Walter E. Williams

 Last month, the U.S. Bureau of the Census reported its findings on income and poverty. Median real income remained constant between 2002 and 2003 at $43,000; the official poverty rate rose slightly from 12.1 percent to 12.5 percent for a total of 36 million Americans; poverty rates by race remained unchanged at 8 percent among whites, blacks 24 percent and Hispanics 22 percent. Dr. Daniel H. Weinberg, Bureau of Census division chief, added that income inequality remained unchanged with the lowest 20 percent of households ($18,000 and below) earning 3.5 percent of national income and the highest 20 percent ($86,900) about 50 percent.

 The poverty report gives vice-presidential hopeful Sen. John Edwards a little fodder for his "Two Americas" stump speech. That's the one where he says, "(There's) one America that does the work, another America that reaps the reward. One America that pays the taxes, another America that gets the tax breaks." This is demagoguery and unadulterated dishonesty that can only appeal to the misinformed and ignorant.

 Let's look at who doesn't pay taxes. According to a study done by Scott Hodge, president of the Washington, D.C.-based Tax Foundation, and his colleagues, 41 percent of whites, 56 percent of blacks, 59 percent of American Indians and Aleut Eskimos, and 40 percent of Asians and Pacific Islanders will have no 2004 federal income tax liability. The Tax Foundation study concludes, "When all of the dependents of these income-producing households are counted, there are roughly 122 million Americans -- 44 percent of the U.S. population -- outside of the federal income tax system."

 Who does pay federal income taxes? The top 20 percent of income earners pay 80 percent, and the top 50 percent pay 96.5 percent of total federal income taxes. Given these figures about who does and does not pay federal income taxes, what are we to make of John Edwards' stump speech? He's right in one sense. One group of Americans -- those at the top -- work and pay virtually all federal income taxes, and another group -- those at the bottom -- work and pay little or no federal income taxes.

Walter E. Williams

Dr. Williams serves on the faculty of George Mason University as John M. Olin Distinguished Professor of Economics and is the author of 'Race and Economics: How Much Can Be Blamed on Discrimination?' and 'Up from the Projects: An Autobiography.'
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