As noted in a Wednesday subscription-only editorial, Nancy Pelosi already has the steeply progressive tax system Democrats want:
The Top 1% Pay 35%
Maybe our liberal friends are onto something. They keep saying the rich should pay more taxes, and it turns out the rich already are! That's one of the valuable lessons from the IRS's annual study of income tax data, just released for 2004.
Americans who earned more than $1 million in adjusted gross income paid $178 billion, or an average of $740,000 per filer, in income taxes in 2004. That's up about one-third from 2002, the year before the Bush tax cuts in marginal income-tax and dividend and capital gains rates. The wealthiest 1% of tax filers paid a remarkable 35% of all individual income-tax payments that year.
I love the following analogy, but WSJ could have gone further with it:
..... Here's a way to think of the distribution of current income-tax payments: Imagine a banquet attended by 100 random Americans. If the bill for the meal is distributed like the income tax, the richest person in the room is required to pay one-third of the tab -- or more than all 50 attendees with a below-average income. The three richest people are charged as much as the other 97. And the 30 or so lowest-income people in the room -- those with a family income of $30,000 or less -- pay nothing and eat for free.
Actually, thanks to the Earned Income Credit, many of those 30 lowest-income people get paid to eat, thanks to the rest of the people in the room.
This is by any definition a "progressive" tax system. Make that highly progressive. It's true that lower-income workers are also dunned with payroll taxes, but that still doesn't do much to alter the fact that the current tax code really does soak the rich.
It would be nice if someone else in the formerly Mainstream Media would let us know that. I don't expect to see it happen.
As to Nancy Pelosi, Charlie Rangel, et al -- Don't worry, be happy. You have what you want.
Cross-posted at BizzyBlog.com.
—Tom Blumer is president of a training and development company in Mason, Ohio, and is a contributing editor to NewsBusters
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IT IS NOT ENOUGH
December 20, 2006 - 12:32 ET by UnsaneJudging from the posts of our Leftist fellow travelers, no, it is NOT enough, and that they need to pay 100% of their income, because THAT is "fair". The Leftists have no problem with thievery - depending on the income of the victim.
"Socialism is the philosophy of failure, the creed of ignorance and the gospel of envy." -Sir Winston Churchill, British statesman (1874-1965)
understanding taxes
December 20, 2006 - 12:47 ET by vrwc13Let's put tax cuts in terms everyone can understand.
Suppose that every
day, ten men go out for dinner. The bill for all ten
comes to $100. If
they paid their bill the way we pay our taxes, it
would go something like
this:
* The first four men (the poorest) would pay
nothing.
* The fifth would pay $1.
* The sixth would pay $3.
* The seventh $7.
* The eighth $12.
* The ninth $18.
* The tenth man (the richest) would pay $59.
So, that's what they decided to do. The ten men ate
dinner in the restaurant
every day and seemed quite happy with the
arrangement, until one day, the
owner threw them a curve.
"Since you are all such good customers," he said,
"I'm going to reduce the
cost of your daily meal by $20."
So, now dinner for the ten only cost $80. The group
still wanted to pay
their bill the way we pay our taxes.
So, the first four men were unaffected. They would
still eat for free.
But what about the other six, the paying customers?
How could they divvy up
the $20 windfall so that everyone would get his
'fair share'?
The six men realized that $20 divided by six is
$3.33. But if they
subtracted that from everybody's share, then the
fifth man and the sixth man
would each end up being 'PAID' to eat their meal.
So, the restaurant owner suggested that it would be
fair to reduce each
man's bill by roughly the same amount, and he
proceeded to work out the
amounts each should pay.
And so:
* The fifth man, like the first four, now paid
nothing (100% savings).
* The sixth now paid $2 instead of $3 (33% savings).
* The seventh now paid $5 instead of $7 (28%
savings).
* The eighth now paid $9 instead of $12 (25%
savings).
* The ninth now paid $14 instead of $18 (22%
savings).
* The tenth now paid $49 instead of $59 (16%
savings).
Each of the six was better off than before. And the
first four continued to
eat for free. But once outside the restaurant, the
men began to compare
their savings.
"I only got a dollar out of the $20," declared the
sixth man. He pointed to
the tenth man "but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I
only saved a dollar, too.
It's unfair that he got ten times more than me!"
"That's true!!" shouted the seventh man. "Why should
he get $10 back when I
got only $2? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in
unison. "We didn't get
anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for
dinner, so the nine sat down
and ate without him. But when it came time to pay
the bill, they discovered
something important. They didn't have enough money
between all of them for
even half of the bill!
And that, boys and girls, journalists and college
professors, is how our tax
system works. The people who pay the highest taxes
get the most benefit from
a tax reduction. Tax them too much, attack them for
being wealthy, and they
just may not show up at the table anymore.
face piles of trials with smiles