posted on October 9, 2008 10:08:52 AM new
I know our intrepid whack pack members here are all for "taxing the rich" and probably actually think they pay some significant amount of the country's tax burden, but Larry Elder had some fun with the theory:
So, what do "the rich" pay in federal income taxes? Nothing, right? That, at
least, is what most people think. And Democratic presidential candidate Barack
Obama wants to raise the top marginal rate for "the rich" -- known in some
quarters as "job creators."
A recent poll commissioned by Investor's Business Daily asked, in effect,
"What share do you think the rich pay?" Their findings? Most people are
completely clueless about the amount the rich actually do pay.
First, the data. The top 5 percent (those making more than $153,542 -- the
group whose taxes Obama seeks to raise) pay 60 percent of all federal income
taxes. The rich (aka the top 1 percent of income earners, those making more
than $388,806 a year), according to the IRS, pay 40 percent of all federal
income taxes. The top 1 percent's taxes comprise 17 percent of the federal
government's revenue from all sources, including corporate taxes, excise
taxes, social insurance and retirement receipts.
Now, what do people THINK the rich pay? The IBD/TIPP poll found that 36
percent of those polled thought the rich contribute 10 percent or less of all
federal income taxes. Another 15 percent thought the rich pay between 10 and
20 percent, while another 10 percent thought the rich's share is between 20
and 30 percent. In other words, most people thought the rich pay less --
far less -- than they actually do. Only 12 percent of those polled thought
the rich pay more than 40 percent.
Let's try this another way. A U.S. News & World Report blogger went to the
Democratic National Convention in Denver and conducted an informal poll of 24
DNC delegates. He asked them, "What should 'the rich' pay in income taxes?"
Half the respondents said "25 percent"; 25 percent said "20 percent"; 12
percent said "30 percent"; and another 12 percent said "35 percent." The
average DNC delegate wanted the rich to pay 25.6 percent, which is LOWER than
what the rich pay now -- both by share of taxes and by tax rate!
Thirty percent of American voters pay nothing -- zero, zip, nada -- in federal
income taxes. And, not too surprisingly, compared with taxpaying voters, they
are more likely to support spending that benefits them. The majority of the 30
percent who don't pay federal income taxes agree with Obama's $65 billion plan
to institute taxpayer-funded universal health coverage. But the majority of
the 70 percent who pay federal income taxes are opposed to Obama's health care
plan.
Non-taxpayers support Obama's plans for increased tax deductions for
lower-income Americans, along with higher overall tax rates levied against
middle- and upper-income households. The majority of non-taxpayers (57
percent) also favor raising the individual income-tax rate for those in the
highest bracket from 35 percent to 54 percent. And the majority (59 percent)
favors raising Social Security taxes by 4 percent for any individual or
business that makes at least $250,000.
Obama calls increasing taxes and giving them to the needy a matter of
"neighborliness." Vice presidential running mate Joe Biden calls it a matter
of "patriotism." Yet when it comes to charitable giving, neither Obama (until
recently) nor Biden feels sufficiently neighborly or patriotic to donate as
much as does the average American household: 2 percent of their adjusted gross
income.
Liberal families earn about 6 percent more than conservative families, yet
conservative households donate about 30 percent more to charity than do
liberal households. And conservatives give more than just to their own
churches and other houses of worship. Conservatives, especially religious
conservatives, give far more money and donate more of their time to
nonreligious charitable causes than do liberals -- especially secular
liberals.
In 2007, President George W. Bush and his wife had an adjusted gross income of
$923,807. They paid $221,635 in taxes, and donated $165,660 to charity -- or
18 percent of their income. Vice President and Mrs. Cheney, in 2007, had a
taxable income of $3.04 million. And they paid $602,651 in taxes, and donated
$166,547 to charity -- or 5.5 percent of their income.
Barack Obama and his wife, Michelle, earned between $200,000 and $300,000 a
year between 2000 and 2004, and they donated less than 1 percent to charity.
When their income soared to $4.2 million in 2007, their charitable
contributions went up to 5 percent.
Joe and Jill Biden, by contrast, made $319,853 and gave $995 to charity in
2007, or 0.3 percent of their income. And that was during the year Biden was
running for president. Over the past 10 years, the Bidens earned $2,450,042
and gave $3,690 to charity -- or 0.1 percent of their income.
So let's sum up. The "compassionate" liberals -- at least based on charitable
giving -- show less compassion than "hardhearted" conservatives. The rich pay
more in income taxes than people think. Voters, clueless about the facts, want
the rich to pay still more.
posted on October 9, 2008 10:31:49 AM new
"President George W. Bush and his wife had an adjusted gross income of
$923,807......."
"Barack Obama and his wife, Michelle, earned between $200,000 and $300,000 a
year..."
"Vice President and Mrs. Cheney, in 2007, [b]had a
taxable income[/b] of $3.04 million...."
"Joe and Jill Biden, by contrast, made $319,853 ..."
Apples to apples please. If we are talking "adjusted gross income", then use AGI for all - the truth of the matter is, many middle income American people don't have enough deductions to even use the long form 1040.
posted on October 10, 2008 06:16:17 PM new
How about including payroll taxes in that analysis? Typical tactic to exclude the most regressive tax imaginable.
posted on October 12, 2008 05:33:12 PM newAnd the wealthy are clueless when it comes to the price of anything that the middle class is forced to buy: milk, gas, clothes.
And in the case of McCain he has no idea how many homes he owns.
So true. $500.00 purses, etc... No idea what the middle class pay or what their worries are.
A poll is not a prediction. It is a snapshot of how people are thinking right now.
posted on October 12, 2008 05:40:14 PM new
Whether somebody spends $100 for shoes or $500, is totally immaterial to the question YOU posed and answered in this editorial.
The problem seems to be you people are too stupid to read.
posted on October 12, 2008 06:10:57 PM new
http://www.urban.org/publications/1001065.html
Two-Thirds of Tax Units Pay More Payroll Tax Than Income Tax
April 15 is synonymous with taxes in the United States, but most Americans actually pay more payroll taxes than federal income taxes. In 2006 workers and employers each paid 6.2 percent Social Security tax on the first $94,200 of earnings and 1.45 percent Medicare tax on all wages. While the statutory obligation to pay payroll taxes is split evenly between workers and employers, most economists believe that the employer tax usually translates into lower wages, so workers bear the full burden of the tax. Thus, the total payroll tax rate equals 15.3 percent of earnings for most workers.
About two-thirds of taxpayers owed more payroll taxes (including the employer portion) than individual income taxes in 2006. Many households (including most retirees) do not have any wage income and thus pay no payroll tax. Among households with wage earners, 86 percent have higher payroll taxes than income taxes, including almost all of those with incomes less than $40,000 and 94 percent of those with incomes less than $100,000. If only the employee portion of payroll taxes is considered, 44 percent of taxpayers and 56 percent of wage earners pay more payroll tax than income tax, including nearly 80 percent of earners with incomes less than $50,000.
The payroll tax is very regressive with respect to current income: The average tax rate falls as income rises. The income tax, in contrast, is progressive. The regressivity of the payroll tax is mitigated to a substantial extent when Social Security and Medicare benefits are considered as well (not shown).
posted on October 12, 2008 06:21:22 PM new
In case it isn't clear, many people and their employers pay a substantial percentage of their income in payroll taxes. In the case of high earners, which I admit my family is lucky enough to be in, it's a tiny fraction of income.
Sales taxes are also regressive, as are (to a lesser extent) property taxes.
All in all, the well-to-do do well.
It is sickening to me that it is usually those who advocated our stupid wars and other wastes of taxpayer money don't want to pay up. How hypocritical. You can yell all you want to about earmarks, but in the overall scheme of things, they're a drop in the bucket compared to the war.
posted on October 12, 2008 06:40:39 PM new
"The problem seems to be you people are too stupid to read."
Gee,desquirrel, the rarefied air must be mighty thin up there on Mount Olympus oh God of Superiority, brother of Narcissus.
"In 2007, President George W. Bush and his wife had an adjusted gross income of
$923,807. They paid $221,635 in taxes, and donated $165,660 to charity -- or
18 percent of their income. Vice President and Mrs. Cheney, in 2007, had a
taxable income of $3.04 million. And they paid $602,651 in taxes, and donated
$166,547 to charity -- or 5.5 percent of their income."
The charitable donations may be to assuage their guilt, but are commendable none the less. As for taxes, the Bushes paid approximately 25% and the Cheneys approximately 20% in taxes--not too bad for a 7 figure income. The rewards (or penalties) of success include higher tax brackets. If I made $3,000,000 a year, I would gladly pay 20% in taxes. It is the patriotic thing to do.
posted on October 12, 2008 06:41:27 PM new
You can pick and nick all you want. It still doesn't change the fact that those whining they bear the tax burden on their shoulders pay only a fraction of it. And you just have to love when they try to decide what "enough" is.
posted on October 12, 2008 06:44:18 PM new
Comprehension has to be off if the argument that Obama gives a smaller PERCENTAGE of his income than Bush because he made less.
posted on October 13, 2008 06:03:23 AM new
Yes, good job Cash. It is a pleasure reading your informative posts, especially regarding economics. Like John McCain, I admit that this is one of my many weaknessses.
posted on October 13, 2008 07:42:16 AM new
Paul Krugman, my favorite economist, just won the Nobel Prize. I am as proud as if he were my child. He is living proof that it is possible to be a capitalist with heart AND brains. He doesn't just repeat the received wisdom, and often surprises with his analysis. If you have some time to read, he can be found online via Google, and your library probably has his books. He has the gift of making complex topics understandable without over-simplifying them.
posted on October 13, 2008 08:12:09 AM new
Regarding charitable donations, let's remember that it is much easier to give to charity when you come from "old money" than it is if you're trying to establish a nest egg.
Bush and Cheney would do fine if they never earned another penny. That can't be said for Obama (and I don't know Biden's finances well enough to say).
posted on October 13, 2008 09:38:11 AM new
Well I'll just have to say it again. If X pays higher dog catcher fees than Y, or X pays more in subway fare than Y pays for wax for the Bentley IS MEANINGLESS to the facts and questions in the editorial.
The questions "he can't answer" (LOL) have NOTHING to do with the topic. Whether Obama makes 1/2 or 1/3 of what somebody makes has no bearing on the PERCENTAGE of charitable gifts.
posted on October 13, 2008 09:53:59 AM new
You're missing my point Squirrel. If my income this year is 1% relative to my net worth, I am more than able to give most of it away. If my income this year is 95% relative to my net worth, I had better keep some of it to add to savings.
Old money is much better positioned to donate to charity than new money. If the Bush family gave away every penny they earned this year to charity, I don't think they'd be selling apples on the street corner.
How about a comparison of charitable contributions relative to net worth?
By the way, you probably don't want to go down the road of how the Bush family got its net worth in the first place. Not pretty, not even for a right winger.
