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Tax day food for thought

By: Dan Spencer (Diary)  |  April 15th, 2009 at 09:59 PM  | 

RESIZE: AAA

The folks at Reason TV have put together a video that will make you stop and think about the fairness of our tax code.

That’s right:

  • Individual taxpayers spend $27.7 billion preparing taxes.
  • The tax code has grown to more than 67,500 pages.
  • The least wealthy 50% pay less than3% of federal income taxes.
  • The wealthiest 1% pay 39.89% of all federal income tax.
  • The wealthiest 5% pay more than 60% of all federal income taxes.
  • The wealthiest 10% pay more than 70% of all federal income taxes.

The Washington Post recently ran an editorial, which based upon numbers from the Congressional Budget Office, sliced the 2006 taxpayer data a little differently:

  • The top 20% of earners paid 70% of all federal taxes.
  • The very richest — the top 1% of taxpayers paid 28% of all taxes.
  • The lowest 20% of households paid only 0.8% of all federal taxes.
  • The bottom 90% of households paid only 45%.

When President Obama and Congressional Democrats say the “wealthy” should pay their “fair share” what do they mean? Is it fair for 10% to pay 70% of the income tax? How much should they pay? And as Ari Fleischer wrote in the Wall Street Journal the other day — shouldn’t everybody pay a far share of the income tax?

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  • zsmvf6
    • Dan Spencer

      Thanks, I fixed it.

  • drealoth

    While I agree that the current state of taxation is horrible, these accusations are misleading at best.

    The top 10% hold 71% of America’s net worth, and 80% of America’s assets. So is it truly a surprise that they pay 70% of America’s income taxes?

    The top 1% also hold 33% of America’s net worth and 40% of its financial assets.

    http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

    • ajl_mo

      I was wondering what these numbers are. Thanks for the info and the link.

    • lonebeagle

      Misleading? If I’m worth $10,000,000, where does it say in our Constitution that the freeloaders living on the other side of the tracks are entitled to a portion of MY wealth?

      What is so FAIR about my tax rates being 10 times higher than the clerk at the grocery store?

      Who gave YOU the right to tax me at a higher rate than other Americans?

      America is great because we believe in fairness and we are NOT A SOCIAL DEMOCRACY like Europe.

      • usa1ftw

        Since a recent study on taxation, echoed by Warren Buffet, points out that the top 400 wealthiest in the U.S. only paid a 17% tax rate, it’s clear you don’t know what you’re talking about. Bet you didn’t know that most red states get back more money from the Fed than they pay in taxes…so all you chumps complaining about being taxed, well, I want my money back. Go ahead and pay for your own roads and disaster relief…and don’t ask for any money for schools or any other entity that might better your children. Stay ignorant. It’s what makes lurking this website so much fun…to see just how uniformed most of you are in all walks of life. (Tea Parties a success? Bwaahaahaahaha! The largest one got 14,000 – in a red state, of course, where they get more tax relief than most – but more often than not, the day fizzled with 500 here, 1,000 there…and this website fills you full of the usual b.s. that “100′s of thousands turned out”. Yeah and Sarah Palin will be the next president. Keep up the narrow-minded blather…it’s so much fun watching the Grand Old Pedophiles shrink smaller and smaller as the vitriol gets more and more psychotic.

        • $peciallist

          kook

        • lonebeagle

          Is on display with usa1ftw! It seems that liberals can’t complete one thought without resorting to name calling (e.g., “chumps”, “narrow-minded blather”, “Grand Old Pedophiles”).

          I’ll excuse you to take your potty mouth back to the Kos.

          On the other hand, why don’t you stick around–I love watching a train wreck in slow motion. (Hint: You’re the train)

          • TNJim

            http://www.redstate.com/pejman_yousefzadeh/2009/04/16/of-tea-parties-and-hysterics/

        • davo119
          • davo119
          • TNJim

            Trace the 3rd thread from the left back up.

        • http://www.ssce.net/Web-Articles/Web-articles-indexed-authors.html#authors-l JLenardDetroit

          Sure, only a couple locations had 10,000 or so in attendance…. Many more had maybe a 1,000 or so…. Since these were attended by Taxpayers, folks that HAVE JOBS to actually earn Income in order to have it taxable (unlike you Liberal loons that bus in by Unions since they are not working) there were countless other SMALL locations all across each and every State that you purposefully refuse to acknowledge….. When you add the 100 or so at those 100′s of locations, it is easy to understand that potentially 500,000 people total may have (again, I’ll say MAY HAVE – as we’ll never know as all those countless Small locations weren’t COVERED BY ANY MSM) attended the Rallies…. It was/is part of the Government closest to the People concept you have no clue on/of/about!

          What is even more moronic is your notion of “pay for your own Roads” comment…. as we agree – you too should be paying for your own Roads and Welfare hand-outs you want to give people. Tax your own State!

          • usa1ftw

            I love whenever the news doesn’t go the Right’s way, it’s the dreaded “MSM’s” fault. It’s one big conspiracy, I tells ya! So, I guess all the ink wasted on Clinton’s bj was the “Liberal Media” just having a lapse in judgment. And the fawning all over the Chest Thumper as he took us into one of our greatest military blunders without question was just a trap so they could vilify him 4 years later. You do know that the term “liberal media” was coined by a young Reagan speechwriter so as to counteract the negative press he was receiving at the time, don’t you? Brilliant strategy. If I call you a liar in a room full of people, you’ll spend the rest of the afternoon trying to convince everyone otherwise. It’s the kind of tactic Rove learned from and employed beautifully…until the nation finally caught on last Fall.
            As for my “roads” comment, I’m merely pointing out to you that this Federal Government taxation that you so readily disdain does a hell of a lot more for you than you and a couple of your neighbors could ever pool together and afford. Know that roadway you drive on? Yep. The Government built it. The military that protects the U.S. and her interests….yep. Government put that together, too. How about that velcro you use instead of shoelaces on your sneakers? Yep. Came from the Government’s NASA program along with thousands of other discoveries/materials/products we use in our everyday life. Of course, you do realize that these things are created by using (paying for) products or manpower from independent companies, like, say, Caterpillar or McDonnell-Douglas or Bob’s Paving and Asphalt Co.. Too bad Big Brother has such a say in our private lives and businesses… how dare they! Then again, sure is nice having an OSHA, FDA, FCC or FAA, to name a few, to make sure the wrong kind of Capitalists don’t take advantage of or even kill the average consumer. (See: Chinese toothpaste, Chinese pet food, etc. Bet the average Chinese citizen wishes their government looked after them that way.)
            And I guess it’s o.k. when you guys do it (Idiot in Chief, Obama Bin Biden, to name just two of the dozens I’ve seen on Redstate.) but it’s unacceptable behavior when someone comes in and gives you a taste of your own medicine (arsenic – it’s the only kind I’ve seen all over this website.) The Make Obama Fail section is particularly infantile and gives no thought to those consequences. (I’m sure the Dept. of HS enjoys looking in on you folks, too.)
            As for the GOP comment, well, I may not have a lot to back that up…after all, this site IS a couple of years old and hasn’t been updated in awhile:
            http://www.somethingblack.com/Repub1.htm

          • McKinley

            Evil Empire and all.

          • lonebeagle

            You might have your own “business”, but I think that extorting motorists stopped at redlights to wash their windows doesn’t qualify as a real business.

            Non stop rants are the signs of a person under the influence or who may be suffering from a number of psychiatric disorders.

            But, keep it up since us “brain dead” GOP, right wing extremists need your kind of entertainment.

            It’s a telling sign when by all accounts all of the Tea Parties around the country were peaceful, respectful, orderly and apparently tidy. Compare and contrasts this with the liberal mob that trashed the Washington Mall on the Immaculation Day of “The One”.

          • http://www.ssce.net/Web-Articles/Web-articles-indexed-authors.html#authors-l JLenardDetroit

            (nt)

          • JadedByPolitics

            “And I guess it?s o.k. when you guys do it (Idiot in Chief, Obama Bin Biden, to name just two of the dozens I?ve seen on Redstate.) ”

            I missed the Obama Bin Biden damn that’s good I will use that thanks for the heads up!

        • http://hillbillypolitics.com Steph C

          Go ahead and pay for your own roads and disaster relief?and don?t ask for any money for schools or any other entity that might better your children.

          At 25 million dollars per mile, I’m certain I could find a better way of paving the roads than the government is doing. And for disaster relief, let’s take a look shall we since it’s a reference to Katrina.

          Louisiana was a blue state at the time of Katrina; very blue. Mary Landrieu ball-facedly admitted syphoning funds from the levee appropriations for pet projects. Kathleen Blanco refused to let the National Guard go in and drop relief supplies at a center that had been designated as a shelter before it, too, was cut off by the flooding, saying that she didn’t want the people to stay there; nevermind they had nowhere else to go. Mayor Ray Nagin allowed buses to be flooded instead of utilizing them for a mandatory evacuation. Since Bobby Jindal took over and LA became more a purple to red state, it’s not so bad there.

          In contrast, MS got little notice after the first week or so and not nearly the amount of money for recovery that went to New Orleans alone. MS is a red state, btw. Last spring Gulfport still looked like a disaster zone and I expect that condition will persist for a long time yet. My father-in-law on retirement pay was told by his insurance company he made too much money to get insurance help fixing his house. It’s still slightly off its foundations.

          My mother-in-law in AL had part of her roof gone after Katrina. She walked with the aid of a walker. At the lines for FEMA she kept being pushed to the back of the line as not needy enough until eventually she became ill from having to stand in the broiling sun for days so she gave up. Family pulled together and fixed the house, not the government, and in spite of most of the family being in the same shape because they live in that area, too.

          Do you really want to have this argument?

      • drealoth

        How do you define fairness?

        In all systems of government, fairness is the goal, but the definition of fairness is what distinguishes them. In a monarchy, it’s fair that those of noble blood are the most powerful and the rulers of society. In socialist states, it’s fair that everyone is given health care, food and somewhere to live, regardless of their contribution to society. In a dictatorship, it’s fair that those who seized power are all powerful. In capitalism, it’s fair that everyone is given the same opportunity to succeed or fail. Milton Friedman summarized this nicely when he said that, “The economic race should not be arranged so everyone arrives at the finish line at the same time but so that everyone starts at the starting line at the same time.”

        This is why taxes are based on percentages, not fixed amounts.

        By decreasing taxation of the wealthiest Americans, you have to decrease government spending to make up for the lack of revenue, or increase taxes on the poor.

        For argument’s sake, let’s suppose that there is a fixed tax rate on net worth, and that the USA makes $1,000 billion (ie. $1 trillion) in taxes each year (this is silly, I know, but the example will serve its purpose). Of this trillion dollars, according to the numbers I posted, the wealthiest 10% of Americans pay $710 billion and the bottom 90% pay $290 billion. Now let’s suppose that you want to cut the tax that the wealthiest 10% pay to 75% of what it was. This means that your $710 billion in tax revenue from these people drops to $532 million. To make up for this revenue, you now need to increase the tax rate on the bottom 90% to 161% of what it was.

        If the tax rate was fixed at 20% for all Americans, this cut would mean that the wealthiest now pay 15% for tax, while the poorest now pay 32% for tax – not what I would call fair at all, nor fostering of the American dream that if you live here and work hard you can put food on your table and send your kids to college.

        And don’t mistake net worth for value to society. Some of my teachers and professors have had a profound effect on my life and yet hardly have any net worth. Paris Hilton, in contrast, is likely worth more money than anyone here on RedState. Just because someone is not worth $10,000,000 does not mean that they are a freeloader. Just because someone is worth $10,000,000 does not mean that they are not.

        • Hooah_Mac

          Give me justice any day,

          Is it just to take from one to give to another? Justice means getting what is deserved, rewards for doing what is right, punishment for doing what is wrong.

          • AKSteveB
          • Husker
  • DerKrieger

    …really needs to hammer this point home. I get sick and tired of hearing the Dems lament that Bush administration cut taxes for the wealthiest taxpayers. Well they’re the only ones paying any damn taxes!!! You can’t cut for those that don’t pay. And all Americans ought to feel obligated to pay some taxes.

  • skorrent1

    At least on Redstate we should not conflate “income” and “wealth.” You pay income tax on taxable income, you are not taxed on “wealth.” George Soros, by all accounts a “wealthy” man, claims to pay about 15% of his total income in income taxes. Those who are attempting to accumulate wealth are, by and large, those who pay the highest percent of total income in taxes. By the time you reach centi-millionaire status you can afford full-time tax accountants on your side. The advantages of trusts and foundations appear (see, eg., the Clintons and Rhambo).

    In terms of direct taxes paid, the easiest numbers to get are income tax bracket and % of income taxes paid. This leaves out payroll taxes, that hit low earners hardest, property taxes, that soak the middle classes, and sales taxes, that are visible to everyone and least onerous on those attempting to become wealthy, i.e., saving.

    Let’s hear it for the Fair Tax!

  • wolfgang

    ….majority.
    In the early days of this country, the right to vote was restricted to the propertyholders. Those who had the most to lose had all the say in how their assets were to be treated by the government. Those who had nothing to lose, had nothing to say.
    Since the widening of sufferage in this country occurred, the overwhelming theme of the electorate has been an increasingly expanding ‘What’s mine is mine, and what’s yours is mine!” The election of THE OBAMBI, under the media promoted guise as modern day Robin Hood, is the ultimate expression of that voter sentiment to date.

  • uvellosturmind

    The truth may set you free, but not if you’re a Republican and the subject is taxes. After all, 95% of American families as promised received a tax cut [...and we'll cut there to the video where the protester reminds us of the tobacco tax hike. You know, the one that just hit the lower and middle classes. - Moe Lane]

    • Achance

      over at Kos or one of the other nutjob lefty sites.

    • janis

      What a wonderful thing that is! And don’t bother to link to a liberal site to prove your lefty talking points. If you think you’re going to “set us straight”, you have indeed lost what passes for your mind.

      Just go with lefty redfaced rage. It’s what you folks do best.

    • http://web.mac.com/mayo99/iWeb/Site/VladBlog/VladBlog.html Vladimir

      That’s because their tax burden is zero, or negative.

      I’d be happy, too.

      Am I lying now? Hurry and answer before you disappear.