ONE argument often deployed against tax hikes for the rich is that the burden of taxation is already unfairly skewed, since roughly half of Americans pay no federal income tax at all. Sometimes, the line is incorrectly adumbrated to a claim that half of Americans pay no taxes, which isn't true; all Americans pay some mix of payroll taxes, state taxes, capital-gains taxes, sales taxes and so forth. The overall burden of taxation is pretty even across income groups: the total effective tax rate ranges from 16% for the bottom quintile to 31% for the top quintile, and in fact it stays at 31% right up through the top 1% of earners. But the point that about half of American tax units pay no federal income tax is correct. Why not? Aaron Carroll and Donald Marron point us to a new report by the Tax Policy Center (a joint project of the Urban Institute and the Brookings Institution), which explains that there are two basic reasons why people don't pay federal income tax: either they're very poor, or they're covered by tax expenditures, mainly the ones that benefit the elderly and children. Mr Marron:

Low incomes (or, if you prefer, the standard deduction and personal exemptions) account for fully half of the people who pay no federal income tax. The second reason is that for many senior citizens, Social Security benefits are exempt from federal income taxes. That accounts for about 22% of the people who pay no federal income tax. The third reason is that America uses the tax code to provide benefits to low-income families, particularly those with children. Taken together, the earned income tax credit, the child credit, and the childcare credit account for about 15% of the people who pay no federal income tax.

Okay, "low incomes". But how low exactly? How poor would you be if you were too poor to pay federal income tax, strictly on the basis of your income and the standard deductions? Basically, you'd be making less than $20,000 a year, though you've still got a small chance of qualifying if you make under $40,000 and have some kids.

The brown bars are the "tax units" who are nontaxable because they're straight-up too poor, even using the standard deduction alone. And too poor means pretty darn poor. $20,000 a year is not a lot of money to support a hungry tax unit, especially if it includes some little tax units running around in their pajamas with the floppy feet. Of course, up to $75,000 a year, you've still got a substantial number of people in the green bars: those who owe no federal income tax because they're benefiting from tax expenditures. But which tax expenditures? Mostly, it's the tax expenditures you get because you're over 65, or because you've got the pajamas with the floppy feet: the child tax credit, the child and dependent care tax credit, and the earned-income tax credit. Less frequently, people qualify on the basis of "costs of earning income", meaning they may be freelancers or small business owners. And so forth.

American society is becoming more unequal. Incomes at the bottom level are stagnant or declining, while incomes at the top are rising. This is why a large number of people at the bottom levels of the income tier don't make enough money to pay any federal income tax. At the same time, we're not collecting enough overall revenue to pay for our government spending. We could try to raise the money we need by repealing tax breaks for poor children and the elderly, if we were sort of mean and determined to hurt people who don't have the political strength to resist, but I think it makes more sense to raise the taxes we need by increasing rates on relatively well-off people whose incomes have risen dramatically over the past couple of decades and can thus afford to pay them.