The rich pay more (N.Y. Times slap down)

Waterbury Republican-American ^ | October 7, 2005 | Editorial

[Graybeard58]

For years, liberals have criticized the Bush tax cuts as benefiting "the top 1 percent" of taxpayers. Now the official media mouthpiece of progressive politics, The New York Times, has narrowed the focus to the top one-tenth of 1 percent (129,000 tax filers) and concluded they are doing better than the other 99.9 percent.

Its analysis of the latest Internal Revenue Service statistics revealed that incomes of the super-duper rich rose 9.5 percent in 2003 compared with 2.2 percent for the huddled masses. That capital well invested produces capital gains is a concept the socialists at the Times have a hard time grasping. The super-duper rich did better because they did very well in the equity markets. And in 2003, their capital gains were taxed at lower rate, which explains why their effective income-tax rate, still 23.6 percent and still highest of all income categories, fell more sharply than it did for the middle class.

Buried in the Times' story, however, was an acknowledgment that the top 0.1 percent of Americans earned 7.6 percent of reported income in this country in 2003, but paid 15.3 percent of all income taxes. But those numbers were included only to justify a little class warfare that reached the stunning conclusion the super-duper rich have more money than low-income people.

But reporting income and tax-burden data of all Americans, which the Times failed to do, provides a more complete picture. It reveals just how steeply progressive the income-tax system is, even after the Bush tax cuts, and it gives Americans a chance to decide for themselves who's paying their "fair share" and who's freeloading.

To wit: The top 1 percent of Americans with adjusted gross incomes of $295,000 or more paid 34.3 percent of all income taxes in 2003. Interestingly, the Bush tax cuts were supposed to benefit that group the most, but the load shouldered by the top 1 percent actually increased by 0.5 percent from 2002, by far the biggest shift in the tax burden.

In fact, the tax rate for the super-duper rich did go down, but that allowed them to keep more of their money. Among other things, they invested it in stocks and bonds that appreciated and produced capital-gains taxes for the government. Lower tax rates, higher tax revenues. Reaganomics is not a theory.

Meanwhile, the bottom half of wage-earners with incomes of $29,000 or less paid 3.46 percent or slightly less than the share they paid the year before.

The most jarring statistics, however, are that 25 percent of wage-earners pay 83.9 percent of income taxes -- almost no reasonable person would consider that their "fair share" -- and that families with incomes of $57,300 or more are considered "rich." A few families making that kind of money in Connecticut are eligible for discount health insurance under the HUSKY program.

Certainly, "the rich" have a social obligation to pay more taxes. But everyone should be asked to pay something if only to keep them interested in the way the government spends money.

[xcamel]

The Top 50% pay 96.54% of All Income Taxes
(The top 1% pay more than a third: 34.27%)

October 4, 2005

This is the latest data for calendar year 2003 just released in October 2005 by the Internal Revenue Service. The share of total income taxes paid by the top 1% of wage earners rose to 34.27% from 33.71% in 2002. Their income share (not just wages) rose from 16.12% to 16.77%. However, their average tax rate actually dropped from 27.25% down to 24.31%

*Data covers calendar year 2003, not fiscal year 2003 - and includes all income, not just wages, excluding Social Security

Think of it this way: less than 3-1/2 dollars out of every $100 paid in income taxes in the United States is paid by someone in the bottom 50% of wage earners. Are the top half millionaires? Noooo, more like "thousandaires." The top 50% were those individuals or couples filing jointly who earned $29,019 and up in 2003. (The top 1% earned $295,495-plus.) Americans who want to are continuing to improve their lives, and those who don't want to, aren't. Here are the wage earners in each category and the percentages they pay:

The top 1% pay over a third, 34.27% of all income taxes. (Up from 2003: 33.71%) The top 5% pay 54.36% of all income taxes (Down from 2002: 53.80%). The top 10% pay 65.84% (Up from 2002: 65.73%). The top 25% pay 83.88% (Down from 2002: 83.90%). The top 50% pay 96.54% (Up from 2002: 96.50%). The bottom 50%? They pay a paltry 3.46% of all income taxes (Down from 2002: 3.50%). The top 1% is paying nearly ten times the federal income taxes than the bottom 50%! And who earns what? The top 1% earns 16.77% of all income (2002: 16.12%). The top 5% earns 31.18% of all the income (2002: 30.55%). The top 10% earns 42.36% of all the income (2002: 41.77%); the top 25% earns 64.86% of all the income (2002: 64.37%) , and the top 50% earns 86.01% (2002: 85.77%) of all the income.

[petercooper]

bttt

[Graybeard58]

Thanks for that graphic, I've been looking for it.

[xcamel]

credit: rushlimbaugh.com (sorry, forgot that)

[aimhigh]

To limit the payment of taxes to income taxes is bogus. The study needs to include SSI and Medicare.

[God luvs America]

bump

[misterrob]

Certainly, "the rich" have a social obligation to pay more taxes. But everyone should be asked to pay something if only to keep them interested in the way the government spends money. No they don't. No one has an "obligation" to pay more taxes.

[Fledermaus]

Lower tax rates give incentive for "the rich" to create more taxable income. They aren't rich because of income, they are rich because of wealth.

Raise the tax rates too high and they'll will cease creating taxable income and move back into long term equities.

If you look at the IRS data from the late 90's, the massive influx of cash into the US Treasury came mostly from the lower capital gains rate and not the raising of income tax rates ala Clinton.

[xcamel]

Why - both are only a "drain" on the poor - none of which have ever created one single job while poor. However, the poor do become "rich" now and then, and turn into true anti-tax conservatives.

[satchmodog9]

The quartermillionaires really get the shaft.

[xcamel]

Yup, in the worst way. Worse yet, most QM's are a half-million in debt.

[R.W.Ratikal]

As far back as I can remember the Democrats have voted for tax increases saying that the rich would now pay their fair share of taxes.

As far back as I can remember the Democrats have voted against tax cuts saying that only the rich would benefit.

Both are outright lies, as any taxpayer can tell you.

This is called Class Warfare, the fundamental tactic of Marxism.

[Snapping Turtle]

Ping!

[adorno]

I want to be taxed like a millionare or the super rich.

[dr_lew]

I want to be taxed like a millionare or the super rich.

I'm sure if you hired a crack team of lawyers and accountants for a few hundred big ones per annum you could lower your tax bill substantially.

[DB]

No you don't.

A "millionare" isn't what it use to be 20 or more years ago.

[DB]

Why?

Do you expect the "rich" to pay for your social security and medicare?

[aimhigh]

Do you expect the "rich" to pay for your social security and medicare?

I'd eliminate both. But as long as they're doing a study of taxes, it should be honest and include them all.