Taxes

Thanks Uncle Pennybags!

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who pays

From The American, the magazine of the American Enterprise Institute and incubating tank for Administration officials (see former and current editors), some handy stats on taxes:

The wealthiest 1 percent of the population earn 19 percent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes. These are proportions of the income tax alone and don't include payroll taxes for Social Security and Medicare.­­

And a short history of tax cuts and their impact on the percentage paid by the rich:

In the early 1960s, the highest marginal income tax rate was a stunning 91 percent. That top rate fell to 70 percent after the Kennedy-Johnson tax cuts and remained there until 1981. Then Ronald Reagan slashed it to 50 percent and ultimately to 28 percent after the 1986 Tax Reform Act. Although the federal tax rate fell by more than half, total tax receipts in the 1980s doubled from $517 billion in 1981 to $1,030 billion in 1990. The top tax rate rose slightly under George H. W. Bush and then moved to 39.6 percent under Bill Clinton. But under George W. Bush it fell again to 35 percent. So what's striking is that, even as tax rates have fallen by half over the past quarter-century, taxes paid by the wealthy have increased. Lower tax rates have made the tax system more progressive, not less so. In 1980, for example, the top 5 percent of income earners paid only 37 percent of all income taxes. Today, the top 1 percent pay that proportion, and the top 5 percent pay a whopping 57 percent. (emphasis added)

In related news, Harvard will start offering more financial aid to families earning up to $180,000 a year.

NEXT: Not in Your Front Yard!

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  1. $180,000 is the new $60,000.

    FWIW, I make $100K+. When I was a young pup, I thought that was all the money in the world. Now, not so much.

  2. Hey now, don’t you know that Krugman says that we can’t be SURE that Reagan’s tax cuts were responsible for the rise in receipts.

    The macro picture is far, far too complex, St. Krugman will tell us, to isolate one input – like a tax cut – and label it the cause of an output – like increased tax revenues.

    This economic causality skepticism rule, of course, does not apply to situations where St. Krugman wants to declare an economic cause and effect relationship. It applies principally to the Reagan tax cuts.

  3. Do they have a similar chart somewhere that includes payroll taxes?

  4. x,y —

    Boy do I hear you. People who make what I make now are supposed to be RICH! What happened?

  5. Gee, it would have been nice of those nonpartisan folks at AEI had included SS and Medicare tax in their caculations, since lower-income Americans pay more in SS and Medicare than in income tax.

    It would also have been nice if AEI had used constant dollars in calculating the increase in tax revenues from 1981 to 1990. Then instead of doubling, we’d see that the increase was from $1,077 billion to $1,309 billion, using 2000 dollars.

    And it also would have been nice if AEI had thought a little harder about causality before making the statement “Lower tax rates have made the tax system more progressive, not less so,” since it’s the ever-increasing wealth of the rich that causes the amount of money they pay in income tax to increase, an increase due to the fact that, for some mysterious reason, an ever-increasing share of the nation’s economic growth ends up in the hands of the rich. It’s almost as if the many were working for the few!

    Oh, and it also would have been nice if Katie M-W had done more than simply regurgitate right-wing propaganda. But, hey, it’s an imperfect world.

  6. To be fair, those are income tax numbers. Do you have any numbers for payroll taxes factoring for the fact that the employee’s paying for both halves of those taxes. Also it’d be good to know what the numbers are for the other types of taxes.

  7. Gee, it would have been nice of those nonpartisan folks at AEI had included SS and Medicare tax in their caculations, since lower-income Americans pay more in SS and Medicare than in income tax.

    They also get more back from those programs.

    And if the SS and Medicare systems are causing an unfair burden on low-income earners, the solution isn’t to raise income taxes for the rich, is it?

  8. KM-W,

    You scooped Ezra Klein*, or beat him to the punch anyway! Thanks to Fluffy you can skip the wait. He has written exactly what the Leftists are going to say about this.

    *Seems his ‘blog has moved to the prospect.

    AV,

    Gee, it would have been nice of those nonpartisan folks at AEI had included SS and Medicare tax in their caculations, since lower-income Americans pay more in SS and Medicare than in income tax.

    Don’t forget to subtract that so-called ‘earned income tax credit’ from your notion.

  9. Also it’d be good to know what the numbers are for the other types of taxes.

    I second that. I’m particularly interested in consumption taxes – both direct (sales taxes) and indirect (embedded taxes in product prices). I expect those to balance the chart somewhat.

  10. Alan,

    Unfortunately, you miss the point that government redistributes wealth and it’s through government that most of the wealth is redistributed to the wealthy rather than the liberal paradigm of redistributing to the poor.

    Some kinds of taxes are worse than others. The payroll taxes are an example of regressive taxes. But it’s government spending that does the most damage. That’s where the elites of society are in control and spending your money for their own benefit.

  11. It’s almost as if the many were working for the few!

    Or the one! We’re all working for Spock, that green-blooded bastard!

  12. AV,

    an increase due to the fact that, for some mysterious reason, an ever-increasing share of the nation’s economic growth ends up in the hands of the rich number of people of modest means join the ranks of the rich annually.

    There ya go, fixed that for you.

  13. To many people forget one major fact of life:The wealthy can manipulate the government better than anyone else!

    When the nominal tax rates began to climb, the very wealthy began a campaign to insert loophole after loophole into the tax code under the guise of empowering the state to alter behavior with “targeted” tax cuts. This process continued from the end of WWII to 1980 and reached the point in the 70’s where Malcom Forbs, then the worlds wealthiest human, paid zero income tax for three years.

    The very wealthy do not mind high tax rates anywhere near as much as the moderately wealthy. The insane tax code of the 70’s hit the self-made millionaires, people who for the most part worked their way up with their own small businesses, the hardest. They made enough money to be subject to high tax rates but did not have enough income and flexibility to benefit from the loopholes.

    It was those people who drove the Reagan revolution and not the super wealthy who ended up paying more taxes after Reagan was done with them.

    Yet, you can still read people claiming that “the rich should pay more” even though history is clear that all attempts to force them to do so always fail to the determent of those lower down on the economic ladder.

  14. SL,

    The wealthy can manipulate the government better than anyone else!

    Are you trying to say that places like Chicago, Louisana, DC and back-in-the-day Texas are/were full of multiple-voting, fiscal liberals?

  15. Alan Vanneman,

    Gee, it would have been nice of those nonpartisan folks at AEI had included SS and Medicare tax in their caculations,…

    Well, that could be because payroll “taxes” aren’t really taxes but rather contributions to a compulsory government pension system. After all, aren’t we all told we will get all the money we put in the social security system back when we retire.

    I always love this switch. When people want to prevent private retirement saving programs, they portray Social Security as a safe, robust pension program we would be insane to abandon. When they want to complain about the tax burden, Social Security is a cruel regressive tax levied on those who work the hardest.

    Which is it?

  16. I’m not saying the bottom 50% are a bunch of freeloaders, but that doesn’t mean they aren’t.

  17. It’s always great when you can isolate number like this. I noticed there are a few things that aren’t included.

    1. In the discussion of tax rates coming down for rich people they fail to talk about how most super rich folks used to AVOID paying much of the taxes ate the various rates (like the ‘shocking’ 91 percent) by propping up failing business tax shelters and other neat accounting tricks

    2. How much money do the businesses of the super rich make from government contracts? In other words, how much of MY tax money ultimately goes to them through the process of providing services at inflated costs by way of secretly brokered contracts?

    3. If taxes in America are so bad for the super rich, how come they’re still rich?

  18. I think the statistics above were taken from tax receipts, which would mean these percentages were derived after whatever loopholes and shelters.

  19. In the discussion of tax rates coming down for rich people they fail to talk about how most super rich folks used to AVOID paying much of the taxes ate the various rates (like the ‘shocking’ 91 percent) by propping up failing business tax shelters and other neat accounting tricks

    Uh… That is the whole point of the article: Lower the tax rates and more income will appear.

    People would rather have two-thirds of a loaf in their pocket than a whole loaf in a shelter. But they would rather have a whole loaf in a shelter than one-tenth of a loaf in their pocket.

  20. madpad,

    How much money do the businesses of the super rich make from government contracts?

    Not much. Most (IIRC 90%) of government spending goes to redistribution and to salaries for government employees. The amount of spending that goes to private contacts is vanishingly small and the profit even smaller. Corporate welfare is a much bigger contributor to the super wealthy than contracts.

    If taxes in America are so bad for the super rich, how come they’re still rich?

    Rich is a relative measure just like poverty, There will always be rich and poor people regardless of any policy or condition of any kind.

    More importantly, the question isn’t whether the taxes are good or bad for the wealthy but whether a policy of high tax rates is good for the country collectively.

    The primitive emotional need to pull other down to ones own level leads to self-destructive tax policies. People driven by an emotional need to attack the wealthy never succeed in creating a tax system that benefits all because the wealthy can better manipulate the concentration of political power that such attempts create.

  21. Wow, it feels like 2001 all over again in here!

  22. “If taxes in America are so bad for the super rich, how come they’re still rich?”

    I suppose it’s hard to quantify lost opportunities, regardless, who said any one individual or class of individuals exists for the benefit of society?

  23. MikeP…I wasn’t justifying it…merely pointing it out.

    Ken, the article states that 91 percent was the marginal rate at the time…not the actual taxes received.

  24. Wow, rarely does a poster just beat the living snot out of other posters the way Shannon Love does on this thread. I wannted to comment on this thread, but there is nothing intelligent to say about the subject that she hasn’t already said. My complements.

  25. Shannon, I was mainly jabbing at the one-sidedness of the article and not getting on any “rich are bad” trip.

    Still, doesn’t this, at some level, make the case for the rich to encourage and want a more robust middle class which would alleviate some of this burden from them?

  26. Let’s see here . . .

    According to the Leftist flood of patriotic tax payers that has arrived on this thread, I would at least be in the “rich” category. When you jokers are sending in checks to the IRS for the amount they are being undercharged, then come back and convince me that I should do the same.

    Also, when you find a defense contractor that will donate all of its production to the government, let us join together to help them fill out the mountains of paperwork required to compete for a contract and coach them on the competitive bidding process (being able to deliver counts). You know, some firm that has competitors in it’s field, not a bona-fide sole-source candidate.

    When we are done with all of that, the last item on the list of discussion shall be: why does the government need all of my income and not yours?

    Oh, manpad, perhaps you should consult the DFAR and FAR to see the maximum allowable charges over expenses for these evil government contractors? Hint: most of it goes to the salaries of the workers and overhead.

    Thank you,
    Montag
    Unabashed Defense Contracting American AND Reserve Officer, the perfect meld of the ‘defense industrial complex’ in one body. I love my employer so much they are in my 401K!

  27. Good for you, Guy. It’s always good to get input from someone without an agenda or an ax to grind.

  28. “Ken, the article states that 91 percent was the marginal rate at the time…not the actual taxes received.”

    It says the upper 1% pays 37% of the taxes.

  29. Alan Vanneman | December 11, 2007, 12:47pm

    Gee, it would have been nice…

    It’s all propaganda all the time, Alan.
    But you know that.

  30. …after loopholes and shelters, unless I’m mistaken?

  31. manpad,

    You are not under the impression that my current occupation was tossed at me by some watery tart or something, do you?

  32. “The amount of spending that goes to private contacts is vanishingly small and the profit even smaller. Corporate welfare is a much bigger contributor to the super wealthy than contracts.”

    Corporate welfare seldom takes the form of direct payments from the government to any particular entity.

    Instead, the transfer of wealth is typically acheived through regulations that restrict competition or manipulate prices. (For instance, the sugar lobby doesn’t need to collect tax dollars… they just charge everyone inflated prices because of the enormous tariffs they government has placed on imported sugar.)

    End result… huge transfer of wealth from consumers to corporations, courtesy of regulations, not taxes.

  33. er, are you?

  34. 3. If taxes in America are so bad for the super rich, how come they’re still rich?

    This is the intellectual equivalent of “If god is omnipotent, can he make a burrito so big that even he can’t eat it?”

  35. “it’s the ever-increasing wealth of the rich that causes the amount of money they pay in income tax to increase, an increase due to the fact that, for some mysterious reason, an ever-increasing share of the nation’s economic growth ends up in the hands of the rich. It’s almost as if the many were working for the few!”

    The “nation” doesn’t have or own any economic growth. Economic growth is created in millions of discrete pieces by people engaging in productive activities. The wealth resulting from that activity “ends up” in the hands of those it rightfully belongs to – the one’s who created it via their own activities and contractual arrangements.

    Neither wealth or income is a “service” provided by government to anybody and it is not a legitimate measure of determining how much taxes anyone should be paying to the government.

  36. “This is the intellectual equivalent of “If god is omnipotent, can he make a burrito so big that even he can’t eat it?”

    I’m with you but that’s just the begining.

    Since when is the argument that “it benefits most of us” sufficient to justify exploitation?

  37. Seems intellectually inconsistent for them to exclude social security and medicare. Don’t they include those when they want to make the point of how large our collective federal tax burden is?

    Surely everyone here realizes the segregation of the social security fund from the general fund as the fiction it is?

  38. A chart that counted payroll taxes, sales taxes and property taxes would show the bottom half paying more.

  39. The real problem I see here, is not necessarily the progressivity of the tax, but 1. How high the tax rates actually are, and 2. The perverse incentive for someone to stay in the bottom 50% rather than jump into the higher category.

  40. “Seems intellectually inconsistent for them to exclude social security and medicare. Don’t they include those when they want to make the point of how large our collective federal tax burden is?”

    Since those programs come out of the general fund and the wealthy are unlikely to recoup what they pay in, my knee-jerk reaction is no, it isn’t intellectually inconsistent for them to exclude Social Security and Medicare.

    You think the wealthy wouldn’t opt out of those programs if they could?

    You’re not one of those “lock box” people, are you?

  41. Dave T,

    In reality, there is no such perverse incentive. If you’re making $50,000 a year and it’s taxed at 20%, you’re not going to refuse a $10,000 raise just because the extra $10,000 is going to be taxed at a 25% rate.

  42. A question. How rich is “super-rich”? Is it the upper 1% of income? And how much is that? $200,000 a year? A million?

    When I hear super-rich, I think billionairre. A tiny tiny fraction of the population.

  43. You’re not one of those “lock box” people, are you?

    Not sure what that means. But as to “recouping what you pay in,” that entire concept is a fiction. In the real world, social security is not a retirement fund, it’s a transfer payment from the younger to the older. By your logic, the portion of my taxes that go to sugar price supports should be excluded from the analysis because I am unlikely to recoup what I pay in.

    Further, I’d argue that EVERYBODY is unlikely to recoup what they’re paying into Social Security. That doesn’t mean we’re not paying.

  44. When the nominal tax rates began to climb, the very wealthy began a campaign to insert loophole after loophole into the tax code under the guise of empowering the state to alter behavior with “targeted” tax cuts.

    Now Shannon, you know that every such tax code change was designed specifically to help the poor. It said so right on the label!

    Quibble: As I remember, most of the behavior modification changes were supported by special interest groups like MADD, not the wealthy. The wealthy supported “investment improvement” changes.

    If taxes in America are so bad for the super rich, how come they’re still rich?

    Are you saying that the purpose of taxation is to impoverish the poor? See: Goose::Golden egg.

  45. I think you supposed “Libertarians” are all missing the point. The real question you should be asking is, “Why does someone have the right to force me to give them anything for any reason?” Egads! That sounds like… coercion! Which, as we’ve already covered, is a threat to initiate violence.

  46. FTFA, # freaking 3: The number of tax filers who claimed taxable income of more than $1 million increased from approximately 180,000 in 2003 to over 300,000 in 2005. The total taxes paid by these millionaire households rose by about 80 percent in two years, from $132 billion to $236 billion.

    This is the “rich get richer” effect? The number of people who had > $1M almost doubled?

    Number friggin NINE: The middle class (defined as those between the 40th and the 60th percentiles of income) isn’t falling behind or “disappearing.” It is getting richer. The lower income bound for the middle class has risen by about $12,000 (after inflation) since 1967. The upper income bound for the middle class is now roughly $68,000-some $23,000 higher than in 1967. Thus, a family in the 60th percentile has 50 percent more buying power than 30 years ago. To paraphrase John F. Kennedy, this has been a “rising tide” expansion, with most (though not all) boats lifted.

    How about @#$%^& TEN? It’s true that the distribution of taxes is somewhat more equally divided when payroll taxes are accounted for-but the change is surprisingly small. Payroll taxes of 15 percent are charged on the first dollar of income earned by a worker, and most of the tax is capped at an income of just below $100,000. The Tax Policy Center, run by the Urban Institute and the Brookings Institution, recently studied payroll and income taxes paid by each income group. The richest 1 percent pay 27.5 percent of the combined burden, the top 20 percent pay 72 percent, and the bottom 20 percent pay just 0.4 percent. One reason that the disparity in tax shares is so large is that Americans in the bottom quintile who have jobs get reimbursed for some or all of their 15 percent payroll tax through the earned-income tax credit (EITC), a fairly efficient poverty-abatement program.

    RTFA

  47. I also think it would be better to include payroll taxes in the picture. I suspect it would change things a bit, but the basic picture would remain the same. Still, it would be more accurate, and it would head off an easy objection.

    One could argue that payroll taxes aren’t like other taxes because they go to a special fund that is never, ever touched by other programs, but that would be a sign of great naivete.

  48. I always love this switch. When people want to prevent private retirement saving programs, they portray Social Security as a safe, robust pension program we would be insane to abandon. When they want to complain about the tax burden, Social Security is a cruel regressive tax levied on those who work the hardest.

    Yes, but those with views opposite to the ones you described also switch back and forth between whether it’s just one more program or something special that should be considered separate from the rest of the tax burden.

    Me, I’d rather call it what it is: One more program supported by one more tax.

  49. I think you’re missing the proportions here.

    If they’re paying in at 37 times their proportion of the population, whatever the lower 49% are paying into SSA, etc. won’t even come close to bridging that gap.

  50. thoreau,

    See item #10 in the article.

  51. :::Heading off the “off budget people” at the pass:::

    Before anybody talks “off budget” that term actually means “perminant appropriation”, i.e., not an appropriation discussed on an annual basis.

  52. Other taxes aside, one thing this chart makes clear is why it is essentially impossible to ever control federal spending. It’s like an insurance policy where 75% of the people have a 15% co-pay on any new (and old) federal goodies. Of course they’re going to buy far to many federal programs with such skewed incentives.

  53. To me, this graph about income taxes (above the fold) and discussion about payroll taxes, tells me three things:

    1. The rich pay for the military (which they should).

    2. The poor pay for healthcare stuff (which they should).

    and

    3. They ditched JS for KM-W?!?!?!?

  54. Guy,

    Thanks. Not sure why they wouldn’t just include those in the numbers in the first place, as it makes the same point but removes an obvious inconsistency.

  55. “Loop holes” were always methods to coerce capital into certain activities. The carrot-approach of a centrally coerced economy, if you will.

    I notice that the ‘loyal’ Left is not tossing out the examples of wind power and ethenol as “corporate welfare”.

  56. Guy,

    Does every comment here have to be perfectly balanced? Tax loopholes skew both right and left. On this I agree.

  57. Does every comment here have to be perfectly balanced?

    Of course not. But accuracy would be nice. However, I am not your censor and do not wish to be.

  58. Guy Montag-

    I did look at item #10 in the article. It says:

    It’s true that the distribution of taxes is somewhat more equally divided when payroll taxes are accounted for-but the change is surprisingly small.

    If the change is small, so the basic point remains unchanged, then just include payroll taxes. It’s an accurate reflection of the fact that SS and Medicare are just more programs paid for by more taxes. It also reflects the fact that those taxes are not quite as specific to the programs as is claimed (i.e. the money does indeed get sent to other programs, by various accounting gimmicks).

    If the more accurate numbers make basically the same point while heading off an easy objection, why on earth would somebody not use the more accurate numbers?

  59. t,

    I agree that it should have been included in the graph. Was just pointing out that it was addressed in the article and not ignored.

    Plus, you are a level-headed commentor so I pointed it out nice for you (after I did it mean of others) 🙂

  60. So I guess the conclusion is that the parasites out there really are ruining the country?

    …and the little tape worms really do think, for whatever reason, that their hosts aren’t paying their fair share?

  61. Since when is the argument that “it benefits most of us” sufficient to justify exploitation?

    Assuming we’re limiting ourselves to the context of the USA, about 1933.

  62. First of all, I am a little stunned that Erza is a guys name. Second, I don’t care so much about taxes, I do care about ballanced budgets.

  63. When one person pays more for government than another that is a violation of the equal protection clause in the constitution. Every able bodied man or woman should write the same check, or perform government service to make up for it. You want to get government under control, everybody needs to know what it really cocts. I could see voting rates near 100% with a head tax.

  64. Dang me. It’s hard to get in here. I just have one question – and forgive me if it’s on the simple side, but I am a simple man: this can’t include capital gains figures and such, can it? If I’m remembering correctly, those have been taxed at a different rate since 2001 at least. If it does not include that kind of thing, that’s a very real omission from the figures as well. After all, the pay package for more and more employees in the corporate world comes in the form of stock options and the capital gains sold therefrom.

  65. “this can’t include capital gains figures and such, can it? If I’m remembering correctly, those have been taxed at a different rate since 2001 at least.”

    Investment income has also been double taxed for a very long time – once at the corporate level and again at the individual level. So the real tax rate for a stockholder is the individual tax he had to pay on his share of corporate income plus his proportional share of corporate taxes paid divided by his share of that corporate income.

  66. Dang me. It’s hard to get in here. I just have one question – and forgive me if it’s on the simple side, but I am a simple man: this can’t include capital gains figures and such, can it?

    That is covered in the article too.

    BTW, are you the same Jeff Bull who took Chemistry from one Mr. Ed Bridge in high school and then went on to college at Georgia Tech?

  67. I don’t care so much about taxes, I do care about ballanced budgets.

    This is just another part of the problem – spending is orders of magnitude more important than budget balancing. In other words, we’d be much better off with limited spending entirely borrowed, than we would with massive spending funded by equally massive taxation. The waste and corruption occurs in the spending; the financing is but a minor concern comparatively.

  68. I notice that the ‘loyal’ Left is not tossing out the examples of wind power and ethenol as “corporate welfare”.

    But libertarians are. Still, nobody listens.

  69. Every able bodied man or woman should write the same check, or perform government service to make up for it. You want to get government under control, everybody needs to know what it really cocts.

    But this is the whole point of progressive taxation. Are you telling me that if the garbage man down the street paid $5,000 and Bill Gates paid $5,000, they would both have the same sense of “what it really costs?”

  70. this is way over my head. What i see is a lot of folks poor like me and mine that dont appreciate what they do have. We have a little house and 3 usable cars. 4 puters, tv’s. cable etc. We all eat every day several times. decent clothes. Household gross income about 30,000/ year. I reckon if we wanted more better, we would drag up off the couch and do more. That aint no reason for me to bitch about all you rich fellers whats got plenty.

    I think thats what the lower 50% like to whine about. But I know the deal. Mr. Gates and Mr. Buffet are the real reason I can be sedentary. They keep the economy chugging along. I’m good with that.

  71. It isn’t Bill Gates fault that he has succeeded enough to not feel the pain. That doesn’t mean he can’t comprehend what it really costs. The purpose of progressive taxation is to buy the votes of most people who know damn well that they are stealing from people who are more productive than themselves.

  72. Since when is the argument that “it benefits most of us” sufficient to justify exploitation?

    Since democracy was invented.

    this can’t include capital gains figures and such, can it?

    I would imagine so. Capital gains taxes are still income taxes. Its just that a different rate applies.

  73. “The purpose of progressive taxation is to buy the votes of most people who know damn well that they are stealing from people who are more productive than themselves.”

    Yeah, the reason the top 25% pay 85% of those taxes is because that’s the way the other 75% of the people want it to be, I’m sure.

    It’s hard to convince people that all that money could and would be put to productive use, rather than squandered by the government, when so many imagine the government squandering it on them. …and to some extent it does.

    …I suppose it’s human nature to try to rationalize what we do. People talk themselves into thinking that they deserve what they take or that the people they took it from owe them something. …but I hear people talk about the wealthy keeping their money as if it were stealing.

    “The insane tax code of the 70’s hit the self-made millionaires, people who for the most part worked their way up with their own small businesses, the hardest.”

    There is that line. Maybe this is really subjective, maybe it would always seem this way, but it seems like the spot where your business really starts to scale nicely is exactly the point where the progressive slope gets steep and slippery.

  74. Since democracy was invented.

    So we’ve got that one and someone above said 1933.

    I’m sure others have noticed that those who advocate redistribution of wealth schemes, under whatever banner, are often the same people who are quick to decry historical embarrassments like slavery and what we did to native Americans.

    …obviously I’m ashamed of those things too–despite the fact that what we did benefited an awful lot of people. Flip flopping on whether it’s okay to exploit people based on whatever criteria tells me something about a person’s personal preferences. Me? I’m against exploitation across the board.

    I think we short ourselves by not attacking these things from a moral angle.

  75. I’m impressed the AEI correctly labled the EITC as an efficient poverty-abatement program. Now, I don’t like the idea of the EITC people getting “tax refunds”, which makes it sound like they are regular tax-paying citizens when they largely are not. It’s a direct welfare payment, and I wish it was labeled as such.

    But all in all, giving people a straight-up check rather than “services” is a cost-effective way of handling poverty. At least the American-style poverty we have here, which really isn’t all that povertyish.

    The EITC increase in the ’90s was one of the better Clinton ideas. It cemented a lot of folks as permanent Democrats, but it beat the hell out of increasing welfare services.

  76. x,y

    FWIW, I make $100K+. When I was a young pup, I thought that was all the money in the world. Now, not so much.

    I’ll trade you my money for yours.

  77. A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.

    – Alexander Tytler

  78. What i see is a lot of folks poor like me and mine that dont appreciate what they do have. We have a little house and 3 usable cars. 4 puters, tv’s. cable etc. We all eat every day several times. decent clothes. Household gross income about 30,000/ year.

    Just out of curiosity, are any of those things actually paid for? Or is it stuff that you are buying on credit? If it is the latter, will any of it still be worth anything by the time it’s paid for? And with the interest taken into account how much will the final price be? How much of it will be sold or traded in for replacements before it’s paid for? Replacements that will likely be of less quality and higher priced and also bought on credit. I would suggest that unless your possessions have been completely paid for, your self-professed modest amount of wealth is even more modest than you think.

  79. Mr.SOB,
    The house and 1 car are on a note. The rest is free and clear. My point was that even with a modest income we are able to be comfortable and are content with what we have. We also acknowledge that our economic situation is a result of many choices we made over many years. Some good, some not so good. This is still America and hard work is still rewarded. Some would see us as failures but I feel no great obligation to society and try not to be a burden on society.

    It is ok to be lazy, just don’t expect much in return.

  80. Boy do I hear you. People who make what I make now are supposed to be RICH! What happened?

    You are rich fuck nut.

  81. corning, since rich and poor are relative, you have no basis for saying that.

    However you are absolutely, objectively an ignorant asshole.

  82. So what’s striking is that, even as tax rates have fallen by half over the past quarter-century, taxes paid by the wealthy have increased.

    Sounds like we’ve got a little Laffer curve action going on there!

  83. The whole point of graphs like this is to obscure who pays taxes, so it is not surprising that the AEI puts it out, when payroll taxes are added it is a bit of a different story.

  84. I should add that this doesn’t include money made though investment…it is almost propaganda the way it is presented.

  85. The whole point of graphs like this is to obscure who pays taxes, so it is not surprising that the AEI puts it out, when payroll taxes are added it is a bit of a different story.

    Fortunately, as seen at Cato, the Congressional Budget Office has heard your plea (PDF).

    The quintiles pay the following percentages of total federal tax liability: 0.8, 4.1, 9.3, 16.9, and 68.7.

  86. Since the only cohorts that appear on the graph above are the top 10%, 5%, and 1%, here are the numbers that correspond to those blue bars: 54.7%, 43.8%, and 27.6%.

  87. “The quintiles pay the following percentages of total federal tax liability: 0.8, 4.1, 9.3, 16.9, and 68.7.”

    On % of total pretax income of 4.0, 8.5, 13.3, 19.8, and 55.1.

    “..here are the numbers that correspond to those blue bars: 54.7%, 43.8%, and 27.6%.”

    And on total pretax income % of 40.9, 31.1, 18.1.

    So when a progressive says that the rich are not paying their “fair share”, it calls into question what such a person considers a “fair share”.

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