Freshman lawmaker: All workers should pay income taxes, not just the rich

Freshman Republican Rep. Mick Mulvaney (S.C.) said Wednesday that the U.S. tax code needs to be re-written so it relies less on income-tax revenue from the wealthy, and ensures that all workers contribute something to federal receipts.

Mulvaney indicated that making everyone pay something into the system is the best way to reduce the budget deficit, as the wealthy are already paying the vast majority of income taxes. As reported by The Herald of Rock Hill, S.C., Mulvaney pointed out that the top 1 percent are contributing more to federal revenues than the bottom 95 percent.

When one audience member said his proposal would be like trying to get “blood out of turnips,” Mulvaney responded: “If you want to solve this problem, you have to tax the middle class, because that’s where the people are.”

Mulvaney acknowledged that his proposal would likely be seen as unpopular — especially as the election season approaches — because it would impose some level of tax on millions of workers.

Still, some Republicans have made similar calls to ensure that all employed people pay some income tax. They have argued that the current system only encourages people who don’t pay income taxes to vote for federal policies that encourage more federal spending, even in the face of a $1 trillion budget deficit.

The Heritage Foundation this week announced the results of a study that shows nearly half of all working Americans, 49.5 percent, pay no income taxes.

“This trend should concern everyone who supports America’s republican form of government,” said Bill Beach and Patrick Tyrrell, the authors of the Heritage study. “If the citizens’ representatives are elected by an increasing percentage of voters who pay no income tax, how long will it be before these representatives respond more to demands for yet more entitlements and subsidies from non-payers than to the pleas of taxpayers to exercise greater spending prudence?”

Mulvaney’s proposal stands in direct contrast to that of Democrats, who have argued for the last year that Republicans can get closer to a balanced budget if they work with Democrats to both cut spending and increase taxes on higher-income earners.

Senate Democrats have tried several times this year to raise taxes on annual income higher than $1 million, which some have cast as a “surcharge” on the wealthy to pay for various government priorities. But House Republicans have so far beaten back those proposals.

In the most recent tax battle, Republicans opted to extend the payroll tax holiday without paying for it at all rather than paying for it with a tax increase on the wealthy. Other aspects of that bill, which also extended unemployment insurance and avoided cuts to Medicare physicians’ payments, were paid for in part by requiring new federal workers to contribute more to their retirement plans.

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