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Peter Schiff: The Fantasy of a 91% Top Income Tax Rate
Wall St. Journal ^ | 12/6/12 | Peter Schiff

Posted on 12/07/2012 4:52:35 AM PST by bigcat32

Democratic Party leaders, President Obama in particular, are forever telling the country that wealthy Americans are taxed at too low a rate and pay too little in taxes. The need to correct this seeming injustice is framed not simply in terms of fairness. Higher tax rates on the wealthy, we're told, would help balance the budget, allow for more "investment" in America's future and foster better economic growth for all. In support of this claim, like-minded liberal pundits point out that in the 1950s, when America's economic might was at its zenith, the rich faced tax rates as high as 91%.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: peterschiff

1 posted on 12/07/2012 4:52:39 AM PST by bigcat32
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To: bigcat32

Don’t let Dems get away with claiming the rich paid more in taxes in the 50’s than they do today. I ran into this argument a few times lately. Here’s some ammo to counter that false claim if you need it.


2 posted on 12/07/2012 4:55:13 AM PST by bigcat32
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To: bigcat32

I visit left leaning web sites all the time, and this 91% lie is one of their favorites.

We will NEVER be able to move forward until this lie is crushed once and for all.


3 posted on 12/07/2012 4:58:32 AM PST by TexasFreeper2009 (Obama lied .. the economy died.)
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To: bigcat32

So the top 3% have doubled their percentage of income since 1958, and the poor have cell phones and flat screen televisions. Somebody got screwed.


4 posted on 12/07/2012 5:04:18 AM PST by King Moonracer (Bad lighting and cheap fabric, that's how you sell clothing.....)
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To: bigcat32

All the rhetoric about so-called “fair” tax rates is nothing but lies and horse sh*t.

As everyone knows, it’s simply the product of an effort by closet Marxists in the government to garner favor with the jealous masses by punishing the successful for being successful.

The only thing these tax rates will do, when combined with the endless red tape binding up businesses, is bring the economy to its knees.

That’s fine with Obama, of course, since the destruction of the American economy is what he’s wanted since he was a kid in knee breeches.


5 posted on 12/07/2012 5:17:05 AM PST by Jack Hammer
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To: TexasFreeper2009

Schiff is using records to prove that practically NOBODY made enough money in the 50’s to fall into the 91% tax rate. He also goes on to prove that practically nobody paid the other upper tax rates. Also, the lower income earners ALL paid taxes unlike today where many people pay ZERO taxes.

This is information that MUST get out there in order to win these tax arguments.


6 posted on 12/07/2012 5:20:39 AM PST by bigcat32
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To: TexasFreeper2009

Schiff is using records to prove that practically NOBODY made enough money in the 50’s to fall into the 91% tax rate. He also goes on to prove that practically nobody paid the other upper tax rates. Also, the lower income earners ALL paid taxes unlike today where many people pay ZERO taxes.

This is information that MUST get out there in order to win these tax arguments.


7 posted on 12/07/2012 5:23:46 AM PST by bigcat32
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To: bigcat32
In contrast, the share of taxes paid by the bottom two-thirds of taxpayers has fallen dramatically over the same period. In 1958, these Americans accounted for 41.3% of adjusted gross income and paid 29% of all federal taxes. By 2010, their share of adjusted gross income had fallen to 22.5%. But their share of taxes paid fell far more dramatically—to 6.7%.

Highly unlikely. "All federal taxes" covers a lot more than income tax. In fact, income tax is only about 50% of the total of federal taxes. The others are not graduated by income, for the most part.

Conservatives make an error here that I think actually weakens our cause.

We talk about "federal income tax," which is disproportionately paid by those with high incomes, as if it is the only tax imposed on Americans.

This is of course untrue, as we're all willing to admit in other contexts. State and local taxes and federal payroll taxes make up the considerable majority of all taxes, and most of these are not significantly graduated by income.

Fine, let's talk about the comparative tax burdens carried by different income groups. But let's talk about their total tax burden, not just one segment of it because we think it helps our case. Such dishonesty, while tempting, is I think in the long run counter-productive.

8 posted on 12/07/2012 5:30:38 AM PST by Sherman Logan
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To: bigcat32

Also, the lower income earners ALL paid taxes unlike today where many people pay ZERO taxes.
= = = = = = = = = = = = = = = = = = = = = =
Not only that, but today most all (lower income earners) receive a LARGE refund check.

On the ‘daytime Judge shows’, most unpaid loans (where the downtrodden concerned) were made because the receiver was going to pay back with his tax refund and/or that 30 something waiting for his/her ‘college’ money.

Granted in some case the ‘govt’ will intercept tax refunds to repay some old debt but that is kind of like switching money from one pocket to the other and claiming you either gained or lost (dependent on what you are trying to accomplish).

I love it when the ‘big lottery’ winners start crying when Unca Sugah says ‘HOLD ON’ that 3 trazillion lottery winner will not be paid till A. we get our ‘share’(?) and B. you pay off all this back welfare and refund some of the freebies you have been receiving...

THAT is when the ‘pig squeals’


9 posted on 12/07/2012 5:34:22 AM PST by xrmusn (6/98 "It is virtually impossible to clean the pond as long as the pigs are still crapping in it")
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To: bigcat32

Financial File.


10 posted on 12/07/2012 5:38:29 AM PST by Graewoulf ((Traitor John Roberts' Obama"care" violates Sherman Anti-Trust Law, AND the U.S. Constitution.))
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To: Sherman Logan

Let’s throw some stats on the table to prove what you’re saying. By “let’s” I mean Sherman Logan.


11 posted on 12/07/2012 5:40:11 AM PST by bigcat32
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To: bigcat32
This is information that MUST get out there in order to win these tax arguments.

Based on what happened last month, there's no tax argument we can win! It's the free stuff! "Panem et circenses" ("Bread and Circuses") = Food Stamps and Obamaphones.

Hopefully, this will implode like it did in Rome -- and hopefully sooner rather than 300 years from now.

I'm with Rand Paul, let Obama have what he wants. The only way to kill the beast is to starve it, and the only way to starve it is to cut off its food. Just grab the bugout bag and watch Rome burn from the hills.

12 posted on 12/07/2012 5:45:37 AM PST by Sooth2222 ("Suppose you were an idiot. And suppose you were a member of congress. But I repeat myself." M.Twain)
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To: TexasFreeper2009

If 91% taxation of the “rich” is the road to prosperity, then why not 91% taxation of everyone?

A local government employee did a study of libraries. The results of which indicated that libraries return $4 for every $1 collected in local taxes. I suggested that we immediately shut down our schools and local government and put all the money in libraries. Then we’d all be rich.


13 posted on 12/07/2012 5:52:43 AM PST by 1010RD (First, Do No Harm)
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To: bigcat32

The elites won’t pay it, because they have tax evasive options. Poor suckers like us foot the bill.


14 posted on 12/07/2012 5:54:00 AM PST by crosshairs (Hurricane Barry is 1000 times more destructive than Hurricane Sandy.)
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To: TexasFreeper2009
I visit left leaning web sites all the time, and this 91% lie is one of their favorites.

I think the take-away information in that article is "Yes... and the poor were paying 20%. Do they now? You want to go back to that? Because that's what really made it work." That oughtta shut them up for a minute or two.

15 posted on 12/07/2012 5:55:51 AM PST by A_perfect_lady (Great nations are born stoic and die epicurean. -Will Durant)
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To: bigcat32

According to the author, all federal taxes paid by the bottom two-thirds of Americans was 6.7%, while their share of adjusted gross income was 22.5%. 40% of federal taxes are payroll taxes.

Since payroll taxes are deducted from gross income, this bottom 2/3 therefore paid at least 22.5% of that 40%. This comes to 9%, which is of course a good deal more by itself than the 6.7% of “all federal taxes” he claims they pay.

In actual fact, of course, this bottom 2/3 group pays much more than 22.5% of payroll taxes, since Social Security tax is not charged on income above $110,000.

Do you disagree that when we talk about taxation, we should talk about total taxation, not one tax?


16 posted on 12/07/2012 6:01:02 AM PST by Sherman Logan
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To: bigcat32

The federal government collects about 2/3 of all tax revenue. About 50% of that is corporate and individual income tax.

Thus about 1/3 of all taxes in the US are federal income tax.

Yet in discussions about whether the rich are over or under taxed, this particular tax is generally the only one discussed by both sides. That seems a little odd to me.


17 posted on 12/07/2012 6:08:51 AM PST by Sherman Logan
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To: bigcat32

Here in FL sales tax is 7.5%. Payroll tax at present takes another 5.65%.

So any employed person here is paying over 13.15% in taxes, no matter how little they make. Much more in reality, of course.

To be fair, much of this is offset by the reverse income tax payments.


18 posted on 12/07/2012 6:22:03 AM PST by Sherman Logan
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To: bigcat32
"Don’t let Dems get away with claiming the rich paid more in taxes in the 50’s than they do today."

I worked a little with someone who was the son of an industrialist. The industrialist formed his companies during the time the upper income tax rate was 90%. One of the companies he started was an airline even though he knew it would fail. His reason: "I would rather waste my money on an operation where I can interview stewardesses for jobs, than give it to the government".

This is proof of one of the reasons why an increase in tax RATES does not create a proportionate increase in tax REVENUES.

19 posted on 12/07/2012 6:44:06 AM PST by norwaypinesavage (Galileo: In science, the authority of a thousand is not worth the humble reasoning of one individual)
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To: bigcat32
Also, the lower income earners ALL paid taxes unlike today where many people pay ZERO taxes.

It's MUCH worse than that! They get a "refund" of money they did not even pay in!

20 posted on 12/07/2012 6:45:14 AM PST by Onelifetogive (I tweet, too... @Onelifetogive)
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To: crosshairs
"The elites won’t pay it, because they have tax evasive options. Poor suckers like us foot the bill."

that's simply not true. The top 1% of the income earners pay 39% of the income taxes, the 25% of the people in the upper income brackets pay 86% of the income taxes. The 50% of the people in the lower income brackets pay 3% of the income taxes.

21 posted on 12/07/2012 6:54:56 AM PST by norwaypinesavage (Galileo: In science, the authority of a thousand is not worth the humble reasoning of one individual)
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To: Sherman Logan
"Here in FL sales tax is 7.5%. Payroll tax at present takes another 5.65%. So any employed person here is paying over 13.15% in taxes, no matter how little they make."

You can't add sales tax in because a large portion of money spent may not be charged sales taxes. Items like rent, mortgages, interest, utilities, and food and labor in most states, are not charged.

22 posted on 12/07/2012 7:03:45 AM PST by norwaypinesavage (Galileo: In science, the authority of a thousand is not worth the humble reasoning of one individual)
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To: Sherman Logan

“Yet in discussions about whether the rich are over or under taxed, this particular tax is generally the only one discussed by both sides. That seems a little odd to me.”

Why is that odd? Income tax is confiscation of property. Sales taxes, gas taxes and the like are based on consumption and not production. Income tax is what government takes from our production and it is this tax which should be discussed. Why should tax on production be graduated upward based on amount produced? It’s a penalty on production which suppresses production which is bad for job creation and for society. That’s the point.


23 posted on 12/07/2012 7:07:02 AM PST by bigcat32
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To: norwaypinesavage

Good point. So we pay sales tax on a percentage of purchases, not all of them.


24 posted on 12/07/2012 7:15:57 AM PST by Sherman Logan
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To: Sherman Logan
Here in FL sales tax is 7.5%. Payroll tax at present takes another 5.65%.

So any employed person here is paying over 13.15% in taxes, no matter how little they make. Much more in reality, of course.

There is a problem with your math. No one spends 100% of their income on taxable expenses. Most states do not charge sales tax on the biggest expenditures - food, housing, transportation, services, etc. So to get a realistic figure, you would have to estimate what percentage of their income they spend on taxable items. So if they spend 20% of their income on taxable items, the calculation would be 5.65% (FICA) + (20%*7.5%) = 5.65%+1.5% = 7.15%.

25 posted on 12/07/2012 7:39:38 AM PST by CA Conservative (Texan by birth, Californian by circumstance)
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To: bigcat32

Obama knows all the facts. He doesn’t care. He’s a leftist ideologue bent on destroying the traditional American economy. It’s all about “fairness” don’t you see. It’s not fair that some people make a lot more than others. Obama will fix that. He’ll fix everything. (snicker)


26 posted on 12/07/2012 7:50:43 AM PST by driftless2
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To: Sherman Logan

Actually, FL sales tax is 6.0%. The rest is local. Where I live it’s a county tax of 1.0% (applied only up to the first $5,000 of a transaction).


27 posted on 12/07/2012 8:15:43 AM PST by Darth Reardon
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To: driftless2

“Obama knows all the facts. He doesn’t care.”

It’s our job to inform the “useful idiots” who are brain washed by the lies of the left. It’s our job to inform the people who do care and are interested in facts. There will always be people who are informed and still want to destruct America. We need to change the minds of people where we can.


28 posted on 12/07/2012 8:24:38 AM PST by bigcat32
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