Who gets socked now? If your answer is the rich that highlights our disagreement over how much they pay in aggregate versus the middle class. Remember there are lots more of the middle class than the rich.
Dear Mind-numbed Robot,
Who gets socked now? Predominantly the upper middle class, with the rich contributing a very significant amount.
If the share of taxes paid by the rich declines significantly (and it will under the NRST), and the poor continue to pay, effectively, no tax (that IS the point of the prebate, right? to give back everyone the taxes they would pay at something around poverty level income), then, to stay revenue neutral, the middle class, especially the upper middle class, will pay more of the tax burden.
From Rush Limbaugh's website, I see a set of graphs that relate some interesting information. In 2001, the top 1% of households, by income, paid about 34% of the federal income tax collected. They paid 34% of the federal personal income taxes on about 17.5% of all personal income that year. The average tax rate on the top 1% of households was, in 2001, 27.5% in personal federal income taxes. Yup, 27.5% of income paid, on average, by the top 1% of households, in federal income taxes.
Yep. They paid about twice as much in federal income taxes, on a percentage basis, as the other 99% of the population, on their income. That's the rich.
However, whether you think they're paying ENOUGH or not isn't the point.
Whether some rich people manage to pay nearly no taxes at all or not, that isn't the point, either.
The point is, these folks pay a huge chunk of the taxes being paid. If they wind up paying less (and they will), then someone else will be paying it.
Interestingly, even if these folks spent 100% of their incomes on 100% NRST taxable purchases, their overall level of federal taxation would fall. They currently average, as a group, 27.5% of their income in federal income tax, and if they spent 100% of everything they earn on completely taxable purchases, they'd pay 23% of their income in the national retail sales tax. LOL.
However, it's much more likely that these folks will spend half or less of their income on taxable stuff. Meaning, the amount of their income that winds up in the hands of the US Treasury will fall from 27.5% of their income to around 12% of their income. That turns out to be an overall tax reduction for the rich of several hundred billion dollars per year.
Now, who will pay those extra hundreds of billions of dollars?
We know it won't be the bottom 50% of folks (these folks already pay nearly no income taxes, and under the NRST, with the prebate, will continue to pay no net taxes). I guess it's that 49% that goes from just above the median household income, up to folks that don't quite crack the top 1%.
I suspect, more precisely, it will be folks from about the 60th or 70th percentile to around the 98% percentile.
I don't have a MORAL problem with that result. But the rest of folks (especially the folks who wind up paying more) may have a PRACTICAL problem with it.
sitetest