Tax Cuts For The Rich!

[GrnNatlFan]

Great read.




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.

We also know from income mobility data that a very large percentage in the top 1% are "new rich," not inheritors of fortunes. There is rapid turnover in the ranks of the highest income earners, so much so that people who started in the top 1% of income in the 1980s and 1990s suffered the largest declines in earnings of any income group over the subsequent decade, according to Treasury Department studies of actual tax returns. It's hard to stay king of the hill in America for long.

The most amazing part of this story is the leap in the number of Americans who declared adjusted gross income of more than $1 million from 2003 to 2006. The ranks of U.S. millionaires nearly doubled to 354,000 from 181,000 in a mere three years after the tax cuts.

This is precisely what supply-siders predicted would happen with lower tax rates on capital gains, dividends and income. The economy and earnings would grow faster, which they did; investors would declare more capital gains and companies would pay out more dividends, which they did; the rich would invest less in tax shelters at lower tax rates, so their tax payments would rise, which did happen.

The idea that this has been a giveaway to the rich is a figment of the left's imagination. Taxes paid by millionaire households more than doubled to $274 billion in 2006 from $136 billion in 2003. No President has ever plied more money from the rich than George W. Bush did with his 2003 tax cuts. These tax payments from the rich explain the very rapid reduction in the budget deficit to 1.9% of GDP in 2006 from 3.5% in 2003.

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.

The way to soak the rich is with low tax rates, and last week's IRS data provide more powerful validation of that proposition.

[NM Tom]

The top 50% of earners pay 97% of the taxes, but the left wants them to pay more. Maybe we should ALL pay the same amount...say around 20% on EVERYBODY. But I suppose that would be too fair and then the left could not complain about the rich not paying their fair share.

[IEATV8S]

F'N RICH, where do they get the BALLS to pay 97% of our tax burden!

Those greedy bastards, I want the POOR to RAISE their TAX RATE!!!!

The RICH can't do that to the POOR!!!! 97% how dare they do that!!!!

[V8Assassin]

It wouldn't be possible for everyone to pay the same amount. While I agree that would be the only right thing to do, it would take away another form of welfare, tax rebates. Too many people who pay little or nothing in depend on huge refunds every year to further their wasteful habits.

How much, I wonder what the left thinks is a fair amount for us to pay. Speaking personally, it makes it very hard to decide to put more money to work when the risk is outweighed by taxes. The one that really grinds my axe is the death tax. It's not enough that we work all of our lives, pay our taxes, and manage to accumulate something in between, when we die we can't even leave it to our children without fear of the goverment scooping up half of it. It really boggles my mind to think about.

Well, I suppose one thing we don't have to worry about in this thread is too many dems jumping in. They hate facts, and it doesn't get more factual than IRS data.

[SGRIM]

I will not say which bracket I am in but I am getting "screwed" with no lube

Why is it fair for me to bust my hump 24/7 to make money to try to take care of my family for the future etc and half of every damn thing I make goes to taxes....

I don't mind paying my fair share, it is in the bible. I don't mind paying for infastructure, police, military, etc... I don't want my money going to others to sit on their azzes all day and collect a freaking check

[Gothmog]

This is all distortion. Just look at the results of Bush tax policy. The tax burden has been shifted to the middle class-the Up to $250k a year crowd. They are paying the taxes.
The top 1/10 of 1% have become fabulously wealthy under Bush tax structure....by design

[G. Price]

Originally Posted by Gothmog

This is all distortion. Just look at the results of Bush tax policy. The tax burden has been shifted to the middle class-the Up to $250k a year crowd. They are paying the taxes.
The top 1/10 of 1% have become fabulously wealthy under Bush tax structure....by design

You go Goth !!! Don't let facts get in the way of your political hatred.

[V8Assassin]

Render unto Ceaser what is Ceaser's.

I am paraphrasing, but that is the jist of what the Bible teaches us about taxes. I don't mind paying my fair share either, the problem is the fair share is getting out of control. I have been blessed in many ways in my life, health, family, money, but at the same time why should I have to pay an unfair amount for those that have thrown their blessings away. I see it everyday and for most of what I see, poverty is a choice. Sure they never woke up and decided, I want to be poor, they just woke up and decided other things such as laziness, drugs, or alcohol were more important.

Hey goth, guess what, that same top 1% will continue to profit under Nobama as well, or anybody else that makes it to the white house. It's a simple fact, in a free country run by capitalism there will always be rich and poor. Not sure if you noticed, but even under socialism and communism, one group will emerge as wealthy. If it gets too bad, they will simply take their wealth and move somewhere it is better for them.

Just curious goth, but have you ever had to actually give up half your paycheck? If so how did it make you feel?

[UNGN]

Originally Posted by Gothmog

This is all distortion. Just look at the results of Bush tax policy. The tax burden has been shifted to the middle class-the Up to $250k a year crowd. They are paying the taxes.
The top 1/10 of 1% have become fabulously wealthy under Bush tax structure....by design

The to 1/10 of 1% by definition were already "fabulously wealthy".

No Bush required.

I can name hundreds of 1/10 of 1% people that got "fabulously wealthy" under the "Clinton tax structure", but I can't think of too many under the "Bush tax structure".

Maybe YOU can name me some (besides Bill Clinton and Al Gore).

[V8Assassin]

Originally Posted by UNGN

The to 1/10 of 1% by definition were already "fabulously wealthy".

No Bush required.

I can name hundreds of 1/10 of 1% people that got "fabulously wealthy" under the "Clinton tax structure", but I can't think of too many under the "Bush tax structure".

Maybe YOU can name me some (besides Bill Clinton and Al Gore).

Very good point!!!!

[Weester]

Originally Posted by Gothmog

This is all distortion. Just look at the results of Bush tax policy. The tax burden has been shifted to the middle class-the Up to $250k a year crowd. They are paying the taxes.
The top 1/10 of 1% have become fabulously wealthy under Bush tax structure....by design

A whole one tenth of one percent???????? How many people are you talking about???

[V8Assassin]

Rich Liberals, That's Who!

A legislative proposal that was once on the fast track is suddenly dead. The Senate will not consider a plan to extract billions in extra taxes from megamillionaire hedge fund managers.

The decision by Senate majority leader Harry Reid, the Nevada Democrat, surprised many Washington insiders, who saw the plan as appealing to the spirit of class warfare that infuses the Democratic party. Liberal disappointment in Mr Reid was palpable at media outlets such as USA Today, where an editorial chastised: "The Democrats, who control Congress and claim to represent the middle and lower classes, ought to be embarrassed."

Far from embarrassing, this episode may reflect a dawning Democratic awareness of whom they really represent. For the demographic reality is that, in America, the Democratic party is the new "party of the rich". More and more Democrats represent areas with a high concentration of wealthy households. Using Internal Revenue Service data, the Heritage Foundation identified two categories of taxpayers - single filers with incomes of more than $100,000 and married filers with incomes of more than $200,000 - and combined them to discern where the wealthiest Americans live and who represents them.

Democrats now control the majority of the nation's wealthiest congressional jurisdictions. More than half of the wealthiest households are concentrated in the 18 states where Democrats control both Senate seats.

This new political demography holds true in the House of Representatives, where the leadership of each party hails from different worlds. Nancy Pelosi, Democratic leader of the House of Representatives, represents one of America's wealthiest regions. Her San Francisco district has more than 43,700 high-end households. Fewer than 7,000 households in the western Ohio district of House Republican leader John Boehner enjoy this level of affluence.

The next rung of House leadership shows the same pattern. Democratic majority leader Steny Hoyer's district is home to the booming suburban communities between Washington, DC, and Annapolis. It boasts almost 19,000 wealthy households and a median income topping $62,000. Mr Hoyer's counterpart, minority whip Roy Blunt, hails from a rural Missouri district that has only 5,200 wealthy households and whose median income is only $33,000.

Income disparity - to use the class warrior's favourite term - is greatest among the districts of lawmakers that lead each party's campaign arm. Maryland senator Chris Van Hollen chairs the Democratic congressional campaign committee. With more than 36,000 prosperous households and a median income of nearly $70,000, his suburban Washington district even out-sparkles Ms Pelosi's. In contrast, fewer than 5,000 such wealthy households are found in the largely rural district of his Republican counterpart, Tom Cole from Oklahoma. The median income there is only $35,500.

Democratic politicians prosper in areas of concentrated wealth even in staunchly Republican states such as Georgia, Kansas and Utah. Liberal congressman John Lewis represents more than 27,500 high-income households in his Atlanta district. The trend achieves perfect symmetry in Iowa. There, the three wealthiest districts send Democrats to Washington; the two poorest are safe Republican seats.

Soon this new political demographic may give traditional purveyors of class warfare the yips. To comply with new budget rules, liberal Democrats on Capitol Hill are readying a tax increase of at least $1,000bn over the next decade. Ms Pelosi says she wants to extract all of this from "the wealthy". When has a party ever championed a policy that would inflict so much pain on its own constituency? At what point will affluent Democrats crack and mount a Blue State tax rebellion?

Will we see the emergence of a real-life Howard Beale, the television anchorman played by Peter Finch in the movie Network ? Beale was disgusted with America's deteriorating 1970s economy and culture. One night he snapped and implored viewers to get out of their chairs. "Go to the window, open it, and stick your head out and yell: 'I'm mad as hell and I'm not going to take this any more!' "

Or will Democratic voters follow a different cinematic lead, that of the fraternity pledge in Animal House? Perhaps they will accept these tax rises as a political and economic hazing and greet each new tax hike with: "Thank you, sir. May I have another?"

Michael Franc is vice president of government relations for The Heritage Foundation (heritage.org).

[henschman]

whatever kind of tax policy you guys are all for, i think everybody can agree that it is ridiculously stupid to have a tax that is so complicated, it requires $156 billion every year in compliance costs (the 2005 number) -- money that is a complete and total economic waste, and goes to people like CPAs and tax attorneys that would, in a more efficient system, be employed with jobs that actually create wealth and economic benefits for our economy.

Another thing i think really needs to be changed is the withholding system. the IRS takes your taxes out of your check before you even see the money. people don't tend to miss it as much this way, and most don't even realize how much of their wages are taken. If you just had to cut the government a check every year for what you owe, you might be a little more reluctant to support more government programs and spending! A national sales tax would have this same effect, as well -- you would see how much everything you buy costs both before and after taxes, and would be acutely aware of how much money the feds are taking from you. A system where all of the taxpaying public realizes how much they are actually paying would be a good first step toward actually getting some support for a policy of reducing the size of government.

If we are going to go to another system, i would like something that comports with equal protection under the law. the current system is a product of the majority abusing the rights of the minority -- lower and middle class people, who make up the majority of the population, have saddled the rich with most of their tax burden. It is evident from the blatant pandering of politicians that this is exactly what is going on... they always talk about giving tax relief to the middle class (the majority) and raising taxes on or continuing to hose the rich. i would prefer a more simple system where people can't externalize their tax liability like this. another good reason to have a more simple system is that the feds couldn't create all these false/artificial economic incentives by giving tax breaks for certain activities that they have no constitutional business regulating. this is why we have all the myriad loopholes and exceptions that make the tax code so incomprehensibly complicated. whatever we do, we definitely need to move toward a more simple and easy to understand system.

[SGRIM]

I have been listening to Bortz a little. Did a little studying on the "Fair Tax." It would really simplify things......

[Gothmog]

Originally Posted by G. Price

You go Goth !!! Don't let facts get in the way of your political hatred.

The rich pay taxes, you got that right, but why are they paying MORE taxes?

They're making MORE money than ever before....

As far as the facts, you need only look at the concentration of wealth in this country, every year more and more of the wealth gets concentrated on a smaller and smaller minority....but that's cause they work hard and everyone else is lazy right?

[SGRIM]

I would like to know what everyone considers "wealth?" Family and a roof are a given...

[The Blob]

Originally Posted by Gothmog

The rich pay taxes, you got that right, but why are they paying MORE taxes?

They're making MORE money than ever before....

Sorry Goth, read the article... they're one step ahead of you

Aha, we are told: The rich paid more taxes because they made a great