Rarely has class-warfare rhetoric been so overwrought.
Last week, Senate Majority Leader Harry Reid (D., Nev.) “explained” the GOP’s motive in withdrawing from stalled debt-ceiling negotiations this way:
Why? To protect oil companies. To protect the owners of yachts and corporate jets. To protect corporations that ship jobs overseas. To protect millionaires and billionaires from paying their fair share.
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Sen. Sheldon Whitehouse (D., R.I.) fleshed out this explanation with a few specifics:
When our Republican colleagues talk about defending against tax hikes, they are talking about . . . protecting the top 400 income earners in the country who, on average, pay [18.2 percent in] Federal taxes. . . . These are people who made on average more than a quarter-billion . . . in one year. And God bless them. What a wonderful thing it is to make more than a quarter-billion dollars in one year. But they pay taxes at a lower rate than a truck driver in Rhode Island does on average; the guy who wakes up every morning and gets into his clothes and puts on his boots and gets in the truck and goes out there and works all day, pays the same tax rate as the person earning over a quarter-billion dollars.
Putting it all in sober perspective, Sen. Barbara Boxer (D., Calif.) observed: “This is America. This isn’t pre-revolutionary France, where the king had everything.”
That’s right. Off with their heads!
To highlight the GOP’s intransigence, Reid offered a non-binding resolution. Dubbed the “Sense of the Senate on Shared Sacrifice,” it calls on “those earning $1,000,000 or more per year [to] make a more meaningful contribution to the deficit reduction effort.”
The Hill nailed the real reason Senator Reid interrupted all serious Senate business to debate this meaningless rhetorical exercise in class warfare. “The vote,” the newspaper reported, “will likely be used by Democrats as a way to show Republican resistance to new tax hikes.”
Republicans opposed to tax hikes? Now there’s a breaking news story!
But this is a debate worth having. Let’s review the data.
Our tax code already ranks among the most “progressive” in the industrialized world. While it’s true that the “rich” have been earning a steadily increasing share of all income over the last three decades, they have shouldered a disproportionate share of the overall tax burden. Today the wealthiest 1 percent of American households earn 20 percent of all income — more than twice the share they earned in 1980 and no doubt a class-warfare crime of the first magnitude. But they pay 38 percent of all income taxes, up from the 19 percent they paid in 1980. This, despite Congress’s halving top marginal tax rates since the Carter years.
The lower marginal tax rates that have prevailed since Reagan’s time have resulted in a lower tax burden on not only rich, but also middle- and lower-income Americans. Back in 1981, the bottom half of wage earners paid 7.45 percent of all taxes; today, their share is barely a third of that (2.7 percent).
None of this, of course, comports with the liberal class-warfare narrative.
Liberals take solace from polls that show large majorities of Americans favor increased taxes on “millionaires and billionaires.” An April New York Times/CBS News poll, for example, found that 72 percent of Americans thought households earning over $250,000 a year should pay more taxes to lower the budget deficit.
But consider the context in which Americans hear questions like this. What, exactly, do they think the “rich” pay in taxes today? How many Americans appreciate the truly progressive nature of our current tax system? And, more important, do Americans believe there should be some sort of cap or limit on how much we send to Uncle Sam? If so, what might that limit be?
Americans will tolerate this old normal, as they did for decades, before tax rates were reduced. We will have to, unless we want to roll our grandmothers' wheelchairs off the cliff.
hmmm... perhaps its time for Grandma to have a different plan for retirement given that the current one is unsustainable. Even if you tax the top 10% at a 90% rate, Grandma is still going over the cliff...tsk tsk. How about we put those able-bodied young men and women on welfare to work and redirect that money to grandma. heck the current tax rates should be able to cover that!
" Even if you tax the top 10% at a 90% rate, Grandma is still going over the cliff..."
This is not accurate. The top 10% earners pay cuurently on average about 20% of their income, per the article. Since they pay about 70% of all tax revenues, they pay about 1.5 trillion dollars. If you double their average rate to 40%, then this will generate another 1.5 trillion dollares, enough to cover the current annual deficit.
So you don't have to make them pay 90% to stop grandma from going over the cliff...
On the other hand, the rich people did not make their fortune by being stupid. If you double their income tax rate, they will find ways to pay less.
What's amusing about the "tossing Grandma over the cliff" theatrics is that no-one quite gets that the government could only defenestrate nos cher vieux if the kids and grandkids didn't abandoned their well-being to government.
p.s. the ironical SolveMedia pass-phrase I got for this is "love is blind"....
Here's a "compromise" for you: A bill that says the following--- "Starting today, everyone in America who earns $1 million or more will have their personal income taxes increased by 5%. Also starting today, EVERYone in America, regardless of how little they earn or how many deductions they claim, will pay at least 5% in income taxes. These two provisions are not severable from each other."
I'd go for it. Would the Dems? Would the people who pay ZIP now who answer all these polls about taxing the rich more?
Even 5% of everyone's paycheck would balance the budget pretty quickly. And any raise in personal income taxes on people making millions would only cause them to move income into non-taxable non-personal-income streams.
Funny how so many who pay zip are perfectly fine with taxing others more. Let them put THEIR money where their mouths are for a change, and let's see how that works out.
"Even 5% of everyone's paycheck would balance the budget pretty quickly."
Not really. The 2011 (projected) deficit is more than 10% of 2011 (projected) GDP.
And just as quickly, politicians would raise spending (to buy votes), and we would be back where we started, but with a bigger Federal gummint.
No thanks.
The survey is based upon comparing the taxes paid by the wealthiest. It assumes the wealthiest had the highest income. A wealthy person could have little income in a given year, or have wealth based on a stock portfolio. I would like to see the survey compare the highest incomes verses taxes. After all we are addressing an income tax.
Beware of survey evaluations that compare disassociated metrics. (wealth verses income)
Uh, Craig, the IRS statistics on this calculate the "wealthiest" on the basis of adjusted gross income and the percentage of the number of returns that show what adjusted gross income each person makes. Having previously looked at these IRS statistics, I can tell you that. Therefore, your comment on "metrics" is quite incorrect.
The whole idea of a 'progressive' tax is the corner stone of our woes. Taxes exist because as a society we understand that certain things are required for the functioning of the society, and the idea that the wealthy -- simply because they ARE wealthy --should pay twice, or ten-fold, or a hundred-fold what their fellow citizens pay for the EXACT SAME goods and services is anathema to the idea of a free society. We all receive the benefits of government in equal measure, we should therefore pay for it in equal measure as well. A flat tax, though still unfair, would be a step in the right direction. And if EVERYONE had to pay a flat 10% regardless of their income, the 50% who now pay no Federal income tax would be a lot less prone to vote for these vast entitlement programs. Everyone who earns should have a dog in this hunt, period. To continue otherwise, where one man can vote himself another's treasure, is madness.
I agree, with one exception: All taxes on income would be unified; that is, there would be no FICA, Medicare or other taxes on income. The tax rate would be set at what is needed for the government to pay all its ongoing expenses, including entitlements. Every single person would have something in the game, and every single person could just look at their tax rate... 10, 15, 20%... and say clearly: this is what goverment cost me and mine this year. Was it worth it to us?
Michael Franc's piece is perfectly correct, but I doubt that we'll get very far with the typical, easily misled and confused voter using that approach alone. Instead, we need to point out that while "the rich" often use their money in ways that are useful and productive (capital for businesses and contributions to charitable organizations that actually help people, e.g.), when our Leviathan state confiscates that money, it uses much of it in useless and even counter-productive ways. We need to get people to see the trade-off between resources used in the private sector and resources used by the state.
I never hear any mention of the Earned Income and Child tax credits when the class warfare card is played. I see arguments like those in the beginning of this article which suggest the hard-working truck driver is over-burdened, but fail to mention that most low income people get a hefty check during tax season. These credits are only a thinly disguised scheme for the partial redistribution of wealth.
I'm sorry, but the numbers here are fictional. I have a wife, four children, and a farm. My wife works to raise our kids, so my income($85K this year) is all we have. I will pay in excess of 40% after all taxes and fees are added up. State, local, property, FICA, Fed, what have you. That is the problem, I only get to spend about %60 of what I earn, and I have more write offs than anybody.
The good news is my kids are tops in the state, my second was just Valadictorian. That means the 100 grand plus a year we would be spending on the older two's college is being pickup by the state. Life is sweet at the top of the heap.
Stammon --
I grew up a farmer, now I'm a certified beancounter.
I think farmers are better at telling the truth than most politicians and commentators.
the other groups "conveniently" pick and choose what information to use to support the arguments they want to make. Farmers like to use all the facts.
I agree with you, and I have done a lot more tax returns than about any politician or writer. You are using all the facts, so you get the whole truth.
It may be true that a hard working person who makes a modest living often pays little income tax. That's very convenient for dishonest commentators. But if they will use ALL the facts, as you do, you'll discover that they pay a substantial price to support their government.
Congrats to your kids, I wish you well. Just know that someone out there respects you.
Sorry Stamon, first the article only talks about Federal Income tax. Secondly, 40%? Making about the same income and similar situation we paid 3% Federal tax. Propterty tax, CA income tax, Sales tax,FICA etc they all add up.
Is it a lot? Yes, but what's your point? And your're getting a donation of 100k a year from the good people of your state.
