Brian Riedl (Manhattan Institute), Correcting the Top 10 Tax Myths: 

As Washington prepares for a 2025 dominated by tax policy—led by the issue of whether to extend the expiring 2017 tax cuts—the debate is likely to bring a fresh recirculation of the most common myths about the federal tax system from both the left and the right.

On the one hand, the false conservative narrative suggests that the middle class is buried in taxes and that tax cuts pay for themselves, or even reduce deficits by “starving the beast” of the ability to expand federal spending. The false liberal narrative, on the other hand, suggests that “tax cuts for the rich” drive the deficit upward and lead to a regressive tax code, in contrast to the strongly progressive tax systems of 1950s America and contemporary Europe.

In reality, the federal tax system is quite progressive—more so than those of Europe and pre-Reagan America. Middle- and low-earners pay very low tax rates. And the vast majority of tax cuts truly reduce federal revenues and increase deficits (albeit less so than rising spending levels). The following report corrects the most common and pernicious federal tax myths.

Top 10 Tax Myths: 

• Myth 1: “Tax Cuts Pay for Themselves”
• Myth 2: “Tax Cuts Will Starve the Beast”
• Myth 3: “The Middle Class Pays Higher Tax Rates than the Rich”
• Myth 4: “Those Old 91% Tax Rates Raised Large Tax Revenues”
• Myth 5: “Europe’s Higher Tax Revenues Derive from Aggressively Taxing the Rich”
• Myth 6: “ ‘Tax Cuts for the Rich’ Drive Soaring Budget Deficits”
• Myth 7: “Taxing Millionaires and Corporations Can Eliminate the Deficit”
• Myth 8: “Most of the 2017 Tax Cuts Went to Corporations and the Wealthy”
• Myth 9: “Repealing All Post-1980 Tax Cuts Provides Painless Deficit Reduction”
• Myth 10: “America’s Corporate Taxes Are Far Below International Standards”

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