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Are the Rich Undertaxed? The Democrats’ class-warfare rhetoric is too rich for most Americans.
National Review ^ | 07/14/2011 | Michael G. Franc

Posted on 07/14/2011 9:17:42 AM PDT by SeekAndFind

Rarely has class-warfare rhetoric been so overwrought.

Last week, Senate Majority Leader Harry Reid (D., Nev.) “explained” the GOP’s motive in withdrawing from stalled debt-ceiling negotiations this way:

Why? To protect oil companies. To protect the owners of yachts and corporate jets. To protect corporations that ship jobs overseas. To protect millionaires and billionaires from paying their fair share.

Sen. Sheldon Whitehouse (D., R.I.) fleshed out this explanation with a few specifics:

When our Republican colleagues talk about defending against tax hikes, they are talking about . . . protecting the top 400 income earners in the country who, on average, pay [18.2 percent in] Federal taxes. . . . These are people who made on average more than a quarter-billion . . . in one year. And God bless them. What a wonderful thing it is to make more than a quarter-billion dollars in one year. But they pay taxes at a lower rate than a truck driver in Rhode Island does on average; the guy who wakes up every morning and gets into his clothes and puts on his boots and gets in the truck and goes out there and works all day, pays the same tax rate as the person earning over a quarter-billion dollars.

Putting it all in sober perspective, Sen. Barbara Boxer (D., Calif.) observed: “This is America. This isn’t pre-revolutionary France, where the king had everything.”

That’s right. Off with their heads!

To highlight the GOP’s intransigence, Reid offered a non-binding resolution. Dubbed the “Sense of the Senate on Shared Sacrifice,” it calls on “those earning $1,000,000 or more per year [to] make a more meaningful contribution to the deficit reduction effort.”

The Hill nailed the real reason Senator Reid interrupted all serious Senate business to debate this meaningless rhetorical exercise in class warfare. “The vote,” the newspaper reported, “will likely be used by Democrats as a way to show Republican resistance to new tax hikes.”

Republicans opposed to tax hikes? Now there’s a breaking news story!

But this is a debate worth having. Let’s review the data.

Our tax code already ranks among the most “progressive” in the industrialized world. While it’s true that the “rich” have been earning a steadily increasing share of all income over the last three decades, they have shouldered a disproportionate share of the overall tax burden. Today the wealthiest 1 percent of American households earn 20 percent of all income — more than twice the share they earned in 1980 and no doubt a class-warfare crime of the first magnitude. But they pay 38 percent of all income taxes, up from the 19 percent they paid in 1980. This, despite Congress’s halving top marginal tax rates since the Carter years.

The lower marginal tax rates that have prevailed since Reagan’s time have resulted in a lower tax burden on not only rich, but also middle- and lower-income Americans. Back in 1981, the bottom half of wage earners paid 7.45 percent of all taxes; today, their share is barely a third of that (2.7 percent).

None of this, of course, comports with the liberal class-warfare narrative.

Liberals take solace from polls that show large majorities of Americans favor increased taxes on “millionaires and billionaires.” An April New York Times/CBS News poll, for example, found that 72 percent of Americans thought households earning over $250,000 a year should pay more taxes to lower the budget deficit.

But consider the context in which Americans hear questions like this. What, exactly, do they think the “rich” pay in taxes today? How many Americans appreciate the truly progressive nature of our current tax system? And, more important, do Americans believe there should be some sort of cap or limit on how much we send to Uncle Sam? If so, what might that limit be?

First, polling suggests that Americans see the rich as surrounded by legions of the best tax lawyers and accountants money can buy, who use arcane loopholes in the tax code to shelter their income from the taxes the rest of us must pay. Accordingly, they assume the rich pay little or no taxes. For example, one poll found that only 24 percent of Americans believe the rich pay “the highest percentage of their income in total federal taxes.” Over half see middle-income earners as bearing the heaviest load. In reality, the IRS reports that the wealthiest 10 percent of taxpayers, who account for fully 70 percent of all income-tax receipts, send Uncle Sam an average of 18.7 percent of their income. The next wealthiest 40 percent face an average tax rate of barely 8 percent. Finally, the average tax rate paid by the bottom half of Americans stands at a mere 2.6 percent.

So it is not surprising that, in the abstract, Americans feel that wealthy individuals can belly up to the bar and shoulder a heavier tax burden, all for the common good. That’s not asking too much, is it?

Okay, perception is reality. But what do Americans think a “fair” tax burden looks like? What’s the maximum proportion of an individual’s income — even someone who meets the definition of being rich — that government should take in taxes?

The answers will surprise, and disappoint, the class warriors.

Between 2005 and 2009, the Tax Foundation commissioned a series of polls asking voters to assess the “maximum percentage of a person’s income that should go to taxes — that is, all taxes, state, federal, and local?” The mean response, between 14.7 percent and 16.0 percent, was well below today’s actual total tax burden.

Similarly, in 2009 Fox/Opinion Dynamics asked: “Out of every dollar, what’s the highest percentage anybody should have to pay?” Over half said the total tax burden should be less than 20 percent; another quarter thought it should top out at between 20 percent and 30 percent. Only one in ten saw a top rate of over 30 percent as acceptable.

Finally, yet another 2009 poll, this one commissioned by Resurgent Republic, asked voters to pinpoint “the maximum percentage that the federal government should take from any individual’s income — 10 percent, 15 percent, 20 percent, 30 percent, 40 percent, 50 percent or more?” One-third took the biblical view and said the government’s claim should be no greater than 10 percent of our incomes. Another third of voters would tolerate a total tax burden of somewhere between 10 and 20 percent. In all, 69 percent of registered voters — including 62 percent of registered Democrats — want to keep at least 80 percent of what they earn and will grudgingly concede the remaining 20 percent to the government. A tax system that crosses this line in the sand garners little support, a mere 7 percent of registered voters and only 11 percent of registered Democrats.

It’s rare to find such consistency in polls conducted by a wide array of polling organizations. And serendipitously for conservatives, this sentiment comports with current reality. The average federal tax rate tops out at 18.7 percent for the wealthiest tenth of Americans and registers below 10 percent for everyone else.

Liberals, we know, want to push an unprecedented tax burden on Americans that could exceed 25 percent of gross domestic product, and they envision federal spending trending even higher. The good news as we enter the final stages of the negotiations over the debt ceiling is that Americans will not tolerate this new normal.

— Michael G. Franc is vice president of government studies at the Heritage Foundation

TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Government
KEYWORDS: rich; taxation; taxes; wealthy
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1 posted on 07/14/2011 9:17:48 AM PDT by SeekAndFind
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To: SeekAndFind

Congressional Members' Personal Wealth Expands Despite Sour National Economy

2 posted on 07/14/2011 9:21:14 AM PDT by mewzilla
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To: SeekAndFind

Obama TOLD THEM that his populist BS “Was just campaign rhetoric” in 2008.

Filthy Rich Democrats tell ignorant people to hate rich people, while those very same Democrats get EVEN RICHER from the hate of the stupid people.

I’ve always found that to be ironic.

3 posted on 07/14/2011 9:21:46 AM PDT by tcrlaf (You can only lead a lib to the Truth, you can't make it think...)
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To: SeekAndFind

If I knew that increased tax revenue was going to be wisely spent I might be in favor of it. But the politicians (both sides) have always sprnt all the tax money that is collected. So of course if you give more they will spend that too. So, nope, no more money for you.

4 posted on 07/14/2011 9:21:46 AM PDT by ExtremeUnction
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To: SeekAndFind

The UNDERCLASS in UNDERTAXED!! 48% of the people pay NO FEDERAL INCOME TAX!!!!!!! And a good percentage of themGET A CHECK BACK FROM US, the TAXPAYERS!!!!!!!!<P.FLAT TAX! NOW! EVERYONE nneds some skin in the game...EVERYONE!!!! I don’t care if they only pay $300.00 a year they need to be TAXED!!!!

5 posted on 07/14/2011 9:22:47 AM PDT by Ann Archy (Abortion is the Human Sacrifice to the god of Convenience.)
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To: SeekAndFind

So instead of letting the “Bush Tax Cuts” expire . . .which max out at ridiculously low taxable incomes, certainly far below the “400 richest” Americans . . . why don’t the Democrats just move the max rate up to the “400 richest Americans”?

Or if they’re so concerned about “The Rich” vs. the truck drivers . .why didn’t they eliminate the dividends and capital gains rates when they had both the Congress and the WH?

This just shows how full of crap and divisive these idiots are. And their media lapdogs don’t know enough about taxes and finances to ask the proper questions . . . even if they weren’t so in the tank for these jackasses.

6 posted on 07/14/2011 9:23:43 AM PDT by A_Former_Democrat (EX Congressman Anthony Weiner: "Celebrate 'Perversity'")
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To: SeekAndFind
Demorats are under taxed. Democrats overspend. Democrats try to thorw conservatives under the bus.
7 posted on 07/14/2011 9:28:09 AM PDT by mountainlion (AMERICA LOVE IT OR LEAVE IT.)
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To: SeekAndFind

Let’s see how to solve this. How about - The minimum wage should be raised so that all people pay an INCOME tax.

8 posted on 07/14/2011 9:28:31 AM PDT by ex-snook ("Above all things, truth beareth away the victory")
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To: SeekAndFind
 pays the same tax rate as the person earning over a quarter-billion dollars.

2 planks of communism by Karl Marx:

1. Abolition of private property in land and application of all rents of land to public purpose. Author’s Comment: This is where eminent domain comes into the picture, and even property taxes. Once you own your property outright by paying off your mortgage, you still don’t technically own it because the government could jack up property taxes so high that it makes it unaffordable to remain.

2. A heavy progressive or graduated income tax. Comment: Marginal tax rates increasing as income goes up IS a graduated income tax. This is in opposition to a more fair tax like a national sales tax or flat tax where a person is not taxed at a higher rate the more income they earn.

9 posted on 07/14/2011 9:28:38 AM PDT by mjp ((pro-{God, reality, reason, egoism, individualism, natural rights, limited government, capitalism}))
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To: SeekAndFind
The leftist have convinced themselves of yet another fantasy, which they believe with the fanaticism of any jihadist: That if only the “rich” were taxed as they should be, the regulatory/welfare state can grow and grow and grow forever.

The more that the reality that we are broke, and that the era of ever-growing government must end, the more desperately they will resort to the rhetoric and the policies of class warfare to sustain their illusions.

10 posted on 07/14/2011 9:28:38 AM PDT by mojito
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To: mewzilla

I’ll agree to a tax hike when the 49% that pay no tax cough up. Even people drawing unemployment pay taxes. This is class warfare plain and simple

11 posted on 07/14/2011 9:30:07 AM PDT by gunner03
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To: SeekAndFind

Because of the class warfare.. almost all Americas jobs have been shipped to China, India, and points east.. the job providers are not stupid.. they know who despises them..

Liberalism is really just a problem with envy..
Liberals envy the producers.. who are the employers..
Envy politically is called the american democrat party..

12 posted on 07/14/2011 9:32:30 AM PDT by hosepipe (This propaganda has been edited to include some fully orbed hyperbole...)
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To: SeekAndFind

We must not let our "rulers" complete their "transformative" intentions by ongoing manufactured "crises," each one ceding more power to the central government.

Instead, American citizens must recognize that, for "the People," the question is between freedom and slavery to government.

"It is proper to take alarm at the first experiment on our liberties. We hold this prudent jealousy to be the first duty of citizens and one of the noblest characteristics of the late Revolution. The freemen of America did not wait till usurped power had strengthened itself by exercise and entangled the wuestion in precedents. They saw all the consequences in the principle [usurpation of power], and they avoided the consequences by denying the principle. We revere this lesson too much . . . to forget it." - James Madison

". . . we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. - Thomas Jefferson

". . . nip the shoots of arbitrary power in the bud, is the only maxim which can ever preserve the liberties of any people. When the people give way, their deceivers, betrayers, and destroyers presss upon them so fast, that there is no resisting afterwards. The nature of the encroachment upon the American constitution is such, as to grow every day more and more encroaching. Like a cancer, it eats faster and faster every hour. The reveue creates pensioners, and the pensioners urge for more revenue. The people grow less steady spirited, and virtuous, the seekers more numerous and more corrupt, and every day increases the circles of their dependents and expectants, until virtue, integrity, public spirit, simplicity, and frugality, become the objects of ridicule and scorn, and vanity, luxury, foppery, selfishness, meanness, and downright venality swallow up the whole society." - John Adams

13 posted on 07/14/2011 9:41:58 AM PDT by loveliberty2
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To: SeekAndFind

Tax rates are only a fraction of the picture.

Regardless of the rate when politicians squander the money on buying votes, funding pie in the sky projects and the usual fraud, abuse and waste then there is no point throwing good money after bad.

Liberals had an admittedly good run with their media cheering section convincing people that a welfare state was a good idea but statism has failed, cities are in ruin and despite talk of morality with respect to ‘our most vulnerable Americans’ the reality is that continuing to subsidize sloth, crime, illegitimacy and substance abuse is the most immoral thing we can do.

14 posted on 07/14/2011 9:42:21 AM PDT by relictele (Pax Quaeritur Bello)
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To: SeekAndFind
The Democrats really do believe the rich are under taxed.

They believe this because they know the top tax rate was as high as 90% in the 50’s.

Here's the problem. YES, the top tax bracket was 90% in the 50’s BUT there were A LOT more deductions back then. What liberals don't understand is that it doesn't matter what you would pay in income taxes if you took no deductions and declared every cent of your income. What matters is what you ACTUALLY PAY!

So ... having clarified that, lets look at what people ACTUALLY PAY now versus what they paid in the past.

Honestly, I have no idea what exact percent of income tax revenue was paid by the rich in the past, BUT what I do know is that today the bottom 50% of the population pays ZERO!

So... Knowing that today the bottom 50% pay Nothing, and in the past they paid some... I don't even need to know the exact percent that the rich actually paid in taxes... because today they pay MORE than they did in the 50’s! How do I know this ... well if the bottom 50% pay NOTHING today, then the top 50% have to be paying more, that's simple math. The problem is liberals do not know this!!!! they really believe with all their hearts that the rich pay LESS in taxes today than they did in the 50's.

The other thing liberals think that is flat out wrong is that Reagan gave tons of money to the rich through his tax cuts in the 80's. This is ANOTHER misconception, based on lack of knowledge. Yes Reagan cut tax rates .... BUT he also eliminated tons of tax loop holes and deductions... The net result? The rich ended up paying MORE ! ???? what you say??? I know, people don't ever follow this to the end, but yes the top 50% of all tax payers paid MORE total dollars to the government after Reagan's tax cuts than they did before.

15 posted on 07/14/2011 9:46:16 AM PDT by TexasFreeper2009 (Obama = Epic Fail)
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To: Ann Archy
The UNDERCLASS in UNDERTAXED!! 48% of the people pay NO FEDERAL INCOME TAX!!!!!!!

"If you rob Peter to pay Paul, you can always count on Paul's vote."

Once the percentage of Pauls is over 50%, you will never lose an election again.

16 posted on 07/14/2011 9:51:36 AM PDT by Polybius
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To: SeekAndFind; All

Even better way to save money... Cut salaries for politicians and governement employees and ban public union rackets like the SEIU.

17 posted on 07/14/2011 10:00:00 AM PDT by mainestategop (DonÂ’t Let Freedom Slip Away After America , There is No Place to Go)
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To: SeekAndFind
To a Democrat, anybody who has unspent money is "rich."

The very idea of not pissing away every cent you can get your hands on as fast as you can get your hands on it is sacrilege to them.

18 posted on 07/14/2011 10:12:05 AM PDT by E. Pluribus Unum ("A society of sheep must in time beget a government of wolves." - Bertrand de Jouvenel des Ursins)
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To: loveliberty2
Excellent quotes.

The Republican leadership does not effectively fight the class hatred rhetoric of the Left. They had better learn to do so, or we will continue to lose our way.

A proper response would start with a reference to the tax policy set out in Article I, Section 9, of the Federal Constitution, which forbids any direct tax on the citizenry that is not per capita (i.e., does not fall equally on every citizen). While this was changed by the Sixteenth Amendment to allow tax on income, that does not make the idea of a confiscatory tax on some citizens--a penalty for daring to succeed--any less onerous.

The Founding Fathers believed in equal access to the Courts & protection of the property rights of all--including a recognition of the sanctity of contracts, the enforcement of contract rights;--but the idea of using Government to take from Peter to corrupt Paul was anathema. We need to stand firm against the Socialist Egalitarian war on human achievement. It is, indeed, the Greatest Mischief Ever Wrought.

No one should ever be made to apologize for success; no one should be demonized for not agreeing to be penalized to fund the folly of Social Engineers, trying to undo what others achieve; or to reduce the less successful in any society to dependence upon demagogues & scoundrels..

William Flax

19 posted on 07/14/2011 10:29:50 AM PDT by Ohioan
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To: Ohioan
Thank you for your post. The quotations cited above appeared in the "Notable Quotations" section of a Bicentennial of the Constitution Volume (1987) entitled, "Our Ageless Constitution," a 292-page illustrated book outlining the principles of the Declaration and Constitution. The volume's contributors included Dr. Russell Kirk, Dr. Charles Rice, Dr. Walter Berns, and other constitutional scholars who traced the ideas underlying the American Constitution, as well as the ways the nation's leaders had undermined that Constitution over the 200 years. It has been reprinted and is now available here.

From your "about" page, it appears that volume would interest you.

20 posted on 07/14/2011 11:40:48 AM PDT by loveliberty2
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