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%.
Aha! But the rich earn more!
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.
But… but… how could this happen in George W. Bush’s Amerika?
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.
Works for me.
Update: But what about the profligate spending!??!?11??
It works for me, too, Lex!
What about Mr. Robinson’s assertions? There are several excellent questions posed to him by the writer and commenters. Why not use GNP as opposed to dollars? His erroneous chart fails to account for inflation and one other small point: the chart begins in 1997 when Clinton of the “angle of the dangle” was President.
So, how do the Bush-haters combat the facts? Take a look at this comment, posted in response to some of the salient facts:
“This kind of fine-grained analysis doesn’t matter, percentage of GDP and all that complicated stuff. The admission ticket to any serious policymaking discussion is to say that Bush is an idiot and a failure. If you don’t say that, it’s like suggesting that you don’t care about diversity or the planet, and no one will listen to you.”
Pure “stick-your-head-in-the-sand”, don’t bother me with the facts, hate. Getting down to wallow in their oozey green slime isn’t something any thinking person would want to do.
Please tell me, though: where does this extreme thinking come from? What branch of the far, far left authors such vitriol?
Sorry, that should have been: “GDP”.
That’s a great article, nicely encapsulating all the things that drive me nuts about the left’s “class warfare” tax policy.
Thanks for the link, Lex.
There is a point to be taken from the comments: That is that the discussion seems always to be from the different sides using different measuring sticks. Therefore, what is needed is a discussion that either begins with an agreed group of statistical measures, or the author, as in the case of this particular fine article, needs to address the critics using their terms / stats or to say why they are wrong for relying on them.
When these things are published and then criticized, I’m always bothered by the thought that the parties are using their own versions of the stats to “win” debate points, but not solving the problem.
it’s hard to argue trickle down benefits with those that believe in what I call wealth redistribution. they would rather have the government tax more those who earn more and give it away to those that did not earn it. I call it socialism/communism and having lived under it until 12, I found it somewhat distatesfull to say the least.
This is one of those instances where past performance is a pretty good indicator of future performance. cut capital gains tax, cut inheritance taxes, and income (tax) increases. And not very beneficial for the whole populace as a whole.
Along the same lines, I think cutting the tax on income derived from overseas affairs should be cut from the current rate of 35%. Having a period where any income brought into US at a rate of 5-10% would bring in some much needed capital.
Claudio
Sadly, the criteria desired will usually be whatever set that gets you closest to your goal.
Going to be hard to get everyone to agree on a single set of stats.
Drat.
What is interesting to me is how the debate is over the Evil Rich. Aren’t they the ones who build businesses and create jobs? One might think that’s, you know, a real talent others might want to emulate.
Yet they’re hated, as if some guy with a squeegee at a stop light is going to offer you a job with benefits because his taxes were reduced a bit. But that Carnegie fellow will just stuff it in a mattress and take it to his grave, you just watch, so we’d best take the lion’s share of it now before he wises up and moves to Ireland.
I mean, nobody seems to care that the Kennedy’s are rather wealthy and the three politicians in the clan did nothing to earn that inheritance. And yet Joseph P. Kennedy apparently garnered part of that wealth by practices in the stock market that are now illegal (and were perfectly legal then, so no foul), so we hear howls of anguish about Enron and Worldcom but not a one about market manipulation enriching the Kennedy’s.
He also made the bulk of his fortune in real estate, specifically in Chicago. I don’t hear a lot of folks complaining about windfall profits when your real estate value appreciates and you get to charge a higher rent to compensate, but let one out of a thousand re-finance their mortage and throw in some extra to purchase a couple of cars and maybe some remodeling, and made it a no-principle loan for 5 years because it’s only going to appreciate in value… Suddenly their bad decision is *my* problem because I, as a taxpayer capable of paying my mortage, get to bail them out?
The tax code is the single greatest power our government has over us. It is also the single greatest failure in our economic history. I simply point to your attention the boomers are starting to retire, they’re going to need about $44 trillion dollars from Social Security. Total GNP of the USA is around $13 trillion. That’s like buying a $200K house on an annual pre-tax income of $50K with a 10-year note. Yeah, going to make things tight. Have to water the soup and scramble the eggs for a while. And hope they don’t need anything from Medicare and Medicaid, ’cause that just isn’t in the budget this month.
Back in the late 60′s Congress should have realized that the boomers were boinking like rabid weasels but, thanks to a new pill, weren’t producing kids the way folks were previously. And were living longer. Which might have some implications on a Ponzi scheme. Congress has been kicking that can down the road ever since, hoping it explodes after they’ve left office.
Which, shirking a duty so another has to take it? Lex has a perfect description of that behavior.
It’s interesting that there’s a law against holding Congress in contempt. By my figuring, over the last 40 years or so, their behavior should make that the default position.
– Max
I can see why the Left always talks about the greedy rich. They get huge political clout for little invested when the facts are obscured. They literally make so much noise about class warfare that no one notices the fact that there are some
big money players on the Democrat side.
Who wouldn’t want the “rich” to pay?
Problem is that most Leftish politicians and centers of influence come from the so-called “Old Money”. Nancy Pelosi and Ted Kennedy don’t shop for their own groceries. They also don’t pay taxes. By the way, Congress usually exempts themselves from any laws they foist on us taxpayers.
If your family derived money is hidden in various trusts and Municipal Bonds then you won’t pay tax on the interest generated. If I had 250M in something making 1.5% (Which as a retired E6 I barely don’t) we would be talking about an annual income of over 3.75M all tax free. No jobs created here! Would this qualify as the filthy rich?
It is just too easy to use the politics of envy to attack the creators of jobs and wealth. Because the Old Money crowd usually doesn’t remember how their families earned the wealth to begin with and prefer working a cushy Government job.