The stars look to be in perfect alignment for tax relief. With a GOP majority in both houses of Congress, the Bush Administration is making eager and energetic noises, and the economy is in what Fed Chairman Greenspan calls a soft spot.
I'm not sure what you said. But nobody should care what others earn. And income should not be taxed.
Yeah he is -- whatever Marxine Waters/Jerry Waddler/ Swimming Coach Kennedy and the other Congressional Marxists have told him to believe.
Hmmm! What makes you believe there will be no National Sale Tax with the Flat Income + VAT proposals?
Remember the little controversy concerning taxes on internet sales? It's still going on with states moving towards implementing them with the aid of the federal government to clear the way.
Whether we like it or not, there will be some form of federal sales tax ultimately. The only say we will have in the matter is wherther or not we will get rid of income & corporate taxes first.
The issue of the 16th amendment is totally bogus in respect to getting rid of the income tax. The 16th will not be repealed until after the income tax is removed from the statutes and is no longer seen as a politically viable method of taxation.
This is the flaw with progressive tax system. I'm sorry but it's just not right to divide the nation into taxpayers and non-taxpayers. It essentially creates two different classes of citizens, and the non-taxpaying class will always vote to increase the tax burden on others. If we had a fair media, they would constantly be harping on this, because this is the real fairness issue with taxes and it constitutes a real threat to our system of government.
I hazard a guess to say that the top 0.5% (or maybe even less) of earners can take such advantage of the loopholes available in complicated filings and blue bloods like the Rockefellers benefit from untaxed trusts.
It's the people who earn $75000 to $350000 who are socked in the gut with taxes.
The figures of the distribution of income taxes were recently released
by the IRS and are referenced by an article at www.rushlimbaugh.com
titled "Only The Rich Pay Taxes - Top 50% of Wage Earners Pay 96.09%
of Income Taxes". The complete article can be found at:
http://www.rushlimbaugh.com/home/menu/top_50__of_wage_earners_pay_96_09__of_income_taxes.guest.html
Following are some excerpts from the Rush article and my response:
> The top 1%, who earn 20.81% of all income covered under the income
> tax, are paying 37.42% of the federal tax bite.
:
> Here are the wage earners in each category and the percentages they
> pay:
>
> Top 5% - 56.47% of all income taxes; Top 10% - 67.33% of all income
> taxes; Top 25% - 84.01% of all income taxes. Top 50% - 96.09% of all
> income taxes. The bottom 50%? They pay a paltry 3.91% of all income
> taxes. The top 1% is paying more than ten times the federal income
> taxes than the bottom 1%! And who earns what? The top 1% earns
> 20.81% of all income. The top 5% earns 35.30% of the pie. The top
> 10% earns 46.01%; the top 25% earns 67.15%, and the top 50% earns
> 87.01% of all the income.
The above excerpt is from the article as it appeared on October 23rd.
On about November 6th, the last percentage in the sentence "The top 1%
is paying more than ten times the federal income taxes than the bottom
1%!" was changed from 1% to 50%. Apparently, someone figured out that
the statement was nonsensical or, at least, an understatement. You
see, due to the earned income credit, the bottom 1% paid negative
income taxes. Hence, I could correctly say that I personally paid
over a billion times the income taxes than the bottom 1%! In any
case, this percentage was changed to 50% in the article on the site.
The problem is that the statement then became untrue. As can be seen
from the excerpt above, the top 1% paid 37.42% of all income taxes
and the bottom 50% paid 3.91% (100 - 96.09). 37.42% is about 9.57,
not "more than ten", times 3.91%. The initial mistake was arguably
understandable. However, then changing it to an error seems a bit
disturbing. At present, the initial 1% version can still be seen at:
http://www.rushlimbaugh.com/home/daily/site_102502/content/top_50__of_wage_earners_pay_96_09__of_income_taxes.guest.html
I have posted several graphs and tables that compare the distribution
of income and taxes at
http://pweb.netcom.com/~rdavis2/distax.html .
The first graph and table show the distribution of income and federal
taxes for quintiles of wage earners (the top quintile is split into
two deciles). As can be seen, the distribution of income taxes paid
is heavily skewed toward the upper quintiles. However, income can
be seen to be similarly (though somewhat less) skewed.
The second table shows the relative skewing of federal taxes paid
compared to income. It shows how much more or less each group pays
than it would if its share of taxes were identical to its share of
income. Estate and gift taxes are the most heavily skewed toward
high-wage earners with the top 1% paying 334% more than would be
determined by its income. Individual and corporate taxes are the
next most heavily skewed with the top 1% paying about double what
would be determined by its income. The top 10% pays about 50% more.
The payroll tax is actually skewed toward the middle-wage earners
because Social Security taxes do not apply above a certain earnings
level and no payroll taxes apply to "unearned" income such as capital
gains. For total federal taxes, the top 1% pays about 36% more than
would be determined by its income. The top 10% pays about 24% more.
The second graph and last table show the percent of income in federal
taxes paid by each group. As can be seen, the first four quintiles
pay more in payroll taxes than in income taxes.
Getting back to the article, the author states that the IRS numbers
"nukes the liberal lie that the rich don't pay taxes". I have never
heard anyone seriously argue that the top 1% (or 10% or 20%) of wage
earners pay no taxes. In any case, the article seems to go beyond
this conclusion. It states that the IRS numbers "illustrate a truth
that will startle you: that half of Americans with the highest
incomes pays 96.09% of all income tax". In fact, there is nothing
truly startling about this since this group earns 87.01% of the
income. They are paying just about 10.4% more than they would under
a flat tax based strictly on income. Considering that we have a
progressive tax system and that everyone gets at least a standard
deduction, this is hardly surprising.
The Rush article later states: 'Remember this the next time you hear
the "tax cuts for the rich" business. Understand that the so-called
rich are about the only ones paying taxes anymore.' The fact is,
there is a valid argument that the Bush tax cuts were somewhat tilted
toward the rich. I've posted a graph and tables showing the percent
cut in the effective tax rate provided by the fully-implemented Bush
tax cut at
http://pweb.netcom.com/~rdavis2/bushplan.html . The very
largest tax cut of 33% goes to the lowest-wage workers in the newly
created 10% tax bracket. However, the smallest tax cut of 7.4% goes
to single-filers with a taxable income of $27,050. For couples filing
jointly, the smallest tax cut is 8.8% for taxable incomes of $45,200.
The tax cut then rises gradually to 15.5% for single-filers at
$136,750 and 14.0% for joint-filers at $166,500. It's just as valid
for Republicans to target their tax cuts as it is for Democrats.
However, such targeting should be accompanied by an open, persuasive
argument. The Bush tax cut was not. It was sold as an equitable,
across-the-board tax cut.
Toward the end of the article, the author states:
> Misty tried the old line that all wealth is inherited. Not true.
> John Weicher, as a senior fellow at the Hudson Institute and a
> visiting scholar at the Federal Reserve Bank, wrote in his February
> 13, 1997 Washington Post Op-Ed, "Most of the rich have earned their
> wealth... Looking at the Fortune 400, quite a few even of the very
> richest people came from a standing start, while others inherited
> a small business and turned it into a giant corporation." What's
> happening here is not that "the rich are getting richer and the
> poor are getting poorer." The numbers prove it.
Which numbers prove it? The paragraph above only states that "quite
a few even of the very richest people came from a standing start,
while others inherited a small business and turned it into a giant
corporation." If the author has numbers, he should state the numbers
and/or provide a source.
On the topic of inheritance, the first graph and table mentioned above
do provide evidence of a related item. There does seem to be a very
strong correlation between high-income wage earners and people who pay
estate and gift taxes. Over 99 percent of estate and gift taxes were
paid by the top quintile of wage earners. Hence, while these numbers
do not indicate how much of any group's wealth is inherited, they do
indicate that the great majority of wealth that is inherited goes to
those who already have high incomes.
The author concludes:
> This story, along with a link to the IRS chart, will stay somewhere
> on the RushLimbaugh.com homepage so everyone can see and find these
> numbers at any time. It's crucial that people get this, so please,
> share it with a friend now!
I would likewise like to post this response on that site but I don't
see anywhere that such responses are allowed. Hence, I'll just post
this on forums that reprint the story. Likewise, feel free to post
this response and/or share it with a friend!