I’ve been blissfully off the grid for the past few days, cycling in Western New York.  (Allegany State Park is absolutely gorgeous.  Made me be glad to be paying taxes in New York State.)  I could forget about the debt ceiling fiasco, 9 percent unemployment, the tea party, runaway health spending, global warming, the NBA lockout…

But back in the real world, I learn from newly minted GOP presidential candidate Rick Perry what’s wrong with America–that middle income Americans don’t pay enough taxes.  Really.

We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax. (Quoted in this terrific Ruth Marcus column.)

We’re apparently not dismayed that more than half of all Americans have been in a 30-year recession with little or no income growth.  We’re apparently willing to write off Social Security and Medicare payroll taxes, which are the big federal taxes for low- and middle-income Americans.  A family of four earning $30,000 may pay no federal income tax, but it pays $4,590 in payroll taxes (including the employer’s share, which economists believe is ultimately paid by the employee in the form of lower wages).  Payroll taxes are much bigger than income taxes for most families.

Among working households, 82 percent pay more payroll tax than income tax.  They also pay federal excise taxes on gasoline, beer, wine, liquor, tires, and cigarettes.  And state and local taxes are notoriously regressive.   Feel better, governor?

It’s true that middle income people don’t pay the estate tax.  Nor do most rich people.  Are we dismayed about that?

Here’s another shocker for the governor:  the recession surely caused many households to join the ranks of “lucky duckies.” (This is the Wall Street Journal’s term for people so poor that they don’t owe income taxes.  My reaction is here.)  Are we dismayed that after dad lost his job due to the recession, the family can still claim the child tax credit so long as mom keeps working?

Okay, here are some facts, courtesy of the Tax Policy Center.  They may not allay Mr. Perry’s dismay, but they should assuage the concerns of anyone with a soul.

• Of the 46% of households who don’t pay income tax, nearly 2/3 pay payroll taxes.
• Of the 18% who pay neither income nor payroll taxes, more than half are elderly.
• More than 1/3 have incomes below $20,000.  (Note:  Ronald Reagan made the decision in 1986 to exempt people with incomes below the poverty line from federal income tax.  Twenty-five years later, that still seems like a good call.)
• Only 1% of nontaxpaying households are nonelderly with incomes over $20,000.  I’m dismayed about them too governor. Maybe we should close some of the loopholes that allowed almost 1,500 millionaires to escape income tax in 2009.

Governor Perry’s dismay raises some questions about the potential tax policy implications.  Does he want to raise taxes on lower-income elderly people–by far the largest category of lucky duckies?   Does he want to raise income taxes on the bottom 50% of taxpayers?  If so, wouldn’t that trickle up to raises taxes on most if not all of the middle class?  How does that square with his pledge to never ever raise taxes?  To keep his “tax reform” from being a net tax increase, he’d have to give tax cuts to high income folks.

Oh, right, we have to raise taxes on the working poor and the middle class to finance even more tax breaks for millionaires.

Sigh…

Follow me on twitter.

I had been planning to write a column using that article for my take-off point and stressing the fact that Buffett specifically rejects claims by Republican leaders in the House of Representatives, who are pledged not to raise taxes on the very wealthiest among us by even an itsy-bitsy amount because it would harm our economy by reducing the incentive for the rich to invest in enterprises which would create jobs.

On Wednesday the Herald-Tribune carried an editorial discussing the Buffett article. It was an excellent editorial, and made many of the same points I wanted to make, but it created a problem for me. Should I go ahead and write on the same subject?

I decided yes for two reasons: It is in the national interest for Buffetts article to get as much exposure as possible, and there is a suggestion I want to float that I have not seen anywhere else.

Investors undeterred

First, a brief quote from Buffett: I have worked with investors for 60 years and I have yet to see anyone not even when capital gains rates were 39.9 percent in 1976-77 shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off.

Amen.

And, now the important message: I personally do not know any super-rich people, but I am sure some of my readers do, and I want them to urge the super-rich lets say anybody with an annual income of more than a million dollars to act in accord with their own self-interest and support modest tax increases for themselves and their peers.

More than a few of you may think such a proposition is little short of sacreligious. But, actually it makes very good sense. The United States in the last two decades has evolved into a country with the largest gap in the world between average citizens and the top few percent of the population.

This is not a healthy situation. If we have a long number of years with high unemployment and spreading poverty and many families losing their homes, voters in the low- and middle-income brackets are going to be very anxious for the federal government to do something, and that something will require a lot of money.

We live, thank God, in a democracy. Citizens elect presidents and members of Congress who pass laws and levy taxes and will decide where to find that money. The first place to look will be at a higher and very top-heavy income tax.

We could be in the early years of such a period, if not now, then surely one of these years. And whenever it happens, the wealthy among us will be in a much better position if they can rightly claim they have been doing their fair share all along.

Willing to pay

Indeed, flipping through the Internet responses to Buffetts column, I was pleasantly surprised to find a significant number of comments from people who said they are very rich. To quote from one collection of responses:

Other (hedge fund managers) quickly concede that they should pay additional taxes. Carried interest is a joke, stresses one prominent hedgie, referring to the low rate at which earnings at hedge funds and private equity funds are taxed. Its a loophole. He is all for raising the rate on carried interest and paying more in personal taxes.

… Omega Advisors founder Leon Cooperman has gone on record supporting a 10 percent surtax for three years on individuals earning more than $500,000 per year.

Perhaps investment holdings should be taxed after ten years, regardless of whether theyre sold, says one hedge fund manager.

… A prominent long-short manager says he would welcome paying more in taxes provided it was part of a comprehensive package of changes that included cutting defense spending, raising the retirement age for Social Security and changing immigration policy. He adds, I have no problem paying more if it is not going down a rat hole.

I think there are a lot of very wealthy people who are very smart perhaps enough to elect senators and representatives who would vote to raise their taxes for their own good. Certainly their candidates would have no trouble raising campaign funds.

Waldo Proffitt is the former editor of the Herald-Tribune.

A common complaint among readers of Opinion LA goes something like this: Under President Obama, 50% of the country pays no taxes. Thats flatly false: Everybody pays taxes in some fashion, whether it be sales taxes, excise taxes, property taxes, payroll taxes or income taxes. But it is true that almost half of Americans pay no income taxes — 46%, to be precise, according to a recent report by the nonpartisan Tax Policy Center.

The Wall Street Journals Jonathan Weisman had a piece Friday that used the centers report as a jumping-off point to talk about how the income tax burden is distributed. Its definitely worth reading, as is the centers report, to understand why so many people are exempt from income taxes. For starters, though, its worth remembering that most of the people who dont pay income taxes do pay Social Security and Medicare taxes, which (when you include the employers share) amounts to about 15% of their wages.

According to the report, half the people who pay no income taxes do so because they simply dont make enough money. The tax cuts pushed by President George W. Bush explain part of this phenomenon: They raised the standard deduction for married couples and the tax credit available for each dependent child. The Making Work Pay tax credit included in Obamas stimulus package in 2009 also increased the number of lower-income workers with no income tax liability, but only temporarily; the credit expired at the end of 2010.

For the other half not paying income taxes, the main reason is tax policies specifically designed to help the elderly and low-income workers with children, the report notes. Other, less common reasons that enabled some wealthier taxpayers to escape income taxes include itemized deductions, preferential treatment for capital gains and dividends, education tax credits and other specialized tax breaks.

Im not sure where the outrage lies in all this information, although some GOP presidential candidates are certainly trying to find some. If the working poor are getting too sweet a deal, blame Republicans — President Nixon came up with the idea of the earned income tax credit, President Ford signed it into law and President Reagan championed it as the best anti-poverty, the best pro-family, the best job-creation measure to come out of Congress. And good luck convincing the elderly that they should be paying more of their fixed income to the feds.

Granted, the idea that a little more than half the country is footing the entire federal income tax bill is disturbing. But the tax burden reflects the distribution of wealth in the US Weisman quotes Republican economist Douglas Holtz-Eakin bemoaning the fact that 5% of the households in the US pay 60% of the taxes. He didnt point out that, as of 2009, 5% of the households in the US held 63% of the wealth.

Tax systems inevitably redistribute wealth, and Im not arguing that the US tax code should do so more aggressively. In fact, if you look at income distribution instead of wealth distribution, you could make a case that the tax code is too aggressive already. According to the Tax Policy Center, the 20% of US households that earned 53% of the income in 2009 paid 67% of the taxes.

One other factor worth noting is that, while more Americans are moving into higher income brackets, the share of income accrued by those at the very top has increased dramatically since the early 1970s. In other words, a fraction of the country has been swallowing up an increasing percentage of the gains produced. That trend is whats driving Obama and fellow Democrats to argue for a bigger contribution from the wealthy, even as Republicans complain that the wealthy are bearing too much of the load.

RELATED:

Is it time to reform the tax code?

Deficit: The swirling pressures on the Gang of 12

Deficit: The right way to talk about tax reform

– Jon Healey

The legislatures special legislative session in October is supposed to be limited and quick. The to-do list includes approving a new congressional district map for the state, and not much else.

But with Maryland facing a projected $1 billion shortfall, budget debates in Washington putting future federal contributions in question and Wall Street rating agencies re-evaluating the states creditworthiness, Annapolis leaders could add taxes to the agenda.

CLAUDIA REIS and her husband, Scott Gorman, loved the comforts and convenience of condo living in Springfield, in Union County. But that changed somewhat when the couple, lawyers who commute to Morristown (her) and Hackensack (him), had their first child three years ago. They decided they needed a house — and a town — in which a family could nestle.

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 “It seemed like the homes in Union County were overpriced,” Ms. Reis said. “We hadn’t even considered Essex County, because they say, ‘The taxes are so high, the taxes are so high.’ ”

The couple did not know much more about Roseland, a three-and-a-half-square-mile borough of 5,819 residents in western Essex County, than that it was home to an office complex, which they had seen looming off Interstate 280. But once they wandered in, they found a place that still feels a lot like a farm town, with open space and street signs that offer laid-back advice: “Watch children playing.”

In September they paid $460,000 for a three-bedroom two-bath colonial, built in the 1940s on a quarter acre in the western part of town, a block from one playground and two blocks from another. Ms. Reis is expecting a new baby soon, and they are delighted to be there.

“It’s really serene and nice,” she said. And the serenity and niceness reach even higher levels when they consider the relative affordability of their tax bill, which is $7,000 a year.

The reason for this boon within Essex County is the presence of the office complex, said Richard Leonard, a broker who grew up in Roseland and was mayor for 12 years. Built on part of what until the mid-1960s was known as Becker’s Farm, on the southwestern edge of the borough, it houses the corporate headquarters of Automatic Data Processing, two Prudential offices and several law firms.

Ms. Reis concurred about the taxes, although she added: “I’m not saying they’re cheap. Nothing is, in New Jersey. But they are less than comparable houses in surrounding areas we’ve looked.”

According to Mr. Leonard, many families move to Roseland from elsewhere in North Jersey. Also, with the wide variety of housing stock in town — from condominiums to ranches to million-dollar custom homes — many residents decide to stay when they upgrade.

Celia and Bill Higgins moved from Bloomfield in 1992, paying $180,000 for a three-bedroom two-bath colonial in Roseland. They sold the house eight years later for $225,000 and bought a four-bedroom three-and-a-half-bath colonial for $320,000 to raise their three children, now grown.

“We liked Roseland because it was a safe environment, with a good school district, and the taxes were reasonable,” said Ms. Higgins, who works in the lunchroom at the elementary school in town. “It’s a nice, close-knit community. You know everyone.” Eventually, she said, “I think my children would like to live there also.”

Mr. Leonard, who worked on Becker’s Farm as a youngster, moved back to Roseland. Joanne Magilaro, a Roseland resident who is an agent for Prudential New Jersey Properties, moved back, too, saying the town had retained much of the charm it had in the days before Route 280 was built.

“People who live in Roseland want to stay in Roseland,” Ms. Magilaro said. “Probably half the people I grew up with came back to live in town.”

The part-time mayor, John Duthie, who owns an insurance agency, grew up there, too. The corporate tax base, he said, has helped Roseland keep all its services intact, including twice-weekly garbage pickup and monthly pickup of bulk items.

The town renegotiated its contract with the police force; it is renting out previously unused space in borough hall and is sharing some costs with other towns, Mr. Duthie said, but daily life has not changed much. Residents take their sidewalks in at night, he joked.

“My son is 10,” Mr. Duthie said, “and I know that if he’d go down to the town pool and stub his toe, I’d hear from a Roseland dad or a Roseland mom.”

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In November when Justin Smith was voted in as Larimer County sheriff, he knew the 900-pound gorilla in the room was finding a way to fund the jail with two jail sales taxes scheduled to sunset by 2014.

I knew this was coming, he said. But Smith and others in the county got to work developing a plan to generate dollars, despite a struggling economy.

Today, county attorneys are hard at work drafting language to extend those two sales taxes through 2029.

With about three weeks of writing under their belts, attorneys will have a final draft of the ballot question for members of the Larimer County Board of County Commissioners to review in an open meeting from 9:30 to 10:30 am Aug. 23 at the Larimer County Courthouse offices, 200 W. Oak St.

In May, results of a poll of 500 registered voters showed that 67 percent, or 335 people, would support extending the two taxes, with $11 million per year going to jail operations and alternative programming and $4 million set aside for future jail expansion.

Conducted by county-contracted Ciruli Associates April 28-May 2, the poll also revealed that 200 people, or 40 percent, were strongly in favor of extending the two taxes.

The taxes, which Criminal Justice Services director Gary Darling said are necessary to preserve public safety, have a long history in Larimer County.

In 1999, voters approved a 0.2 percent sales tax to pay for a jail expansion and operations. When the expansion debt is paid off in 2013, the tax will drop to 0.15 percent and end in 2014.

The second is a 0.2 percent sales tax that will expire in 2012 and passed to fund construction of the new courthouse.

Smith was part of the group that worked to gain voters` approval for the original taxes, and now he`s back to lobby for extension.

We`re at that point where we have to rejustify the taxes, said Smith, who has 20 years with the Larimer County Sheriff`s Office.

The cost to keep an inmate at the Larimer County Detention Center is about $80 to $90 a day, Smith said, but he and others have worked to cut costs through alternative programming.

It`s not a silver bullet we came up with, Smith said, It`s a lot of smaller steps.

Over the past few weeks, county commissioners and employees have received input from citizens regarding the extensions` merits and shortcomings. Unaware of why a properly functioning jail system is important, Smith said, some questioned why money should go to it, rather than to other areas in the county budget. Overall, though, response has been positive, Smith said. But there are those who worry about spending more in an economic downturn.

This is a tax, and people are just wanting to be sure that it`s needed and that it`s going to be used appropriately, Smith said. Commissioners will have until Aug. 30 to make changes to the ballot question`s language, Darling said, after which time a final version of it is due to the county.

In the meantime, Darling said commissioners and other county employees, including Smith, would discuss the need for the tax extensions in up to 20 meetings with any group that will allow us to come, essentially.

Madeline Novey can be reached at 669-5050, ext. 516, or mnovey@

reporter-herald.com.

Property tax rates are staying flat in the two west Chatham cities where they’re charged.

The City Council voted Monday night to keep Pooler’s tax rate flat this year, at 4.635 mils. Port Wentworth’s taxes also are staying flat. Last month, the City Council set that town’s 2011 tax rate at 4.397 mils.

Pooler city officials say growth allowed them to maintain the same tax rate, and that growth continued Monday night, with the City Council approving a new townhome development.

Visit savannahnow.com/westchatham for more news in this area.

Pooler

The total taxable value of all the property in Pooler’s city limits — including land, homes, businesses and other buildings; personal property; motor vehicles; mobile homes; and timber — grew slightly over the past year, from
$2.28 billion to $2.32 billion.

But residents aren’t feeling any richer. The taxable value of land, homes, businesses and other buildings in the municipality shrank by a total of
$148.6 million. It’s just that enough new homes and businesses came into the city to offset that drop.

Finance Officer Michelle McNeely said although growth in Pooler has slowed during the economic downturn, city officials have been fortunate compared to those in other Georgia towns.

“A lot of other cities in this state aren’t seeing any growth,” McNeely said. “… We’re maintaining, but that’s good these days.”

Continued growth

And growth keeps looking up in Pooler.

On Monday night, the City Council approved the site plan to develop 50 environmentally friendly townhomes in the Harmony subdivision.

The development initially grew criticism from neighbors who didn’t know the parcel was zoned for townhomes. But officials with the company developing the property — Parallel Housing, Inc. — held a meeting with neighborhood residents to assure them they would be using quality materials and planned to stick with the townhome development for the long haul.

“We’re going to build them. We’re going to own them. We’re going to manage them,” Gregg Bayard, a developer with the company, said in an interview.

Port Wentworth

Port Wentworth officials weren’t as lucky. The total taxable value of all property in Port Wentworth shrank from $830 million to $828 million. And the total value of land, homes, businesses and other buildings in the municipality shrank by a total of $59 million.

The Port Wentworth City Council approved the city’s 2011 millage rate June 23.

Property taxes are not collected in Garden City and Bloomingdale.

For Amazon, stakes are high in sales tax fight

Amazon is battling the online tax in several states, arguing that if even one state is successful in forcing it to collect sales taxes, it could result in substantial tax liabilities for past sales. In New York, the retailer has been paying the levy so the law can be challenged in court.

HARRISBURG, Pa. (WHTM) -

Mayor Linda Thompsons fix for Harrisburg includes new taxes if all else fails.

For now, Thompson is urging City Council to approve the Act 47 plan, the states recipe for financial recovery, which is up for a vote Tuesday night.

Thompson said as a last resort, she supports a commuter tax on people who work in the city but live elsewhere. It could be part of her plan if Council rejects the Act 47 plan.

I will petition the court and ask for the opportunity to raise taxes and commuter taxes above the limit. We could do that now, Thompson said.

The Act 47 plan already calls for about a $50 a year property tax increase on the average value home in the city.

At a news conference Monday, Thompson talked about getting special permission to introduce a commuter tax, and to raise property taxes and earned income taxes above the highest rate allowed by law, but thats only if the Act 47 plan isnt working and fails to get Harrisburg out of debt. Its a plan Thompson wants Council to approve.

A rejection of the plan further complicates the future of our city and places additional and needless stress on public officials, dedicated city employees, as well as our working visitors that come to our city, Thompson said.

If Council rejects the Act 47 plan, the state is threatening to withhold funding, including hundreds of thousands of dollars that could help close the $5 million funding gap the city is facing this year.

Also of concern to Thompson is that there would be no independent, objective state coordinator to put the plan into motion and settle differences among city leaders along the way.

Politics as usual is destroying all of us, she said. It is destroying our credibility nationally, our viability, and our ability to alter our own history.

Without state support, Thompson said the city may not get top dollar when selling or leasing assets like the trash incinerator and parking garages.

Bottom line: if Council turns down the Act 47 plan, Thompson said shes moving forward with most of the recommendations anyway.

Thompson called Councils vote on the Act 47 plan Tuesday night historic and said an approval of the plan would put Harrisburg will be back on track financially in about two years.

According to the Tax Policy Center, federal taxes are lower than at any time since 1955. President Obama has reduced taxes more than any president since Dwight D. Eisenhower.

The problem is that the tax cuts have not promoted economic growth and have caused the federal deficit to explode. Those lower taxes have helped give the US government the lowest revenues, as a percentage of gross domestic product, of seven industrialized countries surveyed by the Congressional Research Services.

The highest-paid Americans had an average income of $345 million, but as a result of Bush tax policy they now pay an effective tax rate of 16.6 percent, the lowest on record.