Bloomberg News Svc.: If Tax-Cut Lapsing Is Class Warfare, Let’s Fight

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If Tax-Cut Lapsing Is Class Warfare, Let’s Fight: John M. Berry
Commentary by John M. Berry


March 11 (Bloomberg) -- If letting top income-tax rates go back to where they were in 2000 is class warfare against the rich, I’m ready to snap to attention with my old M1 rifle on my shoulder.

What a ridiculous label, class warfare. It’s hardly aggression against any class to have a progressive income-tax system in which fairness and ability to pay are important considerations in setting rates for different income groups.

As far as the top tax rates are concerned, what President Barack Obama has proposed in his comprehensive, tightly crafted budget is to leave current law unchanged. That’s right: The law already calls for today’s 33 percent rate to go to 36 percent and the 35 percent rate to rise to 39.6 percent, in 2011.

Why did a Republican Congress and President George W. Bush countenance the 2011 expiration dates in the 2001 tax-cut bill? It was one of several deceitful provisions that made rate reductions temporary to hold down estimates of revenue loss. Of course, the GOP intended all along to make the rate cuts permanent.

Obama would let the Bush rate cuts expire only for couples with incomes above $250,000 (above $200,000 for single individuals) and raise the rates for them on capital gains and dividends to 20 percent from 15 percent.

Unfair? I don’t think so, given these earners’ relatively greater ability to bear the added burden. There’s no doubt that a larger share of the nation’s income has become concentrated at the very top of the distribution. .........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_berry&sid=awX18D72uIgM

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1. Jesus, didn't the IRS recently release data showing the wealthiest of the wealthiest

paid 17% of their income in income taxes to Uncle Sam? Jesus, in 2011, that 17% might jump to 18%: this is class warfare indeed. Even before the Gipper slashed the highest marginal rates, those in the top 20% were paying only about 1% more in Federal taxes than the lowest 20% were according to some official statistics released back then. Moreover, the Gipper concomitantly increased payroll taxes substantially, both as to per cent and the base amount, but those who were earning over the SS maximum (was in about $54%,000 back then?) were excused from further payroll taxes, which incidentally are subject to income tax, and the single taxpayer reached the maximum 28% bracket when his taxable income exceeded about $20,000. So that single-taxpayer schmuck, who had just hit the $20,000 taxable income, was sending Uncle Sam over 35% of each marginal dollar earned with a raise whereas the fastly-growing million-dollar-a-year professional athletes, with 7-figure incomes, were sending Uncle Sam only 28% of those extra million raises. To boot, the poor schmuck's payroll taxes have been spent all along on other government programs, such as $640 toilet seats for the military, but much of it has been spent as welfare to the most affluent, courtesy of junior's tax cuts. So indeed, let class warfare commence in earnest. :P