1979, the "[The top 1 percent] share of the nation's income has risen, but their tax burden has risen even faster."

I found that study, and it shows just the opposite of what Fleischer says. In 1979, the highest-earning 1 percent of taxpayers paid an effective federal tax rate of 37 percent. In 2004, they paid an effective federal tax rate of 31.1 percent.

Ari Fleischer, still talkin' like it's 1999.