Two things are certain right? Death & Taxes? Well, the second one is up for debate. Does everybody really have to pay taxes? Who should pay what? There is a lot of debate on this, so in the spirit of an Election Year, and a new President, let’s examine one of America’s hot topics.
Right off the bat: I'm going to try to use Critical Thinking & Logic to talk about some Taxes. I am NOT here to talk shit, impose a bias, slander, sling mud, play the blame game, or endorse anybody.
So I’ll start with some quick FACTS:
FACT:
I’m Sick & Tired.
I'm Sick & Tired of Hearing About How:
The Rich Don't Pay Their “Fair Share”.
The Rich Don't Pay Enough Taxes.
The Rich Are Paying Less & Less Each Year.
The Poor & Middle Classes Are Paying Too Much.
The Poor & Middle Classes Are Paying More & More Each Year.
Tax Cuts Only Help The Rich. {Especially Bush’s Tax Cuts}
Tax Cuts Hurt The Poor & Middle Class.
FACT:
I’m Gonna Get To The Bottom of These Accusations & See If They Hold Up
“Fairness”:
Now the first thing that an astute reader would notice—that’s you right?—is that “Fair Share” is in quotes. It has to be. The fact of the matter is, “fair” is generally an opinion, and I can’t tell somebody that their opinion is wrong. I can disagree, but bottom line is that everyone is entitled to their own personal opinions. My goal is to inform and persuade with Logic. That said, I don’t know what you think is “fair”. I think “fair” means equal, even, or without bias or favoritism.
So just consider your definition of “Fair” & “Fairness” while reading these FACTS.
FACT:
- The 400 richest Americans paid 1.58% of the total income tax revenue in 2000. {There were 130+ million tax returns filed}
{A Tax Foundation Report from March 2006, found that: }
- Fewer than 6 in 10 Americans pay any income tax at all.
- More Specifically, the report found: that in 2006, out of a total of 136 million federal tax returns filed, roughly 43.4 million tax returns—representing 91 million Americans—will either not have to pay any taxes, or will be refunded for the full amount—or more—that they do pay. Add to this figure, the 15 million households and individuals who file no tax return at all. So all told, roughly 121 million Americans—or 41% of the U.S. population—do not have to pay a single penny to the federal income tax system.
{This total includes those who pay no tax, and those who pay some tax upfront and are later refunded the full amount of the tax paid or more}
- In 2006, 220 million Americans were eligible to vote, yet 89 million of these eligible voters—that’s 40%—didn’t have to pay any income tax. Additionally, according to the Tax Policy Center, the percent of non-taxed, eligible voters will jump to 49% when President Obama's cash credits remove another 18 million more voters from the tax rolls.
- There are 24 million taxpayers—just over 18% of everyone filing—whose income tax is less than 5% of their income and less than $1,000 annually.
- Different income groups don’t pay taxes proportional to their income. Here are some figures that clearly illustrate the situation. Shown, are the Percentage of America’s Total Taxable Income each group earned, and the Percentage of Total Federal Income Tax Revenues the group paid:
In 2003:
(% of USA’s Total Earned & Taxable Income / % of Total Fed. Income Tax Rev. Paid)
Top 1% - (19% / 37%) {Adjusted Gross Income: > $300,000/yr.)
Top 5% - (33% / 57%)
Top 10% - (44% / 68%) {Adjusted Gross Income: > $95,000/yr.)
Top 25% - (66% / 85%)
Top 50% - (87% / 97%)
Bottom 75% - (34% / 15%)
Bottom 50% - (13% / 3%) {Adjusted Gross Income: < $29,000/yr.)
- The Bottom 50% of Tax-Filing Income Earners make 13% of America’s Total Taxable Income, and account for 3% of Federal Income Tax’s Total Revenues.
- The Top 1% of Tax-Filing Income Earners make 19% of America’s Total Taxable Income, and account for 37% of Federal Income Tax’s Total Revenues.
- The Richer people are, the less they need the things their taxes pay for. The VeryRich:
-- Have fewer children, which are more likely to go to Private, not Public, Schools
-- Use Fewer Tax-Funded Programs/Services (i.e. Public Transportation, Police)
-- Don’t utilize Medicare, Medicaid, Social Security, or Welfare
So after getting the facts and hearing all this talk about “fairness”—you know, like when things are equal, even, proportional, and don’t show favoritism—I think I have to agree. It’s “NOT FAIR”. The Rich aren’t paying their “Fair Share”. They’re paying more. How can something that is “fair”, so clearly favor a certain group? Taxation in America is an odd thing…
Now For Some Examination:
And clearly, taxes are a big issue. Our new President, Barack Obama, obvious has a Tax Plan and opinions about taxes. He thinks that, “the only way we're going to make it, is by making sure that those of us who are fortunate enough to have the money actually make a contribution." He also said, “people want fairness.” They want to, "pay their share of taxes" and, "want that money allocated fairly," he said—during the 2007 Democratic Primary Debate. {Howard University June 28, 2007}
Whoa. Hold On Just One Second. There Are So Many Things Here That Confuse Me:
- Barack uses the word “fortunate”. In the Dictionary, “fortunate is defined as:
“Coming by good luck or favorable chance; Receiving some good which was not dependent on one's own skill or efforts; Lucky, favored by fortune”
So the reason that people have is money because they are lucky? Whatever happened to working hard for your money/lifestyle/possessions? Being successful has almost nothing to do with chance. To imply that people who have money, have it because they got lucky is extremely offensive. It is also very Ignorant.
- But anyways, if you are FORTUNATE enough to have money, you have to give some portion of it to the American Government? Yeah, that’s called the tax system. We already have that. So the only way we are going to make it as a nation, is if the people who have money, pay taxes? Wait! That’s Not Change! That’s More of the Same!
- People want to pay their share of taxes? They want “fairness”? They want it allocated “fairly”? Well we just heard his Opinions, so here is that Tax Plan I mentioned. Yes, there is a plan. Research done by the Wall Street Journal, confirms that. The Journal finds that in all, three out of every five voters will pay little or no income taxes under Mr. Obama's plans, and will profit when taxes rise for the 40% of taxpayers that are currently paying 95% of the total income tax revenues.
- So while, this plan sounds like the opposite of what he says people want, it’s not a stupid idea. Actually, it might just be one of the most ingenious political schemes ever conceived.
- Why? Well if you can implement a taxation system that has 40% of the population paying all the taxes, chances are, the other 60% of the population—who wouldn’t have to pay taxes anymore—is probably going to vote for you.
Genius….
Tax Cuts, More Help For The Rich & More Harm To The Poor :
When it comes to political assertions, this one is a Doozy. Does it hold up? Lets see.
FACT:
Well on average, in 1984:
The bottom 20% of income earners paid a federal tax rate of 10.2%
The top 5% of income earners paid a rate of 25.7%
The top 1% of income earners paid a rate of 28.2%.
Fast forward to 2001, after the first Bush tax cut had taken effect, the tax rates changed. On average:
The bottom 20% of income earners now paid a federal tax rate of 5.4% {About half as much as in 1984}
The top 5% of income earners now paid a rate of 28.6% {A Small Decrease from 29.7%}
The top 1% of income earners now paid a rate of 33.2% {A Slight Increase from 33%}
Well wait, this means that although the Bush Tax Cut of 2001 did lower the tax rate of the Rich{Top 5%}, that rate has still increased 4% since 1984. The VeryRich{Top 1%} are now paying 5% more than they did in 1984, and Bush’s Tax Cut of 2001, actually RAISED their rates. Bottom Line: The Rich & VeryRich are now paying more taxes than they used to.
And as for the Poor{Bot. 20%}?
Their rates have DROPPED 4.8% since 1984.
Not Convinced?
Let’s look at what share—of the total federal income tax revenue—the different earning classes pay. For example, from 1984 to 2001, the share of the total tax revenue paid by the:
Poor{Bot. 20%}, DROPPED from 2.4% to 1.1%.
Top 20%, ROSE from 55.6% to 65.3%.
Top 10%, ROSE from 39.3% to 50%.
Rich{Top 5%}, ROSE from 28.2% to 38.5%.
VeryRich{Top 1%}, SKYROCKETED from 14.7% to 22.7%.
That means overall, the Poor paid about Half as much of the federal tax burden in 2001, as they did in 1984, while the Rich&VeryRich paid about 35-50% more. Even those in the Middle-Class, often said to be hit hardest by increasing taxes, had their share drop about a Third. So the Rich&VeryRich are paying a bigger portion than before, while the portion paid by the Poor&Middle-Class has gone down.
So obviously,
Anyone who says that the tax rate of the Rich&VeryRich is dropping, and the rate of the Poor goes up, is Ignorant. Anyone who says that Tax Cuts help the Rich&VeryRich, and hurt the Poor, is Ignorant. Anyone who says that the Rich&VeryRich pay a smaller portion, and the burden on the Poor&Middle-Class has gone up, is Ignorant.
They aren’t a bad person, or even stupid. Just Ignorant.
Just In Case You’re Still Missing The Point:
Taxation rates and ratios aren’t consistent. The Rich/VeryRich{Top 5%/Top 1%} spend a much greater percentage of their annual earnings paying federal income tax, than everyone else does. The Bottom 50% of tax paying income earners—roughly 65 million taxpayers, representing more than 130 million Americans—only pay about twice as much as the 400 taxpayers who pay the most tax. Equal? No. But the Rich&VeryRich aren’t the ones getting helped here, America’s Tax Policy favors the Poor.
So can everybody stop asserting all this total bullshit? I really don’t like getting in arguments with people who don’t know what the fuck they are talking about.
So please, go learn some more about the candidates and policies that you are so in love with before you make HUGE generalizations to support them. Just because you hear things in public, or in the media, doesn’t make them true. Get informed. Make sure your opinions are backed by Logic & Correct Information.
[/rant]
Do you find these cliché phrases as ridiculous as I do? Want to know more?
Well you're in luck.
Here is a list of other reports--{written by Congressional Committees, so they are reliable}--
that can also be found at the bottom of the link posted above.
More Info For The Inquisitive Individual:
- Millions of Taxpayers Have Zero or Negative Federal Income Tax Liability. Research Report #109-21 (October 2005)
- Tax Distribution Analysis and Shares of Taxes Paid – Updated Analysis. Research Report #109-20 (October 2005)
- A Comparison of Tax Distribution Tables: How Missing or Incomplete Information Distorts Perspectives. (December 2003)
- The Misleading Effects of Averages in Tax Distribution Analysis. (September 2003)
- A Guide to Tax Policy Analysis: The Central Tendency of Federal Income Tax Liabilities in Distributional Analysis. (May 2000)
- A Guide to Tax Policy Analysis: Problems with Distributional Tax Tables. (January 2000)
For further information please see the following Joint Economic Committee studies by:
visiting the JEC Website,
Or by contacting the JEC @:
(202) 226-3234.
