Their Fair Share (and the left's myths)

[Fieldmouse]

http://online.wsj.com/article/SB121659695380368965.html?mod=opinion_main_review_ and_outlooks





REVIEW & OUTLOOK










Their Fair Share
July 21, 2008;PageA12
Washington is teeing up "the rich" for a big tax hike next year, as a way to make them "pay their fair share." Well, the latest IRS data have arrived on who paid what share of income taxes in 2006, and it's going to be hard for the rich to pay any more than they already do. The data show that the 2003 Bush tax cuts caused what may be the biggest increase in tax payments by the rich in American history.

The nearby chart shows that the top 1% of taxpayers, those who earn above $388,806, paid 40% of all income taxes in 2006, the highest share in at least 40 years. The top 10% in income, those earning more than $108,904, paid 71%. Barack Obama says he's going to cut taxes for those at the bottom, but that's also going to be a challenge because Americans with an income below the median paid a record low 2.9% of all income taxes, while the top 50% paid 97.1%. Perhaps he thinks half the country should pay all the taxes to support the other half.
Aha, we are told: The rich paid more taxes because they made a greater share of the money. That is true. The top 1% earned 22% of all reported income. But they also paid a share of taxes not far from double their share of income. In other words, the tax code is already steeply progressive.
We also know from income mobility data that a very large percentage in the top 1% are "new rich," not inheritors of fortunes. There is rapid turnover in the ranks of the highest income earners, so much so that people who started in the top 1% of income in the 1980s and 1990s suffered the largest declines in earnings of any income group over the subsequent decade, according to Treasury Department studies of actual tax returns. It's hard to stay king of the hill in America for long.
The most amazing part of this story is the leap in the number of Americans who declared adjusted gross income of more than $1 million from 2003 to 2006. The ranks of U.S. millionaires nearly doubled to 354,000 from 181,000 in a mere three years after the tax cuts.
This is precisely what supply-siders predicted would happen with lower tax rates on capital gains, dividends and income. The economy and earnings would grow faster, which they did; investors would declare more capital gains and companies would pay out more dividends, which they did; the rich would invest less in tax shelters at lower tax rates, so their tax payments would rise, which did happen.
The idea that this has been a giveaway to the rich is a figment of the left's imagination. Taxes paid by millionaire households more than doubled to $274 billion in 2006 from $136 billion in 2003. No President has ever plied more money from the rich than George W. Bush did with his 2003 tax cuts. These tax payments from the rich explain the very rapid reduction in the budget deficit to 1.9% of GDP in 2006 from 3.5% in 2003.
This year, thanks to the credit mess and slower growth, taxes paid by the rich may fall and the deficit will rise. (The nonstimulating tax rebates will also hurt the deficit.) Mr. Obama proposes to close this deficit by raising tax rates on the rich to their highest levels since the late 1970s. The very groups like the Congressional Budget Office and Tax Policy Center that wrongly predicted that the 2003 investment tax cuts would cost about $1 trillion in lost revenue are now saying that repealing those tax cuts would gain similar amounts. We'll wager it'd gain a lot less.
If Mr. Obama does succeed in raising tax rates on the rich, we'd also wager that the rich share of tax payments would fall. The last time tax rates were as high as the Senator wants them -- the Carter years -- the rich paid only 19% of all income taxes, half of the 40% share they pay today. Why? Because they either worked less, earned less, or they found ways to shelter income from taxes so it was never reported to the IRS as income.
The way to soak the rich is with low tax rates, and last week's IRS data provide more powerful validation of that proposition.
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[Fieldmouse]

Let's try to get the picture in the post.

[RainmakerIII]

We already know the richest pay the most tax's FM, thats the way the system works, and the way it's suppose to work. Of course the loopholes, and subsidies, bail out protection and writeoffs, lobby power and on and on and on, lessons the burden on these Corps, yes and the very word Corporation of course.

[Fieldmouse]

ORIGINAL: RainmakerIII

We already know the richest pay the most tax's FM, thats the way the system works, and the way it's suppose to work. Of course the loopholes, and subsidies, bail out protection and writeoffs, lobby power and on and on and on, lessons the burden on these Corps, yes and the very word Corporation of course.

Has absolutely nothing to do with the above post, but why am I not surprised? FYI the Rainmaker, corporations don't pay taxes. We the people do. Those corporations you love to hate pass their tax burdens on to the end buyer, we the people. Corporate taxes in this country need to be set at ZERO. You would see investment and the value of the dollar take off straight up in this country. The downside is the fact we would have to import our workers because we either don't haveenough man power and/or the skill level for the jobs it would produce.

[RainmakerIII]

Its not the corporations I hate FM, just the administration that put these loopholes there.

[Fieldmouse]

ORIGINAL: RainmakerIII

Its not the corporations I hate FM, just the administration that put these loopholes there.

Lol FYI, loppholes have been around ever since the tax code was invented. Do you own a house? If you do did you know that mortgage detuction is a loophole given to your through the lobbying of the banks? What ahout children do you get to take that deduction, excuse me loophole? What about medical bills are you eligible for that loophole? There are a lot on this board pretty sick of the AMT. Do you know whaqt that is?

So since your so against loopholes, then are you all in favor of the Fair Tax plan or the Flat tax plan? Both would eliminate all the loopholes out there and couple that with a zero tax on corporation there would be no loopholes except for the poor.

[ipscshooter]

ORIGINAL: RainmakerIII

Its not the corporations I hate FM, just the administration that put these loopholes there.

You do realize, don't you, that the Tax Code is written by Congress, NOT by "the administration"...

How about identifying a few of these horrible loopholes for us? Or are you just spouting off your Dailykos buzzwords for the day in order to try and impress the idiots who actually buy into that garbage? You realize that ALL taxes are on the people. Any taxes imposed on "corporations" get passed on to the people in the form of higher prices.

By the way, to simplify for you the point of the original post... Only morons buy into the whole myth that the "Bush tax cuts" only benefited the wealthy and, as a result, the wealthy are not paying their fair share, and the poor and middle classes are paying more than their fair share. But... that myth is being sold to Democrat voters so, so it's kind of self-explanatory why they buy into it...

[Fieldmouse]

Ips, rainmaker's reply will be the enron loophole.

[ipscshooter]

ORIGINAL: Fieldmouse

Ips, rainmaker's reply will be the enron loophole.

Which was, of course, passed in December 2000, and signed into law by His Royal Highness William Jefferson Clinton...

[Alsatian]

Its the classic "tax and spend" liberal MO. Why am I not surprised? I think this race, as all presidential races, comes down to a liberal democrat running against a moderate republican, sound bites and Obama's poll-based, advisor initiated shuffle to the center notwithstanding.