Obama needs to do some more research:
Taxing rich people for political and financial expediency is a bad idea. People shouldn’t be punished for being successful, and the wealthy already pay much of the tax burden, says the Wichita Eagle.
The message of Sens. Barack Obama and Joe Biden is a push-back to the myth that the tax cuts championed by Bush were for the well-off. The nonpartisan National Center for Policy Analysis disputed that idea in a report earlier this year.
“It is politically popular to say that tax cuts benefit the wealthy,” said Michael D. Stroup, a Stephen F. Austin University economist who authored the NCPA report. “The accusation does not match the reality.”
Here are some of the underreported findings:
The top 1 percent of income earners pay more than $1 in every $3 the Internal Revenue Service collects; from 1986 to 2004, the total share of the income tax burden paid by the top 1 percent of earners grew from 25.8 to 36.9 percent, while the total share of the tax burden paid by the bottom half of earners fell from 6.5 to only 3.3 percent.During the same period, the percentage of income the top 1 percent of tax filers paid in federal income taxes rose from 18.3 to 19.6 percent; by contrast, the percentage of income the bottom fifth of tax filers paid in federal income taxes dropped from 0.4 percent to zero.The income share of the top 1 percent rose 7.7 percentage points, from 11.3 to 19 percent, while their income-tax burden rose by 11 points, from 26 to 37 percent.The study is backed up by data from Congress’ Joint Committee on Taxation:
In 2006, 53.7 percent of federal income taxes were paid by those with incomes of more than $200,000. Those earning between $100,000 and $200,000 paid 28.3 percent of individual income taxes.Added up, those with incomes of more than $100,000 paid 82 percent of the total.They also paid 44.4 percent of payroll taxes.America doesn’t need policies that take more money from one group of citizens and give it to another. We need leaders who will cut spending and live within a budget. It’s what most of us do, and we should expect the same of our government, says the Eagle.
Source: Brent Castillo, “Wealthy already pay much of tax burden,” The Wichita Eagle, October 23, 2008.For text:
Also, there is abundant research showing that high tax rates can affect flow-through businesses and entrepreneurs in a number of damaging ways. Taxes have been found to affect the attractiveness of entrepreneurship as compared to working for someone else. A trio of papers by Carroll et al. (1999, 2000 and 2001) found taxes to slow the rate at which entrepreneurs expand operations and to discourage hiring and investment.
In particular, this research found that reducing the tax rate from 39.6 percent to 33.2 percent increased the likelihood of hiring increases by 12 percent, and for those employees, increased median wages 3.2 percent. The research also found that high-income tax rates reduce the investment spending of entrepreneurs and the likelihood that they invest at all. Raising the marginal tax rate by five percentage points was found to reduce the percentage of entrepreneurs who invested by 10.4 percent and lowered their average investment by 9.9 percent. Finally, higher tax rates were found to discourage the growth or expansion of small businesses. A 10-percent increase in the net-of-tax share, defined as one minus a taxpayer’s tax rate, was found to increase business receipts by 8.4 percent.
About 70 million people work for small businesses. These people make up one-third of the entire population of U.S. voters. Those are numbers that can wield incredible influence in any election. Imagine what can happen if somehow small businesses and their employees could unite around a few key reforms. In fact, regardless of polls, any candidate that can make his case in support of small businesses could walk away with the presidency on November 4.
Imagine what might happen if somehow small businesses and their employees could unite around a few key reforms. Specifically, the next president should work to eliminate the alternative minimum tax, lower corporate tax rates from 35% to 25% and eliminate the capital gains tax entirely. Those are the types of policy changes that small business owners and employees will embrace.
To borrow a few lines: “You may think I’m dreaming, but I’m not the only one. I hope some day you’ll join us” — in support of America’s job-creating engine, the women and men in small businesses.
For NCPA study:Did The Bush Tax Cuts Favor The Wealthy