Posted on 09/27/2003 12:01:18 PM PDT by Action-America
Sept. 26, 2003, 11:43PM
By DAVID CAY JOHNSTON
New York Times
The incomes of the top 1 percent of Americans fell 18 percent in 2001, as did their income taxes, shaving $66 billion off revenues and showing how dependent the federal government has become on its wealthiest citizens.
Overall, Americans had 2.8 percent less income in 2001 than in the previous year. But federal tax revenues fell 9.4 percent because the incomes of those at the top, who pay the highest tax rates, dropped so much more than the average.
The top 1 percent reported $1.09 trillion of income, down from $1.34 trillion in 2000, according to data posted by the Internal Revenue Service on the Internet on Friday without announcement.
The minimum income to reach the top 1 percent was $293,000 last year, down from $313,500 in 2000, but almost identical to the threshold in 1999.
The sharp decline in incomes at the top "is obviously due to the collapse of the stock market boom and the recession," said Bruce Bartlett, a senior fellow at the National Center for Policy Analysis, a lobbying group.
The combination of a sharp drop in income, if sustained for several years, and the tax cuts that were enacted this year could result in another sharp drop in taxes paid by the top 1 percent. The top rate on capital gains and dividends has been cut to 15 percent from 20 percent.
Taxes paid by the top group fell to $300.1 billion in 2001 from $366.9 billion in 2000. The decline accounted for the bulk of the $92.7 billion drop in individual federal income tax revenue in 2001.
The large drop in incomes caused the share of income taxes paid by the rich to shrink nearly a tenth. The share of total taxes paid by other groups consequently increased. The top group paid 33.9 percent of all income taxes, down from 37.4 percent in 2000.
The share paid by the next wealthiest group, the 4 percent of Americans just below the top group, grew slightly. The bottom half of Americans, the 64 million households making less than $28,000, accounted for a somewhat larger share of total taxes.
The biggest increase, however, was among those making $56,000 to $92,800, whose share of all income taxes increased to 18 percent from 16.7 percent. They accounted for a larger share of income taxes than the very wealthiest, the top tenth of 1 percent of Americans who paid 16 percent of the government's total income taxes.
Isaac Shapiro, an analyst at the nonprofit Center for Budget and Policy Priorities, said the tax rules set by Congress mean broad swings in revenues as the economy moves through good times and bad.
The IRS also released data on the top tenth of 1 percent, the most prosperous 129,000 households. This group had so much income that they made almost as much as the other nine-tenths in the top 1 percent.
This very top group, representing one in a thousand households, had $505 billion in income, for an average of $4 million each. To be counted among this group one needed an adjusted gross income of at least $1.3 million, down from $1.6 million in 2000.
This small group received almost $1 of every $12 earned by all 129 million U.S. households.
Bartlett, an advocate of lower taxes, noted that the Bush tax cuts in 2001 did not cause the drop in taxes by the wealthy.
"It is pretty clear that the tax cut played no role by the fact that the average tax rate paid by the top 1 percent actually went up slightly," he said.
This group paid 27.5 cents in taxes on each dollar of reported income, up a sliver of a penny from the previous year. This increase was caused by a drop in income from capital gains, which are taxed at a much lower rate than wages.
Overall, the tax rate fell, with Americans paying the government 14.2 cents in taxes on each dollar of income, down from 15.3 cents in 2000.
They aren't there for your benefit, nor should they be. What do we need YOU for? Nothin'. But so? Your rights are nevertheless your rights, whether we need you or like you, or don't.
Work for cash. Work for trade. Work for goods. Work the underground economy - it's way past time we make a serious effort to take down the government parasite system.
Screw them and their "need" to squander 2.5 Trillion every year (plus the state-level parasites, of course) - and growing ever more bloated by the day.
REALLY?? If something becomes "the norm" and everybody does it... then it's fine? That's your criterion? What are you, 16?
Corporations that make profits in the US but then seek offshore tax havens are basically dishonest.
This is what is dishonest:
Dr. James Payne of the University of California, Reason Magazine '94; found that in addition to direct taxes we also pay huge, hidden taxes including:
- Tax compliance costs: record keeping, reporting, filling out forms, and learning about tax regulations.
- Costs of tax enforcement: resources expended in responding to the tax authority. Each act of tax enforcement--each audit, each notice, each levy--entails a burden for the citizen subject to it.
- Tax disincentive costs: the loss of production because of the discouraging effect of taxes on investment and labor.
"When the overhead costs are added together, (24 percent compliance costs, 33 percent disincentive costs, and 8 percent other costs), they total 65 percent of tax revenue."
And even that figure doesn't include the cost of import duties, license fees and other government regulations. For a typical U.S. family, the real cost of taxes and regulations as a percent of gross income is at least:
Federal taxes 23.6%(taxfoundation)
State & local taxes 10.2%(taxfoundation)
Overhead costs 21.9%(James L. Payne)
Regulatory costs 13.0%(M.W. Hodges)
On average more than 68% of one's income is now consumed by government through tax collections, compliance costs & regulation.
For the business or the those with above average incomes the burden is overwhelming. That is why they leave.
The Russian flat tax has been so successful that even American politicians might learn the right lessons. Let’s look at the evidence: Russia’s economy has expanded by about 10 percent since it adopted a flat tax. That may not be spectacular, but it’s better than the United States, and it’s very impressive compared to the anemic growth rates we see elsewhere in Europe.It also appears, conventional wisdom aside, that a low tax rate doesn’t mean less money for government. Over the last two years, inflation-adjusted income tax revenue in Russia has grown 50 percent. Why? Because people are willing to produce more and pay their taxes when the system if fair and tax rates are low -- exactly what Ronald Reagan predicted when he triggered America’s economic boom with lower tax rates 20 years ago. Ironically, the former communists in Moscow now understand supply-side economics, yet liberals in Congress are still relying on the politics of hate-and-envy.
Interestingly, the flat tax is just one of several positive reforms enacted by President Putin. Russia also has reduced the corporate rate of tax from 35 percent to 24 percent. (U.S.-based companies still pay 35 percent, the second-highest corporate tax among industrialized nations). Small businesses also get better treatment. The old system with high tax rates has been replaced by a new system where companies can choose either a 6 percent tax on gross revenue or a 15 percent tax on profits.
The Russian flat tax has been so successful that even American politicians might learn the right lessons.
Better be careful what you ask for, you might get it, the russian 15% flat tax is only a small part of the whole picture:
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RUSSIA: PART TWO OF THE RUSSIAN FEDERATION TAX CODE August 10, 2000
Alexander Chmelev and Evgeny Astakhov Baker & McKenzie, Moscow Office
Sent by BISNIS, U.S. Department of Commerce, http://www.bisnis.doc.gov Judith_Robinson@ita.doc.gov, Tel: 202-482-2293. BISNIS sends this report as a courtesy to the U.S. business community. This is not to be construed as endorsement or sponsorship of any information or group. On August 5, 2000, Russian Federation President Vladimir Putin signed into law four chapters of Part Two of the Russian Federation Tax Code and Federal Law No. 118-FZ ôOn the Implementation of Part Two of the Russian Federation Tax Code and Amendments to Certain Federal Laws on Taxationö (the "Implementation Law"). The chapters of the Tax Code signed into law by the President are Chapter 21 - VAT, Chapter 22 - Excise Taxes, Chapter 23 - Personal Income Tax, and Chapter 24 - Unified Social Tax. These four Chapters and the Implementation Law were officially published in Rossijskaya Gazeta on August 10, 2000, and, with few exceptions, will become effective on January 1, 2001. The most sweeping changes introduced into the Russian tax system by this new legislation are as follows: 1. VAT (Chapter 21 of the Tax Code) Although Chapter 21 of the Tax Code does not change VAT rates or the general VAT structure, it contains numerous provisions, which will significantly affect most businesses in Russia. Most notably, Chapter 21 substantially modifies the "place of service" rules, which generally determine whether for VAT purposes a particular transaction has occurred in Russia and is, therefore, subject to Russian VAT. Effective from July 1, 2001, Chapter 21 also will treat export sales to CIS countries in the same way as sales to all other foreign countries, and will exempt them from VAT. On the downside, Chapter 21 will repeal a number of long-standing and important VAT exemptions, including an exemption for license fees for the use of intellectual property (such as, patents, copyrights, and trademarks), and will significantly narrow the VAT exemption for pharmaceuticals. 2. Personal Income Tax (Chapter 23 of the Tax Code)
Chapter 23 of the Tax Code will replace the current progressive tax rates ranging from 12% to 30% with a flat tax rate of 13%. This 13% rate will apply to almost all categories of income earned by individuals who are Russian tax resident. A 30% rate will apply to dividends, and to any Russian source income received by individuals who are not Russian tax resident. A 35% rate will apply to income from gambling, lottery prizes, deemed income from low-interest or interest-free loans, certain insurance payments, and excessive bank interest. 3. Unified Social Tax (Chapter 24 of the Tax Code) Chapter 24 of the Tax Code will replace the existing employersÆ contributions to four separate social benefit funds (which currently are imposed at an over-all rate of 38.5%) with one unified social tax. This unified social tax will have a regressive tax scale from 35.6% to 2% of an employee's salary with the lowest rate applicable to the portion of an employeeÆs annual salary in excess of 600,000 Rubles (approximately US$22,000 at the current exchange rate). It should be noted that under the Implementation Law, as a transition rule, the lower rate of this tax will be 5% rather than 2% during 2001. 4. Excise Taxes (Chapter 22 of the Tax Code) As a countermeasure to reducing rates of other federal taxes, Chapter 22 of the Tax Code provides for an increase in excise tax rates for gasoline and other oil products by almost 300%. It also provides for a less dramatic increase of excise tax rates for tobacco products and certain passenger cars. 5. The Implementation Law a. Turnover Taxes Effective from January 1, 2001, the Implementation Law repeals the Housing Fund Tax of 1.5% and reduces the Road Users Tax from 2.5% down to 1% and completely repeals the Road Users Tax effective January 1, 2003. These taxes are imposed on gross sales and have been among the most onerous taxes on business in Russia. b. Regional Tax Concessions The Implementation Law reconfirms the right of regional authorities to provide tax exemptions for the regional portion of federal taxes retroactive to April 1, 1999. This reconfirmation resolves an issue that arose in 1999 as to whether the regional portion of profits taxes could be reduced pursuant to regional incentive laws. c. Profits Tax Rate Apparently in compensation to local budgets for the cancellation of turnover taxes, the Implementation Law authorizes municipal governments to introduce an additional "municipal" profits tax of up to 5% of a taxpayer's taxable profits. Thus the maximum overall profits tax rate may be increased from 30% to 35%. This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS) |
I think you mean Delaware.
I didn't hear any moaning. The folks expressed satisfaction with their condition, why would they advocate change?
As to participation of FR, this is the most intellectually stimulating site on the web.
Whew! You can say that again. The exhaustion of making sure everyone was happy so they wouldn't leave followed by the heartache of letting them go due to a lack of business. Dang! I don't know that I ever want to go through that again.
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