Washington is teeing up “the rich” for a big tax hike next year, as a way to make them “pay their fair share.” Well, the latest IRS data have arrived on who paid what share of income taxes in 2006, and it’s going to be hard for the rich to pay any more than they already do. The data show that the 2003 Bush tax cuts caused what may be the biggest increase in tax payments by the rich in American history.
The nearby chart shows that the top 1% of taxpayers, those who earn above $388,806, paid 40% of all income taxes in 2006, the highest share in at least 40 years. The top 10% in income, those earning more than $108,904, paid 71%. Barack Obama says he’s going to cut taxes for those at the bottom, but that’s also going to be a challenge because Americans with an income below the median paid a record low 2.9% of all income taxes, while the top 50% paid 97.1%. Perhaps he thinks half the country should pay all the taxes to support the other half.
Aha, we are told: The rich paid more taxes because they made a greater share of the money. That is true. The top 1% earned 22% of all reported income. But they also paid a share of taxes not far from double their share of income. In other words, the tax code is already steeply progressive.
[. . .]
This year, thanks to the credit mess and slower growth, taxes paid by the rich may fall and the deficit will rise. (The nonstimulating tax rebates will also hurt the deficit.) Mr. Obama proposes to close this deficit by raising tax rates on the rich to their highest levels since the late 1970s. The very groups like the Congressional Budget Office and Tax Policy Center that wrongly predicted that the 2003 investment tax cuts would cost about $1 trillion in lost revenue are now saying that repealing those tax cuts would gain similar amounts. We’ll wager it’d gain a lot less.
If Mr. Obama does succeed in raising tax rates on the rich, we’d also wager that the rich share of tax payments would fall. The last time tax rates were as high as the Senator wants them — the Carter years — the rich paid only 19% of all income taxes, half of the 40% share they pay today. Why? Because they either worked less, earned less, or they found ways to shelter income from taxes so it was never reported to the IRS as income.
Read the whole thing. Of course, there appears to be no deviation from the Obama campaign’s plan to have its tax policy violate the basic laws of arithmetic and seek to squeeze blood from a turnip.
Daniel Horowitz
Neil Stevens
Steve Maley
Jake Walker
Exactly. Glad they finally wrote this.
KBDay (Diary) Monday, July 21st at 10:26PM EST (link)I’ve argued with so many people about those tax cuts, which I called ‘tax adjustments.’
I’ve also been fairly speechless that people who pay no taxes often get refunds or rebates. I cannot for the life of me figure that out.
I’ve also practically shouted at any politician who will listen that we need a new tax system.
I’ve also written checks to IRS that infuriated me. Those of us who work hard to save for our own retirement, who have never taken a dime from the government, even to educate our children (except for their state academic and private academic scholarships) are completely gouged.
In ‘Audacity of Hope,’ Obama says he will redistribute wealth. I figure the feds are doing a great job of that already.
I also would like for someone to define rich for me. To me, rich means you don’t have to worry about your old age. I’m worrying. I’m not rich.
KB Day/The US Report
“Good judgment seeks balance and progress; lack of it eventually finds imbalance and frustration.” (Eisenhower)
Might we look at the politicians first then?
GRVTStorm (Diary) Monday, July 21st at 10:52PM EST (link)I won’t name specifics, but to start I believe the first rich to be looked at are the politicians:
Diane Feinstein
Barbara Boxer
Harry Ried
Edward Chappaquidic Kennedy
John Kerry
John Edwards
ALGORE
BillandHill
And, let us all look upon the salary of these politicians we Americans are stuck paying them for part time hours worked. Congress pays over $220K
Senate pays over $300K
Then we can go look at the rest of them. I also say they let the voting public vote on their annual pay raises. Congress has authorized themselves 4%-12% pay raises each year for PUBLIC SERVICE they VOLUNTEERED for.
Bring back the days of NElson Rockefeller who held office of Vice President under Gerald Ford for $1.00 per year because he was rich and knew he did not need the money. Very unlike the Kennedy clan, you know, the prohibition smuggling Kennedy’s.
Liberalism is a mental disorder – Michael Savage
wtf
nobob Tuesday, July 22nd at 1:09AM EST (link)where’s waldo in all that mumbojumbo?
There was no talk of the middle class.
Hello?
I do not earn more than “$388,806″
nor do I earn more than “$108,904″
To whom is this post addressed to?
Is this a tacit death knell to the middle class?
Higher tax rates for rich?!
Jubo Tuesday, July 22nd at 6:03AM EST (link)Is it fair to tax individuals with higher incomes with higher tax rate?
So it means that we are taxing direct consequence of education, since more years of eduction means higher income (proven empirically). So this means that in some sense we discourage people to get education…
Fight Pork
ICRJCalvin (Diary) Tuesday, July 22nd at 7:01AM EST (link)Senator Tom Coburn needs your help. . . .
Widow's mite
psmarc93 Tuesday, July 22nd at 6:25PM EST (link)This post is criminally misleading. The “rich” deserve respect for contributing MORE money than the rest of us, but they have more — much more — to give. In fact, the upper 1% has received more than a 35% raise in the past 6 years, but they are paying LESS in percentage of their income than at anytime in American history. So “fair share” is determined not by how much they give, but how much they OWE the very system that made them so wealthy. My tax dollar is a greater percentage of my income than their tax dollar. I’m giving more — may I remind Redstate of the words of Jesus. A widow puts in a mite, less than a penny, into the temple pot and Christ points out that her mite is worth more than all the donations of the rich…
“…And he called unto him his disciples, and said unto them, Verily I say unto you, This poor widow cast in more than all they that are casting into the treasury: for they all did cast in of their superfluity; but she of her want did cast in all that she had, even all her living.”
Restate is saying the widow’s mite is worthless and the rich empty their pocket change and that’s worth more AND that’s fair! Listen to Jesus: It’s not the worth of the mite, but how much that mite is worth to the person who gives it. In short, the rich are not paying their fair share, we in the middle class are paying more, a greater percentage, out of our pockets. Tax everyone fairly.
You're the only misleading thing here psmarc93
stang (Diary) Tuesday, July 22nd at 7:02PM EST (link)Charity is voluntary. That is what is being discussed in your parable.
Taxes are not. They are compelled by government. Not paying taxes is criminal.
So what you are advocating is using government to compell more charity (taxes) from the rich? The only thing misleading here is you. And that’s not criminal, just unfortunate.
You sound like a marxist in lamb’s clothing.
“Fair depends which side of the fence you’re standing on.”
stang
“Whenever the legislators endeavor to take away and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any farther obedience, and are left to the common refuge which God hath provided for all men against force and violence.”
John Locke
to psmarc93
ixoyedeg Tuesday, July 22nd at 11:27PM EST (link)I must say that was an astonishing amount of misunderstanding. The very income tax rate paid by those in the upper class is higher than yours. It is impossible for them to pay less per dollar than you in strict terms of income. In terms of capital gains, they are even, sales tax – even, at least in percentage, but considering they usually buy a ton more than you, and usually more expensive items, which brings into play any potential luxury taxes, which do not effect you, they pay more. They pay similar auto registration fees except they usually have more of them, and in states where the fee is based on sale value of the vehicle, they pay more. The only way that you would pay more than they is indirectly through the price of products, since the rich usually own the businesses, and so they can offset some of their tax burden through the cost of the product, in which case you would be smarter to call for lowering their taxes so YOU would pay less of their taxes in this way.
You say we should tax everyone fairly, which is why some have proposed a flat tax, which means everyone pays the same percentage of their income. That should be fair.
I think that the income tax should be eliminated all together. Eliminate capital gains. Eliminate all taxes on the growth of money in people’s pockets. Instead, institute a flat sales tax, that way, the wealthy who are more extravagant will pay more, but still according to their fair share, but everyone else will pay their fair amount as well.
I speak as one currently making about $10,000 a year.
Income tax is not the only tax
Rusty59 Tuesday, July 22nd at 11:28PM EST (link)I am so sick and tired of people using income tax only statistics and using total taxes instead of tax percentages. Quit ignoring FICA. FICA is huge for the small business man like myself. With my earned income of $110,000 my total effective federal tax rate is 40% — higher than someone making $1,000,000. The million-dollar man pays maybe 34%. If the million is from capital gains the rich man’s rate is much, much lower than mine. The middle class are getting the shaft not the rich.
I will be voting for Chuck Baldwin in the fall.
Rusty, you're not thinking outside the box
ixoyedeg Wednesday, July 23rd at 7:51PM EST (link)because it is not limited to FICA (which BTW I also think should go away). I only mentioned a few, but the number of taxes are unbelievable. However, instead of griping about the greater tax rate you pay over capital gains, try to restructure in a way that more of your income is through capital gains. Then petition your government to lower all taxes, because quite frankly, none of them are fair to anybody, and it all goes to pay for untold millions of things the government should not even be touching.