As with every national election, the Democrats insist upon waging class warfare to win votes. Their claim is that "The Rich" aren't paying their fair share of taxes. The tables above demonstrate the lack of foundation for that claim. The top table demonstrates that more than 60% of the federal taxes are paid by the top 20% by income. The middle table demonstrates the effective tax rate by income group. Note that the highest taxed group by effective rate includes those earning between $1 million and $100 million a year. The effective tax rate declines for those earning more than $100 million a year. People with that much money often own lots of tax-exempt bonds issued by the government. That allows our government to borrow, which it's pretty good at doing. The bottom table demonstrates the effective tax rate paid by broader income groups. Under this measure, the top 20% of income earners pay at the highest effective rate, which is just over 25%. As you can see, the statistics really bring home Sen. John McCain's point that it is irrelevant to define "The Rich" for purposes of discussing income tax rates. I've always believed that the rates should be flat across the board with very few exemptions, credits and deductions except for those at the very bottom of the income ladder. This provides a much fairer income tax. If you earn more, you pay more even if the rate doesn't escalate. Believe it or not, I'm old enough to remember the top tax rate reaching 90%! Reagan did away with that extreme progressive aspect to our federal income tax. If the Democrats and Obama have their way, we will return to that system. And guess what? People will find all sorts of creative ways to hide their income just like they did under that old system.A big hat tip to Zach Wendling at In The Agora blog for bringing these statistics to our attention. The statistics are based on data compiled by the CBO.
It is customary to provide citation information when one provides "statistics." If you want your readers to TRUST those statistics, it's even customary to describe the methodology used to arrive at said "statistics."
ReplyDeleteThese "statistics" don't prove anything -- other than that you can cut-and-paste from someone else's blog/source.
Sorry if the Congressional Budget Office doesn't cut it for you, tanah. You can crawl back under your rock now.
ReplyDeleteGary, mind if I copy these over at HFFT?
ReplyDeleteYou think Obama has seen this yet?
Melyssa, Credit is due to Zach Wendling at In The Agora. As I note, he posted the tables.
ReplyDeleteOne other important fact that the poor, downtrodden, hand-wringing, bleeding-heart liberals don't remember to tell you is that only about 50% of the citizens pay any taxes at all.
ReplyDeleteMany of them are below the poverty level for paying taxes. And even some of them receive TAX REFUNDS on taxes they DIDN'T pay. And of course, there are the hundreds of thousands of illegal aliens who pay no taxes.
I love how rather than click twice, people would rather flame somebody...and then look like an idiot. Ah well, maybe it makes them think twice next time.
ReplyDeleteTaxfederation.org did something along these lines last year with 2005 data. Showed exactly the same thing, just not in as accesible of a format. It's exactly like that "barstool economics" email that makes the rounds periodically. Everybody hates the rich (well, knee-jerk acolytes do anyways) but if they weren't giving 35% every year, the country would grind to a halt.
I was galled to discover recently that my wife & I are "rich". Certainly, I don't feel rich. My wife is a nurse, and I am a contractor for the telephone company- not CEOs, not jet-setters. Yet, our incomes put us in the category of being "wealthy" such that our "fair share" of taxes are higher than others, in a case where we use fewer services than others.
ReplyDeleteI've been struggling to find out what we did to deserve a greater confiscation of our income- who we harmed, who we upset, and why we aren't afforded the opportunity to keep some reward for having played it straight. We went to school, got our degrees, carry no debt, and yet, we don't feel rich by any stretch of the imagination. We live an feel very middle class.
Under an Obama Administration, our tax burden stands to increase by up to 10 percentage points. I really don't want to hear from him that he is booster of the middle class, unless he revises what he means by that term.
Obama defined rich as those making over $250,000 a year.
ReplyDeleteMcCain defined rich as those making over $5 million a year. (Saddleback Church Forum).
Two hundred fifty thousand? I was in California a few weeks ago, and to own a home out there, one that would go for $150K here, you need to be making well over $250K just to break even. Unless you want to rent space to all the "non-documented" workers living in CA.
Let the market decide who is rich, not some government pin head who is engaging in class envy/warfare.
"If We Kept The Payroll Tax Rate Exactly The Same But Applied It To
All Earnings And Not Just The First $97,500, We Could Virtually Eliminate The Entire Social Security Shortfall." (Sen. Barack Obama, Op-Ed, "Fixed-Income
Seniors Can Expect A Tax Cut," Quad City Times [IA], 9/21/07)
"I Think That Lifting The Cap Is Probably Going To Be The Best Option."(Sen. Barack Obama, Democrat Presidential Candidates Debate, Hanover, NH, 9/26/07)
Obama's Chief Economic Advisor Austan Goolsbee: "An Increase In The
Payroll Tax Of 6 Percentage Points Phased In Over Many Years Or Decades
Doesn't Strike Me As A Dramatic Move." (James Pethokoukis, "Goolsbee
Speaks!," U.S. News & World Report, 4/11/08)
“There is only one way to kill capitalism – by taxes, taxes, and more taxes.” Karl Marx (1818-1883)