Richest Pay Lowest Taxes

[SHRED]

And we pick up the slack.

:grr:

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As this chart from from Wealth for the Common Good shows, the top 400 taxpayers — who have more wealth than half of all Americans combined — are paying lower taxes than they have in a generation, as their tax responsibilities have slowly collapsed since the New Deal era as working families have been asked to pay more and more:



There have been a handful of proposals by congressional progressives to once again put requiring more sacrifice from the luckiest among us back on the table. The Congressional Progressive Caucus recently unveiled a “People’s Budget” that would boost taxes on the wealthiest Americans, returning them to levels closer to where they were under Ronald Reagan’s first term — hardly socialism.

Yet these proposals have yet to gain steam, and the budget debate in Washington appears to revolve completely around cutting spending for Main Street Americans who’ve already been asked to pay too much during the recession. That’s why there’s a Main Street Movement demanding fair sacrifice and standing up for the great American middle class. Whether it succeeds may determine the fate of most hard-working Americans for a generation to come.

http://thinkprogress.org/2011/04/09/main-street-richest-taxes/


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[WatsonT]

1. I have long favored putting the burden primarily on businesses

which leaves the ability to reward via tax breaks those companies who are A)hiring, B) hiring in the US and C) hiring in the US with decent pay/benefits.

So that those that promote a strong middle class will be relatively tax free. Those that primarily employee low level workers and foreigners will not receive any tax benefits from the feds.


That and a confiscatory estate tax beyond some amount (a few million maybe).

I don't see the wealthy as a problem per se but I do see accumulated wealth over generations as a huge threat to our democracy.

[IndyPragmatist]

5. I disagree about taxing businesses....

I think we should focus much more on personal income taxes to make up the gap. Businesses will just pass the taxes on to consumers anyways.

By placing the burden on businesses, you are making it more likely they will move to another country where the tax rate is lower. With technology today, it's very easy to do business thousands of miles away from you primary customer base. There are numerous examples of major companies shifting revenue to other nations (Google for example) just to avoid or corporate tax rate (which is near the top of the modern world). We need to make conditions favorable for business in our country so they can hire more American workers. The burden of taxes needs to come at the end of commerce, so from personal income and sales taxes.

It seems that many people want more services, but only if the wealthy pay for them. That won't work because the wealthy have the ability to avoid taxes much more than the middle and lower classes. I hear the phrase "shared sacrifice" thrown around quite a bit in political discussions, but often, those who are pushing for shared sacrifice don't want to share in anything. Instead, their "shared sacrifice" means taxing the wealthy so I can have more for myself. That won't work. That's called greed. And greed will kill our economy, whether it is from the top 1% or the middle class that has been convinced there is a "war on the middle class" by the media.

[dkf]

2. This analysis in 2005 shows effective tax rates of the top 1% at 31% and the middle

Quintile at 14%.

The top 400 are probably all hedged managers using cap gains loopholes to escape taxes.

http://www.cbo.gov/ftpdocs/88xx/doc8885/12-11-HistoricalTaxRates.pdf

[hobbit709]

3. water is wet and fire is hot.

[dkf]

4. Politifact says the effective rate for the top 1% in 1980 was 22%

In 1980, the effective individual income tax rate for the top 1 percent of earners was 22.3 percent. In 1989, that rate dropped to 19.9 percent. That's a decrease of 2.4 percentage points, which works out to an 11 percent drop. That's sizable, but nowhere near 50 percent.
If you widen the field and consider the top 10 percent of earners, instead of just the top 1 percent,   the drop in effective individual income tax rate was about the same, just over 10 percent.

http://www.politifact.com/truth-o-meter/statements/2009/oct/06/michael-moore/michael-moore-claims-during-reagan-years-richest-h/

[Southerner]

6. One thing not addressed in the first post...

...is just how much actual revenue would be generated by returning the tax rate on our wealthiest 400 taxpayers to pre-Reagan levels. The thinkprogress link won't load for me but maybe it says it there. I'm guessing it would be a very small fraction of the $1.3 trillion or so in deficit spending per year we are seeing now at the federal level.

It's interesting how every source on the internet seems to post slightly different numbers for tax rates when that should simply be historical record. Here's another link that disagress somewhat with other links provided here:

http://www.taxfoundation.org/news/show/250.html (See Table 8 - tax rates after deductions factored in I think)

They do all seem to agree on one thing though: The tax rates on the higher income earners have certainly gone down significantly over the last 30 years and our higher income earners have gotten much higher incomes.

If you check out Table 6 in the above link, it shows what share of the total income tax was paid by each group. It says in 1980 the upper 1% paid 19% of the total income taxes collected. In 2008, they paid 38% of the total income taxes collected - a much larger portion than they once did. The total share paid by the bottom 50% went from 7% down to 2.7% in that same period.

So, I would say the phrase "and we pick up the slack" just simply isn't true at least as far as income tax only is concerned.

I think threads on how we can fight to get higher wages for workers are more useful. First off, let's do like many other countries and raise tariffs greatly to encourage more manufacturing be done right here on our own soil. Free trade be damned. It's done nothing but bleed our workers wages away.