For me, the difference between a myth and a lie is that the folks believing in the former don’t know any better and those spreading the latter surely do. In between is the twisting, which can reflect ignorance but also can be the consequence of deliberate word choice that suggests one thing even though it literally means something else. Recently, a distant cousin sent me a link to The Top 5 Tax Myths To Watch Out For This Election Season. All five so-called myths are ones that I had already seen and heard, many times.

The first myth, that “47% of Americans do not pay taxes” is a fairly new one, advanced to support the proposition that the poor should fork over more of their income and assets because the wealthy are over-taxed. The flaw in the statement is that it would be accurate if the adjectival phrase “federal income” were inserted before the word “taxes.” By leaving out those important words, the authors of the statement convey a meaning that is not supported by the facts.

The second myth, that “The American people and corporations pay high taxes” is a bit more difficult to parse. What is meant by “high”? Compared to a one-percent tax rate, there is a plausible argument that most American people and corporations pay high taxes, because even 15 percent is “high” compared to one percent. On the other hand, if the statement is intended to make people think that Americans are taxed at a higher rate than are people and corporations in other countries, the statement is misleading. In 2009, every developed nation except two imposed taxes as a percentage of gross domestic product at rates higher than those applicable in the United States.

The third myth, that “cutting taxes creates jobs and raises revenue” has been around for several decades. It makes for a great sound bite, but it’s factually erroneous. The lowest average annual growth in gross domestic product during the past 60 years has occurred when the top marginal rate is where it is today. The highest rate of growth occurred during years when the top income tax rate was in the high 70-percent range. The second highest rate of growth was when the top income tax rate was in the, indeed, 90-percent range, but that surely was attributable to the global war then being waged. The third highest rate of growth, within a whisker of second place, was when the top income tax rate was 39.6 percent, which is where it was before the Bush tax cuts went into effect. Those cuts drove the growth rate down to its lowest point. Surely the third myth is a pre-emptive strike against those who want to return to the rates as in effect before the Bush tax cuts, although opponents act as though people were advocating a return to the days of top rates in the 70-percent and 90-percent ranges.

The fourth myth, that “The US tax system is very progressive because wealthy individuals already pay a disproportionate amount of taxes” is another statement that loses its factual truth because the phrase “income tax” has been removed as a modifier of the word “system” and as a modifier of the word “taxes.” The progressive federal income tax has the effect of ameliorating what would otherwise be a very regressive overall tax system. As a practical matter, the progressive federal income tax causes the “US tax system” to be a flat system.

The fifth myth, that “The ‘Fair Tax’ or a flat tax would be more fair” simply opens up the debate about the meaning of “fair.” For many people, the rule requiring drivers in the left turn lane to turn left is “unfair” because it doesn’t acknowledge how special they are by letting them go straight out of the left turn lane, cutting ahead of the people in the go straight lane. For many people, any sort of tax system, and any sort of government reining in their impulses, is “unfair.” Certainly the flat tax is not progressive, and its adoption would remove the only thing keeping the entire tax system from being regressive.

Each of these so-called myths can be dissected by sitting down, looking at the facts, thinking carefully, and making computations (such as those that would demonstrate that most Americans would pay more federal income taxes under a flat tax that raised the same amount of revenue, because the lower income taxpayers would need to pay more to offset the revenue losses from the additional tax reductions afforded to the wealthy by the flat tax). These myths are not, of course, myths. They may become myths if they are permitted to circulate without objection. They are lies and twistings of the facts, nothing more. And as such, they need to be debunked. Progress is being made in that respect. I gladly play my part in defusing these provocative lies, as someone who laments tax ignorance. I add this post to the long list of those in which I have criticized the lack of tax education in this nation, and the opportunity for mischief it presents to those who benefit from, and seek to maintain, continued tax ignorance. Everything I’ve shared in Tax Ignorance, Is Tax Ignorance Contagious?, Fighting Tax Ignorance, Why the Nation Needs Tax Education, Tax Ignorance: Legislators and Lobbyists, Tax Education is Not Just For Tax Professionals, The Consequences of Tax Education Deficiency, The Value of Tax Education, Tax Ignorance of the Historical Kind, and Is It Any (Tax) Wonder? reinforces this point.