Nel's New Day

April 25, 2011

“Fair” Taxes for Americans

Filed under: Uncategorized — trp2011 @ 5:33 PM

The Congressional recess is over, and we can look forward to hearing more rants from Republicans about “the path to prosperity” through both program and tax cuts. Most people in the polls want to increase taxes for the wealthy; most Congressional politicians want to cut taxes for the wealthy. Why the disconnect?

An argument that I frequently hear is that the wealthy are already paying more taxes than the rest of the population. Yes, the wealthiest one percent of Americans pay 38 percent of income tax but receive only 24 percent of income. Only 24 percent of income for one percent of the people in the United States? The same top one percent also has 34 percent of the net worth and holds 42.7 percent of financial wealth (net worth minus the value of their homes). Those statistics are five years old; I cannot imagine how much more income, net worth, and financial wealth that they have now. Meanwhile, since the bubble burst this past decade, the wealth of the media household has decreased 36 percent while the top one percent (remember them!) has gone down only 11 percent.

And how about the income for all these people? In 2005, reported income increased almost 9 percent, but that’s because the top 10 percent went so sky-high. In the same year, average income for the bottom 90 percent went down from 2004, .06 percent. The high reported income came from the top one percent (them again!). Their income went up an average of $1.1 million each—about 14 percent. The top ten percent of Americans gathered almost half of all reported income in the same year. The top 1 percent got 21.8 percent of all reported income, up from 19.8 percent in 2004, and the highest since 1928 when they received 23.9 percent. (Let’s see—that was the year before the Great Depression started.)

What about taxes? Over the past four decades, the people making the most money saw their taxes fall by one-half. The middle class didn’t see any change in their taxes.

There are tons of statistics to show that the income in the United States is severely unbalanced, closing in on the tipping point. Why should Republicans want to decrease taxes for the wealthy? (Here’s where we find the disconnect.) The wealthy give almost three-fourths of campaign contributions. The more the Republicans lower taxes for the wealthy, the more campaign contributions they can get. This  money often determines the results of an election. It’s as if these politicians are on retainer.

Back to whether it’s “fair” that the wealthy have a higher tax rate than the poor—although everyone knows that the tax cuts for the wealthy are far greater than for anyone else. Perhaps “fair” would be if everyone made the same salary. Then taxes would be “fair.”

Update for the John Boehner/Paul Clement story on April 21: King & Spalding are bailing from their fight against the Defense of Marriage Act but Paul Clement is staying. This story is worth following! (The evangelical right thinks that this is not “fair.”)

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