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Wally_in_Cincy
01-31-2003, 02:06 PM
<font color="blue">Submitted for your inspection: </font color>




Don't buy what Democrats are selling
Topic: Tax cuts
By Larry Skolds


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I thought I'd get a head start on all the Democrats who are going to blindly follow the party line and soon start whining about how President Bush's proposed tax cuts would "only benefit the rich."
I'd like to get a few facts in this space before it is crowded with articles that toe the liberal line and denounce all Republicans as elitist and only out to protect the wealthy.

According to the Congressional Budget Office (all percentages listed in this article are from the CBO), in 1999 <font color="red">the highest 20 percent of taxpayers (in terms of income) paid 79 percent of total federal income taxes. The next highest 20 percent paid 16 percent of total income taxes, the middle 20 percent paid 7 percent, the next 20 percent paid 1 percent</font color> .

<font color="orange">The lowest 20 percent of taxpayers paid minus-2 percent</font color> . How can that be a negative number? The lowest 20 percent of taxpayers represents people who pay little or no taxes, yet receive refunds due to credits such as the Earned Income Tax Credit. These percentages become even more distorted when you look at the percentage paid by the top 1 percent of taxpayers.

I'm not arguing whether the progressive income tax is right or wrong. I believe in a progressive income tax system. Those who have more should pay more. So perhaps the top 20 percent paying 79 percent of the taxes is justified. You'll get little argument from me on that.

With these facts in hand, try to tune out what all the politicians are saying, Republican and Democrat. Just look at the facts.

The top 20 percent of taxpayers already pay 79 percent of income taxes. Ask yourself: If there is an across-the-board tax cut, who will receive more of the benefit? Common sense and plain old mathematics tells me that the top 20 percent are naturally going to receive a greater benefit in terms of dollars.

If the tax cut works as it is designed, the top 20 percent of taxpayers still will be paying the lion's share of taxes, but we all will pay a lower percentage of our hard-earned dollars.

In fact, through tax cuts already enacted, lower-income taxpayers already have received a higher-percentage tax cut than higher-income taxpayers.

Have you ever heard Sen. Tom Daschle tell you that? Have you ever heard Sen. Hillary Clinton tell you that in 1981 the richest 10 percent of households paid 49 percent of federal income taxes while in 1999 that number climbed to 63 percent? Of course not.

Why do the Democrats fail to tell us all of these facts?

Because they want you to believe that the rich are getting a free pass while you and I are paying most of the taxes in this country. False. The numbers tell us that the exact opposite is true. Don't fall for the line they're using. Check the facts.

In addition, before anyone starts to howl about cutting the tax on dividend income, try to remember that dividends are taxed twice, once to the corporation that is paying the dividend and once to the shareholder who receives the dividend. Cutting out the tax at the shareholder level so that it is only taxed once seems fair to me.

So remember, the next time you hear Rep. Nancy Pelosi tell you that the president's tax cut will "only benefit the wealthy" remember the facts mentioned above and to take what she says with a very large grain of salt.

Larry Skolds is a tax accountant. He lives in Fort Collins.

Originally published Saturday, January 11, 2003

http://www.coloradoan.com/news/stories/20030111/opinion/754017.html

sliprock
02-02-2003, 04:45 AM
Wally, I started a new thread similar to this one in response to the tax cut for the rich thread. I wish that I had noticed this one earlier, because It has some useful info, and I could have made my point more easilly. Thanks