Most conservatives are convinced that it’s a major problem that 47 percent of Americans pay no income taxes. I’m not.
The argument — which has been steadily picking up adherents on the Right for ten years — is that people who pay no income taxes are likely to perceive big government as a free good and therefore become more supportive of it than they would be if they paid income taxes. A secondary argument is that it is important, as a matter of both morals and civics, for everyone to pay taxes.
These claims, I think, overstate the importance of the distinction between income taxes and payroll taxes. I’ve never seen evidence that people who pay payroll taxes but have no income-tax liability regard themselves as not paying taxes or favor big government.
Another difficulty for the thesis: Attitudes toward government do not appear to have become more liberal as the number of people paying no income tax has increased. In August 1992, Gallup found that 50 percent of Americans thought that “government should do more to solve our country’s problems.” Gallup asked the same question in June 2008, and got the same results. No clear pro-government trend can be found in other polling results.
Keith Hennessey reports that “most of the increase since the mid-1990s in the number of people who owe no income taxes is the result of the child tax credit” that Republicans first introduced into the law and then expanded. It strikes me as at least plausible that parents are a relatively future-oriented segment of the electorate and that most of them are able to see that they will not be receiving child credits forever. It would be interesting to see whether parents as a group have become steadily more eager to see activism from the federal government over the last two decades. My guess is that the answer is no.
If the prevailing conservative theory is correct, then conservatives are in a very bad spot. It suggests that conservatives, who have built electoral majorities in the past by cutting middle-class taxes, now need to reverse course and start raising them. Before embracing a theory that would have such perverse consequences, we ought to see if the theory has any evidence to back it up.