Following up on last week’s post regarding the liberal Budget & Tax Center’s poorly-conceived article criticizing our tax modernization study, Civitas has posted a closer examination of the specific data BTC uses to support their claim about the proposed tax plan’s impact on various income groups. In short, they’ve got some explaining to do. Here’s a key passage from the Civitas article:
Adding in the $544 in “average tax change” BTC presents in their most recent study for that income group brings the total tax burden they estimate under the proposed tax plan would be roughly $1,275. Recall, the new tax plan would only impact households via the sales tax.
In order to pay $1,275 in sales tax, one must make $15,839 in purchases, under the 8.05 percent sales tax rate proposed in the income tax elimination plan. But according to the BTC chart, average income of these households in the lowest 20 percent of income is only $11,000.
So how does BTC explain households with an average $11,000 of income making nearly $16,000 worth of purchases?
Unfortunately, the media has frequently cited the BTC article without looking at the actual numbers. At minimum, interested reporters, legislators and concerned citizens should demand an answer from BTC before giving their paper any credibility.