View Full Version : A morning wake up for my liberal friends

02-06-2008, 05:58 AM
Here, for your perusal, is a non-partisan review of the Bush tax policy.

Please don't comment unless you are willing to read the text and comment on it's contents.

Every Democrat running for President wants to raise taxes on "the rich," but they will have to do something miraculous to outtax President Bush. Based on the latest available tax data, no Administration in modern history has done more to pry tax revenue from the wealthy.

Last week the Congressional Budget Office joined the IRS in releasing tax numbers for 2005, and part of the news is that the richest 1% paid about 39% of all income taxes that year. The richest 5% paid a tad less than 60%, and the richest 10% paid 70%. These tax shares are all up substantially since 1990, and even somewhat since 2000. Meanwhile, Americans with an income below the median -- half of all households -- paid a mere 3% of all income taxes in 2005. The richest 1.3 million tax-filers -- those Americans with adjusted gross incomes of more than $365,000 in 2005 -- paid more income tax than all of the 66 million American tax filers below the median in income. Ten times more.

For the political left and most of the media, this means only that the rich are getting richer, so of course they're paying more taxes. And it is true that the top earners have increased their share of total income. Yet, as the nearby table shows, the rich showed more rapid gains in reported income shares in the 1990s than in the first half of this decade. The share of the richest 1% jumped to 20.8% of total income in 2000, from 14% in 1990, but increased only slightly to 21.2% in 2005. This makes it hard to pin their claim of "rising inequality" on the Bush tax cuts, though the income redistributionists are trying. By this measure, the Clinton years were far worse for "inequality."

Notably, however, the share of taxes paid by the top 1% has kept climbing this decade -- to 39.4% in 2005, from 37.4% in 2000. The share paid by the top 5% has increased even more rapidly. In other words, despite the tax reductions of 2001 and 2003, the rich saw their share of taxes paid rise at a faster rate than their share of income. How could this be?

One explanation is that the Bush tax cuts reduced the income tax liability of middle and lower income households by more proportionately than the rich. The average family of four with an income of $40,000 saw its income tax liability fall by about $2,052 a year from the 2001 and 2003 tax cuts.

The IRS statistics also tell a more complicated economic story than the media claim. First, America continues to be a society of upward income mobility. Over the past decade, millions of Americans have joined the once highly exclusive club of six- and seven-figure earners. Some 304,000 Americans earned $1 million or more in annual income in 2005, compared to 110,000 in 1996 and 176,000 in 2000. Because there is no cap on the top income share, this increase in millionaires pushes the top income (and taxes paid) share higher. The number of millionaire households in net worth also increased to nine million in 2006, up from six million in 2001, according to TNS, a global market research firm.

Liberals decry this as proof of a new "gilded age." But we'd say these gains are a sign that more Americans are joining the ranks of the truly affluent. More than 13 million American households, or about one in 10, had an income of more than $100,000 a year in 2005. This is the kind of upward mobility that a dynamic society should want because it means that incomes aren't stagnant and opportunity continues to exist.

Keep in mind as well that the IRS only records the income that taxpayers report. Its data don't include income that the rich hide in tax shelters or otherwise defer. And there is evidence that lower tax rates since 1981 have caused the rich to declare more of what they earn. In 1980, when the top income tax rate was 70%, the richest 1% paid only 19% of all income taxes; now, with a top rate of 35%, they pay more than double that share. With lower rates and fewer tax loopholes after the 1986 reform, there is less incentive to shelter income to avoid tax.

The IRS figures are also misleading because they include income that can make many Americans rich for only a single year. In 2005, for example, taxpayers earned an estimated $600 billion in income from capital gains, which is reported on tax forms as part of adjustable gross income. But that might include the one-time gain from a middle-class senior couple that has lived modestly for decades but suddenly retires and sells the family business or home for $1 million or more. They may be "rich" in Hillary Clinton's definition of the term, but in fact they are benefiting in one tax year from a lifetime of hard work and thrift.

The amount of capital gains declared on tax forms has doubled since the tax rate was cut to 15% from 20% in 2003, which has also contributed to more Americans being "rich." Dividend income has also increased by at least 50% since that rate was cut to 15% from nearly 40% in 2003. So part of the income gains of the rich are simply a result of assets that have been converted into taxable income -- in part because of lower tax rates.

We hate to break up the media's egalitarian chorus with these details, but facts are facts. If Democrats really want to soak the rich, they'll keep tax rates where they are, or, better, lower them some more.<hr /></blockquote>

OH MY! (http://online.wsj.com/article/SB119786208643933077.html?mod=rss_opinion_main)

If you have made it this far I commend you and would like to hear your thoughts.


02-06-2008, 06:21 AM
And it is true that the top earners have increased their share of total income. <hr /></blockquote>

So what are you complaining about.

January 8, 2007
Tax Cuts Offer Most for Very Rich, Study Says

WASHINGTON, Jan. 7 — Families earning more than $1 million a year saw their federal tax rates drop more sharply than any group in the country as a result of President Bush’s tax cuts, according to a new Congressional study.

The study, by the nonpartisan Congressional Budget Office, also shows that tax rates for middle-income earners edged up in 2004, the most recent year for which data was available, while rates for people at the very top continued to decline.

Based on an exhaustive analysis of tax records and census data, the study reinforced the sense that while Mr. Bush’s tax cuts reduced rates for people at every income level, they offered the biggest benefits by far to people at the very top — especially the top 1 percent of income earners.

Though tax cuts for the rich were bigger than those for other groups, the wealthiest families paid a bigger share of total taxes. That is because their incomes have climbed far more rapidly, and the gap between rich and poor has widened in the last several years.

The study offers ammunition to supporters and opponents of Mr. Bush’s tax cuts, which are all but certain to touch off a battle between the president and the Democrats who just took control of Congress. <hr /></blockquote>



02-06-2008, 07:02 AM
<blockquote><font class="small">Quote Qtec:</font><hr> &lt;/font&gt;&lt;blockquote&gt;&lt;font class="small"&gt;Quote:&lt;/font&gt;&lt;hr /&gt;
And it is true that the top earners have increased their share of total income. <hr /></blockquote>

So what are you complaining about.


Q <hr /></blockquote>

Top producers get ahead faster and pay more!

What are you complaining about?


02-06-2008, 09:51 AM
If any of the Dems actually cared about the rich "paying their full share" they would be up in arms against Buffet for taking all the tax breaks. You never see a Dem look for tax reform or to fix loopholes, you just see them wanting to up taxes without fixing anything and that only hurts the middle class (the lower class if they are actually paying any income tax).


02-06-2008, 11:54 AM
Quite true.

It's obvious the DNC is the party of the rich, commited onlt to their own power, and achieving it by pandering to the uninformed, and/or uneducated, and/or illiterate, and and/or brainwashed.


02-06-2008, 02:20 PM
I skipped the text....but you don't have any liberal friends here...might not have any conservative friends either.
Well, you don't want friends anyway, just followers...since friends are "equal"

02-06-2008, 02:30 PM
I do applaud the senate for attempting to add the retired to the gush of free money we are gong to hand out. If we are going to spend money on shocking the economy into a surge, the folks on social security should be on the list. Many of them are on fixed income and most won't be spending it on crack or new CD's and flat screens.