In February 2022, U.S. Sen. Rick Scott (R-FL), the chairman of the National Republican Senatorial Committee, released “An 11 Point Plan to Rescue America.” In the section on economic growth, Sen. Scott demanded that low-income Americans begin paying federal income taxes. “All Americans should pay some income tax to have skin in the game, even if a small amount,” he wrote. “Currently over half of Americans pay no income tax.”
Sen. Scott’s new proposal diverges strongly from his populist rhetoric. As recently as October 2021, he accused Democrats of “hurting poor families,” claiming that “they want to just spend your money and tax you to death—tax, tax, tax, spend your money!”
Sen. Scott’s plan would require households with children making less than $50,000 to shell out more than $4,500 in additional taxes.
With his new plan, Sen. Scott has turned these accusations into aspirations. According to estimates from the Tax Policy Center (TPC), the proposal would hike taxes on 99.9 percent of Americans making less than $10,000 per year. Such individuals would see their after-tax incomes fall by 6.5 percent. The plan would inflict especially large pain on the “poor families” Sen. Scott is ostensibly most worried about: If implemented, Sen. Scott’s plan would require households with children making less than $50,000 to shell out more than $4,500 in additional taxes.
Sen. Scott’s rationale for this regressive, anti-populist policy—that “[c]urrently over half of Americans pay no income tax”—is the type of rhetoric that only a politician could love. Although technically true, the claim is highly misleading. If this seems odd, consider the three ways Sen. Scott has distorted the truth: His analysis focuses exclusively on the years of the coronavirus pandemic; he ignores all taxes other than the federal income tax; and he narrowly defines who counts as a taxpayer. It is crucial for those evaluating Sen. Scott’s claim to understand the false logic behind these cherry-picked methodologies.
Focusing on years of extreme economic hardship
Sen. Scott’s claim that “over half of Americans pay no income tax” is specific to the pandemic years. According to the TPC, just 44 percent of Americans paid no federal income taxes in 2019. That figure rose above 50 percent in 2020 and 2021. Yet the TPC projects that it will fall back to 42 percent in 2022. More than half of Americans paid or will pay income taxes in all but two of the 21 years studied by the TPC—2020 and 2021, the period cited by Sen. Scott. Those, of course, were the years when millions of Americans lost their jobs or livelihoods because of the COVID-19 pandemic—a time when many Americans faced dire, extraordinary circumstances.
Looking only at federal income taxes
In his 11-point plan, Sen. Scott focuses exclusively on federal income taxes; he ignores payroll taxes, excise taxes, and all taxes levied at the state and local levels. But a mere one-third of all tax revenue—and only about half of federal tax revenue—comes from the federal income tax, so Sen. Scott highlights a relatively narrow slice of the broader tax code.
Sen. Scott disregards all of the main taxes paid by ordinary people, including federal payroll taxes, state sales taxes, and local property taxes, as well as other taxes that are borne by consumers.
If Sen. Scott were to look beyond the federal income tax, he would see that all Americans bear some of the overall tax burden. For most people—including virtually all working-class people—federal payroll taxes are a greater burden than federal income taxes. Unsurprisingly, just 17 percent of Americans—most of whom are retirees—pay neither federal income taxes nor federal payroll taxes. This is far lower than the figure cited by Sen. Scott.
Sen. Scott disregards all of the main taxes paid by ordinary people, including federal payroll taxes, state sales taxes, and local property taxes, as well as other taxes that are borne by consumers. Only by excluding the taxes paid by most Americans can one conclude that most Americans don’t pay taxes.
Portraying temporary nonpayers as permanent nonpayers
This portrayal of roughly half the population, while inaccurate, is hardly new. During the 2012 presidential campaign, then-candidate Mitt Romney famously claimed:
There are 47% of the people who will vote for [President Obama] no matter what … These are people who pay no income tax … and so my job is not to worry about those people. I’ll never convince them that they should take personal responsibility and care for their lives.
But neither candidate Romney’s 47 percent statistic nor Sen. Scott’s “over half” figure reflect people’s lifetime tax payments. Rather, they reflect people’s payments at a particular point in time. For example, if someone works for 50 years and then retires and stops paying taxes, Sen. Scott’s figure counts them as a nontaxpayer.
That distinction is important. Most members of the 47 percent only fall into that group temporarily. They are retirees who paid income taxes throughout their working lives; young people who have yet to pay income taxes but will when their wages rise; and people temporarily out of the workforce who paid income taxes in recent years and will pay them again in the near future.
While Sen. Scott has tried to deflect this particular criticism, his plan explicitly decries the fact that “[c]urrently,” more than half of Americans don’t pay income tax. Therefore, the plan seems to tax people who do not currently pay federal income taxes, such as retirees. Indeed, according to the TPC, more than half of elderly households would experience a tax hike under his proposal. This would have an especially damaging effect on the senator’s home state of Florida, where more than 2 in 5 residents would end up paying higher taxes.
Similarly, most nonelderly members of the 47 percent are only there briefly. Six out of 10 working-age people who don’t pay income taxes in a given year will pay within three years. These people are momentarily out of the labor force due to layoffs, medical problems, the birth of a new child, or other circumstances. They are not, as Sen. Scott has repeatedly put it, “those who are able-bodied but won’t work.”
Sen. Scott’s plan would destroy that system of mutual generosity, instead taxing people deeper into poverty when they are most vulnerable.
Throughout their lives, most Americans have many years when they pay income taxes and many years when they do not. This is by design: Americans pay income taxes when they are well off, and they receive benefits when they are in need. Sen. Scott’s plan would destroy that system of mutual generosity, instead taxing people deeper into poverty when they are most vulnerable.
If refundable tax credits count as offsetting tax liabilities, it is true that more than half of Americans did not pay income taxes in 2021. Yet Sen. Scott has distorted this factually true statement to make it seem as though half of Americans regularly pay no taxes, which is false.
While promoting his 11-point plan, Sen. Scott has continued to mislead the public. When the senator appeared on Fox News in February, interviewer Sean Hannity asked him:
Did you see Chuckie Schumer saying that you, your plan is to raise taxes on more than half of Americans? I didn’t see that in your plan. Did you have that in your plan? Was it in invisible ink in the copy that I got? ’Cause I didn’t see that.
Scott replied, “Of course not, oh no.” This is technically true—he didn’t use invisible ink. In fact, the tax hike is perfectly visible on page 35 of his plan.
The American tax code is far broader than just the federal income tax. Virtually all families pay into the system, and when they are hurting, they receive benefits instead. The bottom line is that all Americans have “skin in the game” and contribute to society whether or not they pay federal income taxes in any given year. Unfortunately, Sen. Scott’s plan would dramatically raise taxes on the least fortunate Americans.