Say it aint so, Joe!
By Nick Ragone | Related entries in NewsOk, so Joe Biden believes it’s the patriotic duty for Americans making $250,000 to pay more in taxes (btw, if Joe thinks that $250k constitutes rich in the NYC or SF metro areas, he’s nuts). I didn’t think I’d see Obama-Biden play the “patriotism card” … but whatever.
But a quickie math/history/civics lesson for Joe, free of charge.
According to the IRS, in 1984 the top 1% of wage earners accounted for 24.5% of income tax revenues; by 2001, that number had jumped to 33.2%; and last year it reached a whopping 39%. And I thought Bush was supposed to be pro-rich guy … hmmm.
Meanwhile, the bottom 50% of wage earners accounted for 6% of income tax revenues in 1984, but less than 3% in 2006. It’s the first time since the inception of the income tax that it has fallen below 3%. Not a bad a deal.
Sounds like they’ve been plenty patriotic, Joe.
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September 18th, 2008 at 11:10 pm
“According to the IRS, in 1984 the top 1% of wage earners accounted for 24.5% of income tax revenues; by 2001, that number had jumped to 33.2%; and last year it reached a whopping 39%. And I thought Bush was supposed to be pro-rich guy … hmmm.”
when the top has huge increases in the gross amount of money they make they will end up paying a higher proportion of the tax bill. This is especially true as the bottom has stagnated.
It is not about how much of the pie they provide as a group. It is about how much they provide individually in relation to there standard of living versus how much the bottom provides in terms of their standard of living. The top has a much bigger margin.
September 18th, 2008 at 11:15 pm
I’m not sure its fair to use that as your guide - wouldn’t the top 1% of wage earners be earning significantly more in later years, resulting in higher income tax revenue on percentages alone?
And, as this is essentially a repost with some interesting and pretty numbers (albeit with from a different author), i’ll restate my earlier position which is that substitute “patriotic” for sacrifice and you have a winning statement.
We as Americans haven’t really been asked to sacrifice anything for the wars in iraq/afghanistan. And for the top 1% of wage earners who are continuing to have more wealth than the bottom x% every year, why not some sacrifice?
September 18th, 2008 at 11:47 pm
First off, when it comes to raising these taxes, they want to return them to almost the levels they were under Bill Clinton.
Seriously, was anybody who makes over $250K really hurting under Bill Clinton? … or now for that matter?
As for the issue of patriotism, I’ll echo Erik a little bit here …
Our country has a been at war for almost the entire Bush Presidency. A minute percentage of our population (active, guard and reserve military) have been asked to make extraordinary sacrifices. While the rest of the country has been asked to do …
Virtually Nothing.
We’re still spending $2 Billion a week prosecuting the war on terror … and every last penny of that spending is going on the Chinese credit card.
I might be more sympathetic to the “lower taxes no matter what” argument if the people who are promoting it actually did what they promised … lower the overall cost of government.
However, its obvious that our politicians (and more accurately, the American people who put them there), whether Republican or Democrat are addicted to spending. Ask anybody. We are all in favor of less government .. as long as it’s somebody else’s programs we’re cutting … if it’s a program that benefits you personally, it’s obviously “important and useful”. Or even look at the current mess on Wall Street. As long as we’re making money, we want the government to get the hell out of the way. But as soon as things turn south, even the most fervent capitalist is suddenly in favor of a little helping hand from his good uncle sam. (but only for my investments … let those other guys eat theirs … they knew the risks)
No, it’s quite obvious that the government is going to spend money.
Given the choice between “tax and spend”, or “borrow and spend”, I honestly have a hard time seeing how Anybody can continue to defend the later with a clear conscience.
As a society we’re all too willing to attempt to “protect our kids” from the “horrors” of seeing a naked breast on tv, or reading a book about Heather’s two mommies. But, we willingly choose to overlook the Real moral hazard of leaving piles and piles of debt for our children and grandchildren to deal with.
I don’t see anything economically or morally conservative about that.
… just my opinion of course.
September 19th, 2008 at 12:18 am
Nick, this line of attack is so old and flawed it’s pathetic. It’s the, “60% of the tax burden is held by 10% of the people” mantra spewed regularly by hannity and limbaugh and others. What they don’t tell you is that the same 10% of the extremely well-to-do own 80% of the wealth in the country. So they’re not even paying their fair share of the (graduated) tax. They should be carrying 80% of the tax burden, so they’re really getting a 20% discount for being rich. You either believe in a graduated tax rate or you don’t. When I was a waiter, I tipped out my busboy 10% of what I earned. If I made 200, and another waiter made 100 we paid 20 and 10 respectively, and because I had a good night I threw a little extra. That was the ethic, and we stood by it because it just made freaking sense. I didn’t complain that I was “paying more”. I did well. I payed the same percentage and then a little more because I benefitted from all the structure that that restaurant provided me - just like all those rich benefit from all the infrastructure and manpower of the US. Yeah, please argue that the well off earned that money all by themselves and that it’s unfair that they carry a higher total tax burden. If you want to flip your nose at taxes then go live on a desert island and see how well you can do all by yourself. Asinine.
September 19th, 2008 at 5:42 am
How about some sources:
http://www.taxfoundation.org/news/show/250.html
“In 2006, the top 1 percent of tax returns paid 39.9 percent of all federal individual income taxes and earned 22.1 percent of adjusted gross income.”
It is deceptive just to say that the top 1 percent paid 39% of taxes. That could represent a progressive, regressive, or flat tax system, depending on the income of that 1%. Since the income of that 1% is 22%, it represents a progressive system, but not by the wide margin that is implied when we ignore the income number.
What is important when discussing the fairness of the system is the real tax rate (which the link above also provides). In 2001, the top 1% paid 27.5% of their income to taxes. In 2006, that number fell to 22.79 as a result of the Bush tax cuts on the rich. True, the percentage of the total tax burden paid by the rich increased, but that was a result of increased income inequality, not a more progressive tax policy.
Let me state that I am actually sympathetic to low taxes for the rich. Call me a gullable trickle-downer if you will. But I prefer to present all of the facts instead of just the ones that make me feel good about my position.
September 19th, 2008 at 6:26 am
Nick,
Once again with your jokingly partisan bullshit. You forget to mention that the richest 1% control around 40% of the wealth in this country. Oh, and when you go up to the richest 20% it rockets up to controlling 90% of the wealth. Leaving the bottom 80% controlling only 10% of the wealth. Who, given this, should be paying the Lions Share of the taxes in this country?
We should feel bad for these people? I think Obama and Biden are speaking to the 20% (who, by the way, make a lot more than 250,000 per year) of people more than those who are making around 250,000. If they had only targeted the richest 20% you whiners would be crying class warfare.
You ever notice that you rarely hear the poor bitching about taxes, rather the cost of goods. And you rarely hear the rich bitch about the cost of goods, rather taxes. There’s a reason for that. It’s because the rich don’t have to worry about the cost of goods, just protecting their money.
September 19th, 2008 at 7:16 am
John, did you read the comment directly before yours?
“In 2006, the top 1 percent of tax returns paid 39.9 percent of all federal individual income taxes and earned 22.1 percent of adjusted gross income.”
Do you need help translating that?
September 19th, 2008 at 7:32 am
John,
Leave the profanity out of it. You can easily make your point without throwing that stuff around. And, by the way, this is not optional.
Nick,
Didn’t you sort of prove Biden’s point by demonstrating that wages at the bottom have been incredibly stagnant and they simply can’t afford to pay more? I don’t know if I’d call paying more taxes patriotic, but it’s just another word for being neighborly or helping out your fellow Americans.
September 19th, 2008 at 7:46 am
@ mike mcEachran - Thank you for the great analogy regarding waiters tips. Let do some math. If the tipping pooling to the busboy went like this:
$0 - $99 = 10%
$100 - $150 = 15%
$151 - $199 = 20%
>$200 = 25%
This is a tax on productivity or if you’d like to think of on “quality of service.” Let’s assume now that this “pooling” system was not an “ethic”, but was coerced by management.
Okay, so one night when you make $157 you diligently give over your 18.60 to the bus boy. On your way home that night, you start thinking about the last table that you served and got a $7.00 tip for. They were a pain in the butt, rude, messy, took a long time, exc. and like everyone else, your time and energy are valuable — you have dependents and opportunity costs. Assuming that the average tip is $7.00, it was also your least profitable table, because you had to pay 20% of that last table to the busboy.
The next night you go back to the work. It is 7:30 pm and you are at $198 in tips (pretty good night). The same people as the night before come in. You are suppose to get off work at 8:00 but these people are going to take at least an hour, they are going to be rude and messy. It is also going to be your least profitable table and you’d like to get home to see your wife & kids. Even if you do a great job and get a 5% above average tip - that quality service is eat’in up by the higher bracket you’ve just entered.
Your ethic now tells you to throw a roach into these people’s food and get them out of the building as quickly as possible, because your ethical priority is first and foremost taking care of and being with your own family, not the bus boy.
I don’t like to pay taxes, period, but I have no problem paying my fair share of taxes. I don’t think that I should be taxed more because the goods/services that I provide are of greater value or I am more efficient or work harder than other people. That is my ethic. My ethic encourages hard work, innovation and risk taking. Your ethic punishes productivity, innovation and risk-taking.
September 19th, 2008 at 7:49 am
Keep in mind that when we discuss percentages of contribution towards income tax revenues, it’s a bell curve, meaning there will always be a bottom 50%.
The point of my post was that as a percentage of contribution, the bottom 50% has seen their totals cut in half. I don’t think it’s because their not earning as much; it’s because their tax burden isn’t as much. Same with the top end. So my question to Biden would be: how much in taxes makes one patriotic? When the top 1% accounted for 24.5% in 1984, was that patriotic enough? Was the 33.2% in 2001 patriotic enough? Was the 39% last year patriotic enough? I wish someone — anyone — could tell me where the patriotic line is? how much? I just want to make sure I’m being a good patriot, that’s all …
September 19th, 2008 at 7:53 am
I think we’re all missing a very important point. We shouldn’t be paying ANY taxes on what we earn. We should be paying taxes on what we consume.
The fact of the matter i–no matter how you slice it–that the current tax code taxes the wealthy at an order of magnitude higher than it taxes the poor. It’s sort of a quiet, agreed-upon redistribution of wealth. A little soft socialism, if you will. Biden wants to increase that redistribution. This coming from a guy who officially donates less than 1% of his own earnings to charity. Maybe one of the reasons America is a mean country in 2008.
Classic.
September 19th, 2008 at 9:28 am
Justin,
What I said would be acceptable on TV, hence my stating it in a public realm. But I will try to refrain, or write in BLEEP to protect the audience at large.
And Rich, It mentioned in passing, and no mention of the amount combined with the next 19% of wealthy people. What is truly revealing is that the Lowest 80% of people in America, only control 10% of the wealth. I think most American people would identify with that category.
September 19th, 2008 at 10:10 am
Well, as important as it is to understand all of your tax calculations, and that link from Mike was very helpful, thanks, the political point of this post is flawed.
Nick, this mocking tone the Repubs use whenever they attempt a criticism at their opponents is annoying and self defeating. Joe Biden may have used an unfortunate adjective ‘patriotic’ to make his point, but I think the previous comments have pointed out the legitimacy of his statement. When McCain goes on to mock Obama for benefiting from taking an edge on this economic downturn saying, in essence, that he’s rejoicing in people’s agony, that is much more ridiculous than a misplaced adjective. What McCain implies is that Obama actually orchestrated the catastrophe on Wall St. to get an advantage in the election, and therefore he talks to us like we’re stupid idiots. This will not win him the election
September 19th, 2008 at 2:25 pm
Or it might, because there are a lot of stupid idiots out there.
September 19th, 2008 at 5:30 pm
This isn’t a question about whether the rich can afford to pay more taxes. Certainly they can. The question is whether that’s good for the economy. Just because a group of people can afford to pay more taxes doesn’t mean it’s good for the economy. Such a view assumes that giving money to the government is the best use of that money. One could just as easily make the argument that rich people should show their patriotism by starting a business and employing poeple, or (perhaps more controversially) buying an expensive (preferrably American) car to support the auto industry.
I don’t get your point. The tax burden, as a percentage, went up for the top 1%, but it was clearly because their percentage of total income went up, not that their tax rate went up (in fact it went down).
I agree, portraying paying more taxes as “patriotic” is problematic. But I object to the way you used incomplete statistics to make your point.
September 19th, 2008 at 6:32 pm
Hi Mike,
lol, of my entire long comment, that’s the quote you pull out and respond to ???
Just curious, what do you think about deficits? Should we have a balanced budget?
If so, what specific areas of government spending should be cut?
Thanks,
Todd
September 19th, 2008 at 8:28 pm
Todd,
I didn’t respond to the rest of your comment because I think it’s a valid argument to say that if we are going to spend, we need to tax. However, I didn’t think your “the rich can afford it” argument is valid, for the reason I already wrote, which is why I responded to that point.
As for your more general point, you’re right that if we are going to spend, we need to tax, in general. However, raising taxes during a recession (or whatever you call it) is probably worse that having a deficit. As far as I understand, during past downturns in the economy, there have been large deficits after tax cuts, followed by economic prosperity that helps reduce the deficit. Even Obama admitted that he would probably delay his tax increase on the rich until better economic times.
Furthermore, the argument you make that we need to raise taxes to reduce the deficit would make more sense if those proposing to raise taxes did not already have spending plans that use that money. The tax increase would not go to decreasing the deficit. It would go to more government spending. I’d have more respect for Obama’s plan if he said, “we’re going to raise tax on the rich, and put that money toward balancing the budget.”