[antimedia] antimedia: Tax cuts for the rich?....

[Email subscription to blog articles]

Posted by antimedia:
Tax cuts for the rich?....
http://www.antimedia.us/posts/1157599727.shtml


   ....Just another liberal lie. On September 2^nd, the Wall Street
   Journal published an analysis of the results of Bush's "tax cuts for
   the rich". Here is some of that analysis.

     First, the new data show that the bottom 50% of Americans in income
     -- U.S. households with an income below the median of $44,389 --
     paid a smaller share of total income taxes in 2004 (3.3%) than in
     Bill Clinton's last year in office (3.9%). That 3.3% is the lowest
     share of total income taxes paid by the bottom half of earners in
     at least 30 years, and probably ever. The majority of American
     families with an income below $40,000 pay no income tax at all
     today, and many of them also get a welfare subsidy from the Earned
     Income Tax Credit that effectively offsets much of what they pay in
     payroll taxes.
     By contrast, Americans with an income in the top 1% paid 36.9% of
     all federal income taxes in 2004, down slightly from 37.4% at what
     was the height of the dot-com boom in 2000. But the top 5% and 10%
     of earners saw an increase in their tax share over that same
     period, with the top 5%'s share rising to 57.1% in 2004 from 56.5%
     in 2000. If this isn't the definition of a highly "progressive,"
     aka redistributionist, tax code, we don't know what is.
     Especially instructive is what has happened to tax shares since the
     tax rate on capital gains and dividends was cut to 15% in 2003.
     These investment tax cuts have corresponded with a huge spike in
     tax payments by the affluent. Between 2002 and 2004, the income tax
     share of the top 0.1% of earners rose to 17.4% from 15.4%. A
     reasonable conclusion is that much of this increase reflects tax
     payments on capital gains and dividends -- which have soared by an
     astounding 79% and 35%, respectively, since the rate cuts.

   So the truly poor are not only paying nothing but getting a rebate on
   their social security taxes. Meanwhile, the rich are paying more than
   they ever have before, both in real dollars and in percentages of the
   total taxes paid, share of the tax burden, etc., including when their
   taxes (in terms of percentages) were much higher.
   Of course, Democrats and liberals will complain that the reason the
   rich are paying more is because they're making more -- much more --
   and the income gap is getting larger and larger.
   False. Total lie.

     Democrats and their media pals dismiss all this by saying that the
     richest are paying more taxes because they're making out like
     bandits in the Bush years. Former Clinton economic adviser Gene
     Sperling grouses that the 1990s were "an era of shared prosperity,"
     but that the Bush policies have produced "a disappointing decade on
     inequality."
     The new IRS report contradicts that fairy tale too. Let's use the
     left's own definition of fairness and examine the actual new IRS
     evidence (see chart). During the Clinton Presidency, the share of
     total income earned by the richest 1% increased to a post-World War
     II high of 20.8% in 2000, from 13.8% in 1993. By contrast, in the
     first four years of the Bush Presidency, the income share of the
     top 1% fell slightly to 19.0% from 20.8%.
     The decline in the share of total income earned was even more
     pronounced when we look at the income shares of the top 0.1%; they
     earned a greater share (18.9%) of total income by the end of the
     Clinton era than they did in 2004 (17.4%). Some of this can be
     explained by the 2001 recession and subsequent strong economic
     expansion. The rich got socked hardest when the stock market
     plunged, though the dramatic income and wealth gains in the last
     three years are again raising income shares of the middle and upper
     income groups. The income share earned by the rich was still lower
     in 2004 than during Mr. Sperling's decade of allegedly "shared
     prosperity."

   Faced with the prospect of losing their best lies due to the exposure
   of the truth, liberals are now complaining that the rich need to be
   taxed more because their conspicuous consumption is [1]spiteful and
   demeans the poor.
   If it weren't for the fact that so many of the "filthy rich" are
   Democrats and [2]support Democrats with their dollars (rather than
   [3]small donations from everyman), I might think they actually hate
   the rich.
   The facts say that Democrats work hard to reduce the tax load for
   their best donors, all the while demagoguing the Republicans for doing
   the very thing they themselves have been doing for decades -- helping
   the rich reduce their tax burden.
   Interesting how the rhetoric and the facts don't match up, huh?

References

   1. http://justoneminute.typepad.com/main/2006/09/soaking_the_spi.html
   2. http://www.opensecrets.org/bigpicture/wherefrom.asp?Cycle=2004&focus=L
   3. http://www.opensecrets.org/bigpicture/wherefrom.asp?Cycle=2004&focus=S