Skip to comments.The Rich ARE Paying More In Taxes! (who would believe this? do miracles happen?)
Posted on 04/28/2006 12:26:37 PM PDT by eleni121
The Bush tax cuts have been routinely assailed as multimillion dollar giveaways to the Rolls Royce owners of America at the expense of the middle class.
But new IRS statistics on the taxes Americans pay show that George Bush's tax policies actually soak the rich.
It turns out that the income tax burden has substantially shifted onto the wealthy. The percentage of federal income taxes paid by those who make more than $200,000 a year has actually risen from 41% to 47% in recent years.
In other words, the richest 3 out of 100 Americans are now paying close to the same amount in income taxes as the other 97% of workers combined.
It's also a common myth that the rich are hording all the wealth, while the middle class stays stuck in economic quicksand.
The IRS data show that the share of all income earned by the wealthiest 10% of Americans has actually fallen since 2001. The rich are earning less of the total income but paying more of the total taxes.
During this economic expansion, the middle class is growing and becoming more prosperous. About 4 out of 10 Americans now make more than $50,000 a year -- that's up from 3 out of 10 in 1990.
There's more good news. Tax revenues over the past two years are up more than half a trillion dollars the largest two-year increase in tax collections in history.
Bush cut the capital gains and dividend taxes, but guess what? Now those tax receipts are through the roof in the last two years.
It's called the Laffer Curve: a lower tax rate has increased economic growth and investment and thus the government gets more tax revenues.
The Bush tax cuts have pumped steroids into the US economy and created 5 million new jobs, a surge in new business investment and record worker productivity.
Those are the reasons to make the tax cuts permanent. But for those who really want to sock it to the rich, the Bush tax cuts have done that too.
Steve Moore is a member of the editorial board at the Wall Street Journal.
Steve Moore actually spoke out for the President's tax cuts and probably infuriated the few thousand liberals who heard it. After all, they are used to listening to Robert Reichhhhh pontificate about the joys of redistribution of income through higher taxation and government mandate.
I knew about the Capital Gains tax being ahead of the Laffer Curve... I wonder what other taxes are as well?
While I agree with his premis, this stat is meaningless if it is not indexed for inflation...
yet the MSN is dead silent....
but they trumpted "tax cuts for the rich" without issue.
We all wish we were included with these who are paying more taxes.
What percentage of their income goes towards paying various federal excise taxes, and how does that compare with other Americans?
According to BEA data, federal excise taxes and tariffs make up less than 5% of total revenue receipts.
According to CBO, the top quintile pays more than 33% of excises collected, the bottom quintile pays less than 12% of excises collected.
This is all meaningless if we're just going to SPEND ALL OF IT.
"While I agree with his premis, this stat is meaningless if it is not indexed for inflation..."
Step it up a notch dude, why not make 50K when 50K was real money like I did in the '80's. $50K is barely enough to get by on unless you owe less that $100K on your home.
Point: Indexed for inflation we are all lower middle class if combined income is sourced.
If anyone would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer for additional information:
Here are a few:
1. FICA taxes a big chunk of their first $90K in wage income.
2. Property taxes hit them harder than lower income folks as these high income people tend to own larger and much higher-valued properties.
3. Sales taxes, while to some extent are regressive, also hit higher income people harder as they tend to spend a higher amount on taxable goods than those with lower income. (Besides consumption taxes are SUPPOSED to be a factor of consumption and not a factor of income or wealth.)
4. Higher income earners also tend to have more income from dividends and investments, which also means the soak-the-rich crowd also gets to enjoy the fact that they are double-taxed on these items.
Class envy is alive and well in this country. How long before the producers have had enough of carrying everyone else and they shrug?
Let's not forget the lovely AMT.
There are other ways - less well recognized, but just as effective in draining bux from you.
One is the hidden taxes that are embedded into the prices of everything that we buy. This in no way means payroll/withholding taxes but means the income taxes that businesses pay as well as compliance costs. These all must be paid for and that's done by increasing prices to take up the slack.
A second way to "tax" the unwary without them knowing it is actually managing of the money supply by the Federal Reserve so that it keeps inflation creeping upward just a bit each year for year after year. This inflation is merely another type of hidden tax and it is purposely done rather than being some force of nature.
Interesting. I remember hearing the democrats back in the 80s when I was a kid saying that poor people were paying all the taxes. My father would always laugh and say ,"How can the poor being paying all of the taxes, they don't have any money!". Nothing against poor people mind you, but definitly against the democrats.
Does anyone know where we can access these statistics on-line?
All I can say is more than 41% of all my income goes directly to income taxes. And then there's all the other taxes after that...
Try the IRS. That is where Steve got his data.
then click tax stats.
When I get a chance I will try to get more specifics. If you find what you are looking for please share.
yet the MSN is dead silent..
You're on the right track, but you also have to compensate for overall economic growth. Even in constant dollars, more people make over $50,000 in 1990 dollars than in 1990. What you have to do is pick some percentage of the population (say 2%) and ask what percentage of the overall burden they bear, as compared to when Bush took office.
Of course, there's another way to look at it. Everybody's getting rich in real terms. Even if taxes become "regressive", it's still only a matter of time before "the rich" bear the entire tax burden, because even the lower tax brackets will be objectively rich. Compared to the rest of the world, that's already true.
bump for later
Don't forget personal property taxes. In CA, you not only pay a Sales Tax when you purchase a vehicle, but a tax every year you own it that is based on the value of the vehicle. High value, high tax every year. Also high insurance cost -- and the insurance bill contains taxes.
Also don't forget that wealthier people tend to purchase high-end products. High-end products were more profitable for the producer, and therefor the producer paid more income tax. That income tax got embedded into the purchase price. Lower-profit items contain lower-embedded taxes.
It goes on and on. The more you look at taxes at every level of government, you realize how skewed they are in true Marxist fashion to place the burden of society on those "who can afford it".
Even the "regressive" cry about SS taxes is false since the eventual benefits paid out show those contributions were a horrible investment for poeple at the top end and a good investment at the low end.
"The percentage of federal income taxes paid by those who make more than $200,000 a year has actually risen from 41% to 47% in recent years."
I also agree with the basic idea of the article. But I am confused with the above statement. Isn't the percentage of taxpayers making over $200,000 necessary for this to be properly compared. Maybe they are making a greater percentage of aggregate income (not sure whether this is the right term), therefore paying a greater percentage of taxes. I am not a statistician, but this article seems to leave out a lot of important information.
That number was provided.
"In other words, the richest 3 out of 100 Americans are now paying close to the same amount in income taxes as the other 97% of workers combined. "
3% of people fell into the $200,000+ category.
It doesn't say that they fell into the $200,000 + category, just that they pay the taxes. I am not disagreeing that the rich pay a bulk of the taxes in this country. Obviously they do. But, what percentage of the income in this country do they earn? This article leaves out many important pieces of information. It seems to me that knowing what percentage of the population pays what percentage of the taxes is meaningless, unless we also know what percentage of the income they earn.
I would like to know more information about it. I frequently find myself arguing with liberal relatives about this topic. I would love to have some accurate statistics to back up my opinions. This article is a good start, but there is just too much missing information for it to be useful.
A good place to start your research and gain material for your arguments is at the Heritage Foundation specifically here:
Here is another one that lays the argument out.
I see it a lot on this forum. Sad really. The AMT is a crime.
Actually, it did say 3% of taxpayers fell into the $200K+ category. Read it again.
That doesn't sound like your real question, however. Sounds like you want to know what percentage of income belonged to that group. In other words, was the tax they paid proportionate to their share of all income ? The answer is "No."
The stats for 2005 are not yet available, but for 2003, they are here in the top table:
If you add up all the income for those in the brackets above $200K, they earned 27% of all income.
If you add up all the income taxes paid for these same lines, it is 39% of all income taxes.
Put another way, their average income tax bill was $310B(tax) / $1,150B(income) = 26% of their income -- while the average tax rate for all brackets below $200K was $470B / $3,050B = 15%.
It is actually even more skewed than that because this is just "taxable income" which might be after deductions, and deductions are phased out or proportionally nil for higher incomes. A $10K standard deduction would leave a couple earning $50K with only $40K = 80% of their gross income as taxable income. For a couple making $500K, a $10K deduction would leave 98% of their gross income as taxable.
Adding standard deductions back in to estimate Gross would increase the Gross income for the under $200K crowd to $4,030B and lower their effective average income tax rate to 12%. The effect on the Gross for the over $200K crowd would be to add $60B -- assuming they had $25K deductions rather than $10K standard deduction -- which would make their effective tax rate 25%.
So it looks like in 2003, the $200K+ crowd paid income taxes at twice the rate that the under $200K crowd did.
Thank you. That is what I wanted to know. With this information I feel pretty solid in my argument. It is never wise to argue with my relatives, without as much information as possible.
Even the name "AMT" is a misnomer unless you first accept a Socialist definition.
A TRUE "Alternative Minimum Tax" would mean that EVERYBODY paid some minimum amount of tax. It would not be targeted at the wealthy like the AMT is.
It would be some flat percentage tax that applied to all income -- without any deduction, exemptions, or credits -- to ensure an active interest in intelligent government spending even at the lowest levels of income.
Instead, the AMT targets the most productive people in our society and ignores the growing horde of less productive people that pay nothing.
The purpose of the progressive income tax and the AMT in particular is to chain the John Galts to their oars and be sure they keep working for the benefit of all the have-nots.
The scariest part is that the have-nots now control the entire world. Where can you find a Galt's Gulch to escape their demands ?
Try the FairTax for starters.