Before I begin: this isn't a joke. And I'm not talking about dollar for dollar... there's no way you'll pick a random homeless man that just happens to be a hobo on his days off from sealing multi-million-dollar deals. Tax is calculated and paid as a percentage, and that's how both parties and ther spokespeople talk about it too. So who pays the highest percentage? The hobos of America, or the Limbaughs of America?
The answer, below the fold...
First of all, I want to give people like Rush a head start in this. I'm going to deliberately tie one hand tied behind my back (as Rush himself delights in saying) to give him and his ilk a fighting chance. So I'm going to use figures primarily from 2002. As the Wall Street Journal notes...
Congress and the next president will have to decide whether to extend several Bush-era tax cuts, including the 2003 reduction in tax rates on capital gains and dividends. Experts said those tax cuts in particular are playing a major role in falling tax rates for the very wealthy.
So, first of all, what does the [f]right[ened] wing say about how much tax someone like Rush would pay?
The Heritage Foundation:
The Rich Pay More Taxes: Top 20 Percent Pay Record Share of Income Taxes
Here's Conor Clarke in The Atlantic.com:
...the IRS data shows that in 2007--the most recent data available--the top 1 percent of taxpayers paid 40.4 percent of the total income taxes collected by the federal government. This is the highest percentage in modern history. By contrast, the top 1 percent paid 24.8 percent of the income tax burden in 1987, the year following the 1986 tax reform act...
And finally, Rush Limbaugh himself:
Only The Rich Pay Taxes - Top 50% of Wage Earners Pay 96.03% of Income Taxes
And if they were to plot a graph for how this looked like before the 2003 tax cuts, it would look like this...
Wow, that's all very convinci-- WAIT JUST ONE SECOND!! That graph looks all lop-sided. As if some words and data are missing. It's certainly odd there's only one thing measured in the graph. Let's look at those quotes again, this time using our WeaselWord™ Detector set to WHARRGARBL...
Top 20 Percent Pay Record Share of Income Taxes
the top 1 percent of taxpayers paid 40.4 percent of the total income taxes collected by the federal government.
Top 50% of Wage Earners Pay 96.03% of Income Taxes
There's a moral to this: don't just glance at what the [f]right[ened] wing are saying. Study it. There's always a weakness in their attacks, because they never begin from a position of strength.
Now: I don't know about you, but if you're going to mention what Real People are paying in Real Taxes in the Real World, then I'd like to see the whole picture. Just measuring Federal Income Tax, when we pay State and Local taxes in real cashy money, need to be taken into account. And fortunately for us, this is where common-sense has a knight in shining armor. Ladies and gentlemen, the Institute of Taxation and Economic Policy.
What the ITEP do is provide us with accurate, useful, and timely information regarding state and federal tax systems. And how they affect taxpayers at different income levels. The graph I posted above that just showed INCOME TAX? They take those demographic groups and calculate, state by state, how much each group ACTUALLY pays in ALL TAXES.
And it's not just adding the State and Local taxes into the mix. Oh no. They take ALL of reality into account. You see: the richer you get, the more you get to take advantage of Tax Offsets.
Just to explain quickly the difference between a Deduction and an Offset: When you claim a tax Deduction for something, you obtain a tax benefit equal to the amount of tax you would have paid on that income at your tax rate. For example, if you are on a hypothetical 30% tax rate, claiming a $100 Tax deduction will produce a tax benefit of that percentage of $100 (just $30), not the full amount. An Offset, on the other hand, is a credit against tax payable. If you are entitled to a $100 tax offset, your total tax bill will be reduced by the full $100.
Hell, rich people will even move income to tax years where they'll pay less tax, if they can. If they decide to 'take a year off', their tax level might be lower. So they'll defer the sale of their assets until they took that year off, if it saved them a few million. If you ever read the bit out of one of The Hitch-Hiker's Guide To The Galaxy books where a mega-wealthy musician is dead for the year for tax reasons... if the rich could actually do that, and be revived, they would do it in a missed heartbeat.
So the ITEP added the percentage of State and Local Tax to the graph, and then took into consideration how much each group actually Offset (not "could have Offset"... what they DID Offset). What you're looking for on this next graph is the orange line.
As you see, the mega-wealthy 1% paid under six percent of their income in taxes. The lowest 20% of the population paid almost double that.
So we get to the homeless guy and people like Rush Limbaugh. The homeless guy is buying pre-prepared food and beer, all with Sales Tax added. Sure, he's not paying property tax or garbage tax... but just on the Sales Tax alone, in your average state, the homeless guy in 2002 PAID A HIGHER TAX RATE THAN PEOPLE EARNING LIKE RUSH.
In 2003, as the WSJ mentioned, the Bush Administration with its Republican majorities pushed through the tax breaks for their wealthy friends. ITEP recently processed the figures for the tax year 2007 (the most recent figures available), and it's not looking any better for our homeless guy.
Thankfully, ITEP colors their graphs now (their 2002 one was in black and white. I added the colors myself to make it easier to see). So let's see how our homeless dude is doing against people like Rush.
STILL PAYING A HIGHER PERCENTAGE THAN THE RUSH LIMBAUGHS OF THIS COUNTRY.
So the next time someone talks about the tax burden of the rich, or how there should be a "Fair" Tax which is just a Sales Tax for everything, remember this diary. Tell the rich to man-up. And know that you have facts on your side against their greed.