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You've all heard it in one form or another, the lie that either says straight out that half of all Americans pay no taxes or slightly less horrendous lie that half of Americans pay no income tax, or the  the lie-by-omission that half of Americans don't pay any federal income tax.

Too often, the media and our elected representatives allow those lies to go unchallenged.  

Too often, so do we.

It would be good if we could avoid repeating their talking points.  

It would be even better if we knew how to rebut them and did so, with great vigor.  

So let us begin.

The truth is that the portion of government revenue to which the GOP Talking Point is referring (federal income tax) is just a shade over 20% of the total government revenue (all levels) for 2010.  

It's like saying that the Top 1% pay almost no taxes just because they pay an effective rate of about 1.6% on their income on Social Insurance contributions while the lower and middle income folk pay from 8.5% to 9.6%.  Just because those with 20% of the income pay only a 4% share of the Federal Social Insurance contributions (aka Payroll Tax) doesn't mean they pay no taxes.  (Even the estimated 10,000 HINT-Americans earning over $200,000 in 2007 who paid no federal income tax tax probably paid a little of some kind of tax, somewhere.)  

I would challenge anyone to produce evidence of any appreciable number of people who pay Zero Taxes (Federal,State, Local).  

As to all Federal Taxes, it is estimated that the number of households that actually pay Zero Federal Taxes is about 10% .  

So, if the Republicans are going to call half of all Americans free-loading bums at the same time they are shifting a greater tax load onto those very same people, perhaps they ought to be confronted with whatever degree of civility you think appropriate under the circumstances.  

So where does this claim that half of Americans pay no taxes come from?   As usual with Republican Talking Points, with sufficient archeological forensics, you often find the skeletal remains of some truth from which the myth was built.

The historic trend has indeed excused an increasing number of households from paying Federal Income Tax (primarily because their income is too damn low).  

The stimulus tax cuts for those below $250,000 and disproportionate impact of the recession on lower and middle income households have combined to increase the number that pay no Federal Income Tax last year and this year.  In fact the incomes of the bottom 50% are so low that the effective rate for that entire group in 2008 was 2.59% according to the Tax Foundation (who doesn't even bother breaking down that category any further.)

Does that mean they pay NO TAXES?  No.

First:  Income Tax is Not the Only Source of Government Revenue

Federal Income Tax amounts to only 41.5% of Federal Revenue for 2010.  ($899 B)

Federal Social Insurance Contributions amount to 40.0% of Federal Revunes for 2010.  ($865 B)

The latest distributional data I've found gives us a rough idea of who pays what of those two:

Effecitve Tax Rate Distribution by Income Category 2006

                        Fed. Income Tax %           Payroll Tax %

Lowest 20%             -6.6                          8.5
Second 20%             -0.8                          9.2        
Third 20%                  3.0                          9.4
Fourth 20%                6.0                          9.6
Highest 20%            14.1                          5.8

Top 10%                  16.0                          4.6        
Top 5%                    17.5                          3.4
Top 1%                    19.0                          1.6

Share of Tax Liabilities by Income Category 2006


                       Fed. Income Tax  %           Payroll Tax %

Lowest 20%             -2.8                          4.4
Second 20%             -0.8                         10.3        
Third 20%                  4.4                         16.6
Fourth 20%              12.9                         25.0
Highest 20%            86.3                         43.5

Top 10%                  72.8                         25.7        
Top 5%                    60.9                         14.5
Top 1%                    39.1                           4.0


[From my recent diary concerning how the $2.3 Trillion SocSec Trust Fund balance was collected:  Either Leave Social Insurance Alone Or Pay Us Back Our $ 1 Trillion.   ]

Second:  Federal Revenue amounts to approximately One Half of the Revenues for all Levels of Government Within the US.  (Putting Fed Income Tax at a shade over 20% of the total revenue for all levels of Govt.)

Holding (or pushing down) the federal income tax end of the Governmental Revenue Water Balloon has shifted revenue collections to the State and Local Governments as they seek to pick up the slack and meet the unmet needs of their communities.  For 2007 the Tax Policy Center has calculated that about half of all reveue collected by all governments within the US were collected by the Federal Govt and about half were collected by State & Local Govts.  

As with most states, , my state (Minnesota) has a regressive tax system where the rich pay a lower effective overall tax rate (State & Local) than the upper-middle, middle, lower-middle and low income categories. (This is often even more severe for local taxes where the current year shift is most likely to occur.  And the richer they are the less that effective rate becomes, so that you get these kind of results:

Back in 1988, the effective rates paid for all our State and Local taxes and fees etc, was within a few tenths of a percent between all categories of income.  It wasn't a progressive system, but at least it wasn't regressive.

Since then, things have changed.

The effective State/Local tax rates for the middle and upper middle have increased 38% since 1988.*  

That effective  rate for the Top 10% have gone up only 14%.  

For the Top 5% they went up only 11%.

For the Top 1% they went up only 9%.

The Middle now pays an effective tax rate that is over 12% (12.1% - 12.3%).

The Top 10% pays only 10.4%.
The Top 5% pays 10.1%.

The Top 1% pays an effective rate of only 9.7%, over 20% lower than the effective rate paid by the Middle.

So next time the Republicans try to tell anyone that half of all our fellow citizens are LINT (low income no taxes),  be prepared to tell them to stop their whining because that whole attitude towards Americans and that whole approach to shifting the load by hiding the truth is about to end.

Sources:  

2011 MinnesotaTax Incidence Study(Using February 2011 Forecast)
As to Effective State/Local Tax Rates by Income:
Table 1-8 Pg 34/160 pdf  (Effective Tax Rates by Population Decile
All Taxes, 1988–2008, 2013 (est.))

As to Ranking of State Tax Systems by Progressivity:
Table 4-13 Pg 79/160
ITEP “7-Point” Suits Index by State
Non-Senior Households in 2007

* As to 2010 Reveune from Federal Income Tax and Social Insurance Contributions:
Congressional Budget Office resources:Table 4-1 CBO’s Projections of Revenues

Pg 105/192

It might be interesting for you to compare how your State has become more or less regressive in the last years.

Who Pays? A Distributional Analysis of theTax Systems in All 50 States (2003)

Who Pays? A Distributional Analysis of theTax Systems in All 50 States (2009)

Originally posted to Into The Woods on Mon Apr 18, 2011 at 02:27 PM PDT.

Also republished by Community Spotlight.

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Comment Preferences

  •  Tip Jar (127+ / 0-)

    We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

    by Into The Woods on Mon Apr 18, 2011 at 02:27:29 PM PDT

  •  Tipped and recc'd. (35+ / 0-)

    I give this lecture (using mostly the same data sources!) every semester, and I'm always shocked at how wildly the students' preconceptions on these matters differs from reality.  I'd say it's the single biggest disconnect of any topic I cover.  

    It doesn't help when the media nearly universally gets it wrong, as in this morning's widely distributed AP story.

    Really? A trendy expression of befuddled incredulity? Really?

    by cardinal on Mon Apr 18, 2011 at 02:53:00 PM PDT

  •  Excellent points but a question about (5+ / 0-)

    your FICA (SS and Medicare) tax rate chart. The rates for all but the upper incomes seems very low. The full FICA tax is 15.3%, half paid by employee and half by employer. If the employer were not paying half you that money would be available to be paid as salary. I understand at the lower end the effective rate could be reduced by receipt of a tax credit. But for everyone else earning only salary up to the max, the rate really is 15.3%

    Further, affiant sayeth not.

    by Gary Norton on Mon Apr 18, 2011 at 03:06:48 PM PDT

    •  Except for Self-Employed Employer (15+ / 0-)

      pays that amount.

      They then take it as a deduction against their corporate taxes.  

      I am not sure how the Congressional Budget Office (or their source for this data (IRS or Census) dealth with the self-employed for whom the entire liability essentially falls on the individual (with again some deduction from their income tax).  

      But just as the employers' expenses for group health insurance are not usually attributable to employees wages or incomes (even though a case can be made that they should) the employer portions of Social Insurance contributions here are clearly not attributed to the employee but rather the employee.

      This is consistent with comparative data I've seen for other countries and is (or should be) a factor when comparing rates of corporate income tax, since many other countries require a significantly larger contribution by employers towards those countries'  "social insurance" programs.

      If the employer were not paying half you that money would be available to be paid as salary.

      I'd make a major distinction between "available to be paid" and "likely to be paid" in that statement.

      Given the record-breaking corporate profits and not-so-record-breaking rates of wage increase or job growth, I don't think one necessarily means the same as the other.  

      That argument was made for McCain's health care plan, but there was significant skeptism that the money would actually flow through to the employee - especially with publicly traded companies who must pray to Wall Street 5 times each day.

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Mon Apr 18, 2011 at 03:37:34 PM PDT

      [ Parent ]

  •  To emphasize the regressive nature (14+ / 0-)

    of state and local taxes - you have a link to an excellent PDF

    Really, state and local taxes are completely regressive!

    Besides, anyone who ever buys a gallon of gasoline has just paid both state & federal taxes!!

    •  I really can't think of anyone who pays Zero Tax. (11+ / 0-)

      And as I've commented before, the local level is the most regressive in most cases, so increasing the shift downward as we've been doing will only make the overall system more regressive while creating more disparity in our systems and the quality of their services.  

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Mon Apr 18, 2011 at 03:49:56 PM PDT

      [ Parent ]

      •  (cough) GE (cough) (1+ / 0-)
        Recommended by:
        Roadbed Guy
        •  Like the diary said there is much (1+ / 0-)
          Recommended by:
          Into The Woods

          more than federal taxes.

          Local Taxes

          GE should be paying something for federal but no one escapes ALL taxes.

          Preemptive war is like committing suicide for fear of death

          by thestructureguy on Tue Apr 19, 2011 at 09:18:16 AM PDT

          [ Parent ]

        •  Even GE pays taxes. Just not income tax. (0+ / 0-)

          They pay sales tax.  They pay property tax.  

          Etc. Etc.  

          For purposes of this discussion that's important.

          For purposes of Corporate Income Tax, they not only pay nothing even though they have huge profits, they get a credit to apply to their next year or last year's income tax.  

          We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

          by Into The Woods on Tue Apr 19, 2011 at 12:46:35 PM PDT

          [ Parent ]

          •  Not defending GE BUT (1+ / 0-)
            Recommended by:
            Into The Woods

            GE Capital took a bit hit in the recession, so they have losses to carry forward. If you think that's a loophole then say so. GE is big in financial markets as well as building Jet Engines.

            Many businesses may have loss carry forward, depending on their market and business conditions. If you think that's a bad strategy or motivation for  for business, then have the law changed. I think it's high time myself to look at how business is taxed, both on overall rates and on technicalities, but that's a different discussion than "GE is Cheating"

            That GE lost money big time in lending markets should not be news. Almost everyone took a hit two years ago, and causes lower tax revenues - our current problem. Ideally, GE Capital should have 1) seen it coming and 2) lobbied congress to make the regulation better not looser, because the out of control economy wound up costing them a whole lot of money, while certain hedge funds and capital markets / investment banks got off scot-free.

            Without geometry, life is pointless. And blues harmonica players suck.

            by blindcynic on Tue Apr 19, 2011 at 01:25:31 PM PDT

            [ Parent ]

            •  First, You Said "Cheating" I did not. (1+ / 0-)
              Recommended by:
              cameoanne

              I don't know whether the accounting for loses on lending or derivatives losses and bailout provisions makes sense and at this point I'm not assuming  the rules are bad (which would not surprise me) or that they are violating those rules.

              GE as a global entity made tons of money, yet GE as a US citizen paid zero in US Corporate Income Tax (and even got a tax credit against future US Corporate income tax from that year's operations).

              The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

              Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
              ...

              Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

              http://www.nytimes.com/...

              Those are my real issues with them.  

              Is it possible that "cheating" is involved in the form of shifting costs so that profits are shifted to one of their many foreign subsidiaries (in a country with lower taxes)?  That's always a possiblity.  It's been a problem for years and the GAO studies on it describe how complex a problem it is.

              And even if the cost allocation/profit location is entirely on the up and up, the whole foriegn tax shelter construct is both deeply flawed and works against national policy.  

              And much of it comes as a result of millions spent lobbying to get that result and shift taxes away from the behemoth class corporations.

              We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

              by Into The Woods on Tue Apr 19, 2011 at 02:42:34 PM PDT

              [ Parent ]

              •  you're right, I agree (1+ / 0-)
                Recommended by:
                Into The Woods

                I'm just pointing out that we have a lot of rules on the books tax-policy wise and big and little companies alike take advantage of them, and when your company is as buig as GE, now you're talking about real money.

                The "cheating" thing is just that that seems to be the implication in the many posts about "corporations pay no taxes", but people need to recognize, as you said, that the tax laws are structured that way.

                The best description I've heard recently about "fixing" the tax code problem is not just another "tax reform act of 1986" (which some lawyer friends immediately called "the Full employment for accountants and tax lawyers Act")
                but to approach the tax code as a hedge - needs not to be dug up and replanted, but it does need pruning from time to time, constant pruning, to both keep it healthy and remove the infestations that somehow creep in.

                'Course, that might require a congress that's not bought and paid for.

                And maybe getting a lot of individual social policy out of the code might be good too.

                Without geometry, life is pointless. And blues harmonica players suck.

                by blindcynic on Tue Apr 19, 2011 at 05:24:07 PM PDT

                [ Parent ]

                •  Ah. There's the rub. (0+ / 0-)
                  'Course, that might require a congress that's not bought and paid for.

                  Someday.  Someday.  

                  We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

                  by Into The Woods on Tue Apr 19, 2011 at 06:17:19 PM PDT

                  [ Parent ]

    •  Property tax too (3+ / 0-)
      Recommended by:
      DavidW, Roadbed Guy, thestructureguy

      Do you really think my landlord is so stupid that he doesn't pass on the cost of his property tax to me?

      It is possible to read the history of this country as one long struggle to extend the liberties established in our Constitution to everyone in America. - Molly Ivins

      by se portland on Tue Apr 19, 2011 at 05:55:40 AM PDT

      [ Parent ]

  •  Who gets credit for "paying" tax on (8+ / 0-)

    rental property?   Poor folk may not have a separate bill or receipt for property tax issued in their name -- but you can be sure that their landlord figured his/her tax cost into the rental price.

    Even poor folk pay tax to buy a car, tax to get a license to drive, tax on gas, and tax to purchase license plate.  If they don't drive, any sane hired livery service will have added in their tax costs to the fare charged.  

    Even if food isn't taxed at checkout, all tax costs of the businesses who got it to grocery shelves are added into the price.  

    Its like three card monte game -- or shifting the nut under the shells.  Con game.

    De fund + de bunk = de EXIT--->>>>>

    by Neon Mama on Mon Apr 18, 2011 at 04:59:56 PM PDT

    •  We plan to rent our house and will pay about 1000 (1+ / 0-)
      Recommended by:
      Into The Woods

      more a month on mortgage and taxes and insurance than we collect in rent (by what houses are renting for in the area). So we get the tax break and it will help us with about half of that deficit. There are people who have long term rentals and are in the business of renting. But there are also people who rent because they either have to go somewhere else and can't sell their house Or they want to go elsewhere.

      We are concerned because of the possibility that the tenants either totally trash the house since it isn't theirs or stop paying rent and fight to stay in the house forcing us to pay for their living space at our expense.

      If the tax break is shifted we won't rent because we would go into debt for renters and bear all the risk of whatever they choose to do once they get into the house.

      I worry because Reagans tax cuts for the rich caused our taxes to double.  Now those in the middle are in the frame again.

      Fear is the Mind Killer

      by boophus on Tue Apr 19, 2011 at 10:48:37 AM PDT

      [ Parent ]

  •  I know the corporate rate wasn't (7+ / 0-)

    discussed but with regards to the 35% federal income tax, I wonder how many, if any, payed the 35% rate.     And then when percentage of corporations actually payed that rate.  

    If theres one BS  number, it's the 35% corporate rate on income and I hate when's is used, because its a phantom number in reality.  

    •  What percentage,not when (1+ / 0-)
      Recommended by:
      caul

      I gotta proofread better, lol

    •  a lot of small corps do (3+ / 0-)
      Recommended by:
      caul, drewfromct, Into The Woods

      Homeowners Associations electing to file Form 1120-H actually pay at a flat 30% rate on all income (less $100) deriving from sources other than member dues and assessments.

      We eked out a couple hundred dollars in interest and dividends this year, and paid $66 in taxes.  It's a wonder of simplicity relative to Form 1040, but in a system with few loopholes or deductions, the published rate is pretty much what we pay.

      "They let 'em vote, smoke, and drive -- even put 'em in pants! So what do you get? A -- a Democrat for President!" ~ Faster, Pussycat! Kill! Kill!

      by craiger on Mon Apr 18, 2011 at 11:33:48 PM PDT

      [ Parent ]

  •  Great diary. (5+ / 0-)

    I was wondering about the 2.2T when I saw your previous diary (give back the 1T), and after I read it, I started to wonder why income tax revenues sought out so much of the middle class's largess.  And the answer is the answer to the same question:  "Why did you rob the bank?" .  Because that's where the money is (was). In middle-class incomes.  

    That is why the income tax rate structure put a burden on middle class incomes.  

    But that has all changed, since jobs, the only access most of us have to money, were been eliminated by the attack on the middle class, and,of course, the great recession.

    So, simply put, you don't tax the middle class so much, now; you tax the wealthy instead, because that's where the revenue is.

    Planning a vacation or convention in Arizona? Come to Palm Springs instead! Same desert weather, none of the bigotry.

    by grey skies turning to blue on Mon Apr 18, 2011 at 11:52:17 PM PDT

  •  I hear a lot of them talking about fair tax (8+ / 0-)

    usually related to a form of universal sales tax.

    Really rich people tend not to spend that much of their income [that's how you become wealthy] so sales taxes hit those who spend most of their income to get by the hardest.

    Thank you for the diary for putting the record thus far straight

    "Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing." Arundhati Roy

    by LaFeminista on Mon Apr 18, 2011 at 11:56:01 PM PDT

    •  Fair Tax would hit many people very hard. (3+ / 0-)

      http://www.cbpp.org/...
      quote:
      Most “FairTax” proposals submitted to date define the sales tax base as all final purchases of goods and services. This far exceeds any state’s current base. Under the “FairTax,” the new, high sales tax rate would be levied on consumer purchases of all food, all prescription drugs and other health care products and services (such as doctor’s visits and laboratory tests), purchases of new homes, utility bills, private school tuition, and many other services and goods now exempt from the sales tax in most or all states.[1]
      endquote.

      Its the fact that youwould have to pay 23 to 28% tax on just about everything you did.

      Buy a cheeseburger...pay 28%.

      go see the doctor...pay 28% for him and 28% for the $2,000 MRI he orders.

      Its a heck of a way to reduce healthcare costs.  It would put healthcare completely our of reach for many.  Only those who could pay the hundreds of dollars in taxes for every lab test would be able to get them.

      and what of prescription meds that cost $1,000 every refill? $280 dollars please (just in tax) -- becasue insurance doesnt pay tax. you do.

      yeah thats 'Fair'

    •  I'm a big proponent of fair taxes (5+ / 0-)

      Fair income taxes.  Starting with treating capital gains as regular income.  I would be in favor of an accumulated inflation adjustment, so maybe people would pay, for example, 32.631% instead of 35%.  Versus the current 15%.

      Hey, fairincometax.org is available.  Think I can get the rich to kick in for a major propaganda campaign to make the tax system fairer?

      (Crickets)

      I am become Man, the destroyer of worlds

      by tle on Tue Apr 19, 2011 at 07:41:36 AM PDT

      [ Parent ]

    •  A Fair Tax I'd Support: Stabilizer Surcharge (1+ / 0-)
      Recommended by:
      cameoanne

      The purpose of a Stablizer Surchage would be to set future income tax rates to move each income category towards a chosen miniumum effective rate for a given income category.

      First, add a number of new, higher brackets to reflect that the differences between $1 and $373,650 that merit 5 different tax brackets, might just possibly also merit another 5 brackets above  $373,650, say at the $1 Million, $1.5 Million,  $2 Million, $5 Million and $10 Million thresholds.  (For 2006 the number of returns and taxable income falling into those categories is below.)

      Second, you set a target effective rate for each bracket (based on historic effective rates adjusted upwards) in addition to the statutory rates for each bracket.  

      For each following year, based on the review of the most recent available IRS numbers (like the ones contained in the spreadsheet I've linked to below) IRS would establish how far below the target effective rate each category fell in its actual effective rate.  

      A Stabilizer Surcharge would then be added to the next year's statutory rate for each income category that fell beyond a certain distance below it's target effective rate.  (At some level it's close enough for Government work and not worth hassling with.)  You could do it in reverse as well.

      The surchage would be caclulated to recoup some or all of the deficiency from the prior year, but the intent would be to move the actual effective rate towards the target.

      Rinse and repeat.  

      It would be at least some deterence to gaming the system because the more your cateogory's effective rate fell below its target, the higher your next year's rate would be.

      Reported AGI      Cummulative Returns Cummulative/$ AGI

      Over $10 Million:    13,338                     $346 Billion
      Over $5 Million       34,489                     $475 Billion
      Over $2 Million       119,837                   $699 Billion
      Over $1.5 Million:   178,670                   $878 Billion
      Over $1.0 Million:   317,902                   $934 Billion

      "Table 1.1  Selected Income and Tax Items, by Size and Accumulated Size of  Adjusted Gross Income, Tax Year 2008"                                                                               

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Tue Apr 19, 2011 at 03:56:47 PM PDT

      [ Parent ]

  •  The lie has come up often in the past week so (10+ / 0-)

    I figured it is part of the build up to whining about increasing taxes on the overburdened rich people.

    I didn't know how it was a lie but they distort everything. I thought maybe the percent of those who didn't pay that they were using included children and the retired...

    But what mostly crossed my mind was getting the chance to respond to one of them who whined "Is that fair?"
    "No it isn't!" I'd say "We have to give them all a raise so they make enough to pay in"
    And how it isn't that those who earn low wages don't work as hard as high wage earners or that they are less valuable to society.
    Who would we miss more if the position was suddenly gone... the CEO or the janitor? The restaurant owner or the dishwasher? How soon would we miss the trash collectors, those who plowed the snowy roads...

    The mundane jobs we do not value enough to pay well.  Right, it isn't fair. We need to change our pay scales and create more tax payers.

  •  Here's an easier way to combat the lie (6+ / 0-)

    which isn't really a lie as much as a distortion of the facts.

    When 42% of us are not employed and a large part of those who are usually are asking us if we want fries with that burger is it any wonder they don't pay any taxes?  

    What money are they gonna pay taxes with?

    What income are they gonna pay taxes on?

    As of March 2011 the employment population ratio was at 58.5%.  Of course the bottom 50% don't pay taxes.  They don't own jack shit, they don't make jack shit, most don't have a pot to piss in or a bed to call their own.  Many would GLADLY pay taxes if it meant they could get a fucking job that paid significantly above minimum wage.  Of course many others are a bit young to pay taxes or a bit old to go back to work.

    This is your world These are your people You can live for yourself today Or help build tomorrow for everyone -8.75, -8.00

    by DisNoir36 on Tue Apr 19, 2011 at 04:52:01 AM PDT

    •  But...they DO pay taxes. thats the point. (5+ / 0-)

      conservatives muddy the waters by saying 'they dont pay taxes'.

      and its not true.

      I dont pay capital gains taxes.  does that mean I dont pay taxes?  no.  i dont pay federal income tax.  but do I pay taxes? yes, I pay taxes. and I apparently pay more taxes than many corporations.  i even subsidize my local corporations becasue they get tax breaks that my taxes have to help make up the difference for.  i also subsidize their energy use becasue they get low rate deals that I cant.(but thats another story -- their heavy consumption increases prices through the law of supply and demand and then they pay lower rates than I do becasue Im and individual who uses less energy)

      We really need to stop giving the party of liars ammunition.  they dont tell the truth.

    •  Even the poor and unemployed pay lots of taxes (1+ / 0-)
      Recommended by:
      echo still

      just not as much income tax.

      When you buy something at the store, before they ring up the sales tax they don't ask "oh sir, are you unemployed?"

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Tue Apr 19, 2011 at 12:51:21 PM PDT

      [ Parent ]

  •  To quote a friend of mine, "Anyone who says... (11+ / 0-)

    nobody's ever died of hard work, has never done any..." The claim that the wealthy and corporations pay a disproportionat share of the tax burden in the United States is not only incorrect, it is laughable. The tax system in the United States is particularly egregious in its treatment of the working class. From payroll taxes deducted from every check to excise, sales, property and energy/transportation  taxes embedded in the price of everything from gasoline to insurance, the general regressiveness of the tax system is most burdensome on those who can least afford to pay.

    The list of loopholes available to the self-employed, wealthy investor, those who derive most of their income from "capital gains" and corporations is thousands of pages long in the tax code. Anyone who simplifies the tax distribution in the way the Republican's and their minions at the Heritage Foundation and Americans for Tax Reform et al do, is not going to listen to the facts as the diarist laid them out here.

    The meme "when the rich are taxed, opportunity decreases for all Americans", is of the same order as "nobody ever died of a little hard work," both demonstrably untrue and both emotionally centered cultural memes. Unfortunately, facts rarely trump closely held ideological/cultural beliefs that serve the one's who believe them and Republicans are very well served by both of these memes.

    I found the diary both persuasive and well written; however, I am predisposed to accepting this type of fact based argument, most of the people I know who are not so predisposed would just dismiss the reasoning and cling to their own beliefs. I am afraid that the cultural bias is against the adoption of a truly progressive and fair tax code. I don't know why, I wish I did...

    "Intelligence is quickness in seeing things as they are..." George Santayana

    by KJG52 on Tue Apr 19, 2011 at 04:55:14 AM PDT

  •  Here are a few more real numbers: (4+ / 0-)

    According to the CBO report Average Federal Tax Rates in 2007 (the latest data available), the higher income groups have consistently paid a disproportionately large share of the tax bill. The data show that the top 1% of all households paid 39.5% of total federal income tax while earning 19.4% of total income in the economy. The top 20% paid 86% of total income taxes while earning 55.9% of total income. The next quintile paid 12.7% of income taxes while earning 19.3% of total income.

    In contrast, the middle quintile paid only 4.6% of federal income taxes in 2007 on an income share of 13.1%. The second lowest quintile paid a negative 0.3%, that is, they actually got money back from the government. Their income share was 8.4%. The lowest quintile also had a negative tax liability of 3% and an income share of 4%. Thus, it is easy to see that our current tax code is highly progressive, and that the higher income groups actually pay more than their “fair” share.

    The CBO report also shows that the individual income tax—the largest source of federal revenues—has gotten sharply more progressive over the past 30 years. In fact, the CBO data show that since 1979, not only have the income tax shares of the lower four quintiles continued to drop, but the lowest quintile has been in the negative since 1987 and the second lowest has been in the negative since 2002. This means that the lowest 40% have no federal income tax liability and actually get subsidized by the government through refundable tax credits and other incentives.

    •  Again, federal INCOME taxes are (9+ / 0-)

      a rather small slice of the entire amount of taxes paid in this country (and really, the only progressive major tax that exists).

      For example, SS/FICA payroll taxes (which are about the same total as federal income taxes) are completely  regressive.  And so are state & local taxes (which in aggregate are close to the total $ value of federal revenues).

      So it doesn't really matter how often you focus on federal income taxes to gain sympathy for the ultra wealthy, it still doesn't change reality . . .

      •  Yes, this meme needs to die and be (3+ / 0-)

        replaced with, 'the rich pay X amount of ALL taxes' (not federal taxes) but I'd like to know what that amount is.

        "I've taken up sculpting recently. Landscapes mostly." ~ Yogi Bear

        by eXtina on Tue Apr 19, 2011 at 05:46:50 AM PDT

        [ Parent ]

      •  Not really, they're a huge portion... (0+ / 0-)

        ...of the actual discretionary budget of the country.

        Medicare and SS taxes are essentially loop-throughs to the recipient and don't actually contribute to anything save funding the programs they are allocated to.

        In terms of paying for federal highways, the military, the EPA, on and on, essentially what people associate with the actual federal government... you either pay federal income tax or you essentially don't contribute.

        •  I think that more people than you (4+ / 0-)

          might imagine regard Medicare and SS as integral components of the federal government, that touch an awful lot of people in this country.

          •  A lot of people regarding them as entitlements... (1+ / 0-)
            Recommended by:
            Into The Woods

            ...too, as in "I'm going to get my Social Security."

            You expect to get that money back eventually, unlike federal income taxes, which go to support things that aren't going to pay directly back to you.

            Heck, Gore's major campaign plank was taking SS and Medicare officially off budget.

            •  We Are Entitled To Them. Thus the term. (2+ / 0-)
              Recommended by:
              cameoanne, means are the ends

              Entitlements.

              And while we've steadfastly kept our end of that 30-year bargain, the rich whose effective income rates have gone down while their incomes have skyrocketed, are now leading the charge to bail out of the deal and treat the $2.3 (and essentially all future such loans from the SocSec Trust fund to the general fund) as meaningless political slight-of-hand as well.

              That kind of fundamental breach of the 'social contract' is not to be taken lightly.  

              The math may be complex.  

              The principles are simple.

              Make a deal.  Keep the deal.  

              We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

              by Into The Woods on Tue Apr 19, 2011 at 01:14:06 PM PDT

              [ Parent ]

        •  You obviously missed my previous diary (1+ / 0-)
          Recommended by:
          means are the ends

          Either Leave Social Insurance Alone Or Pay Us Back Our $ 1 Trillion.

          Once upon at time, you would have been right, though even back then they kept a little reserve, but only as a prudent measure against incorrect short-term projections.

          Then, around the time Reagan came into power, they discovered a crystal ball that could see 100 years into the future and lo and behold, they discovered the "BABYBOOM MENANCE" to Social Security.

          Since then, they have collected in excess of $2.3 Trillion beyond what was required for current outlays.  

          We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

          by Into The Woods on Tue Apr 19, 2011 at 01:09:52 PM PDT

          [ Parent ]

    •  Wrong, wrong, wrong (7+ / 0-)

      Nothing in the figures you posted prove that we have a highly progressive income tax.   It could just as easily be evidence of the extraordinarily disproportionate distribution of income.   The ultra-rich pay far more than the rest of us because their income is unbelievably vast, not because they pay a higher rate of taxes. In fact, at the highest end of the income scale, income progessivity declines.

      Incidentally, what you posted is a cut & paste from the US Chamber of Commerce. I'm tempted to troll rate you for doing this without attribution, but I will refrain.

      •  Here is a little more data: (1+ / 3-)
        Recommended by:
        MGross
        Hidden by:
        Into The Woods, cville townie, Radical def

        Considering I wrote the article I did not think it was necessary to denote that via APA.

        "The data show that the top 1% of all households paid 28.1% of total federal tax liabilities. Moreover, this percentage of taxes paid has grown consistently over the years. The top 20% paid 68.9% of total federal taxes. The next quintile paid 16.5%.

        The middle quintile paid only 9.2% of federal taxes in 2007. This was a lower tax bite than they experienced in 2000 and has consistently declined since 1979. The second quintile paid 4.4%, while the lowest quintile paid only 0.8%. Although this is a bit more than their share of income taxes, the system is still very progressive."

        http://www.uschambermagazine.com/...

        •  yes. the rich are getting richer. (8+ / 0-)

          as the wealth has shifted into fewer and fewer hands, those people tend to pay more.

          they have more. They pay more.

          and your numbers are skewed by 'income'.

          A hedge fund manager gets paid $1 dollar in actual income and $4 million in stocks.

          Does he pay any income tax at all?

        •  Wow! I guess we need more tax cuts for the (8+ / 0-)

          rich then, huh?

          Or we could say...

          In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.

          Get lost with your "pity us poor rich folk" fake statistics. Because since you wrote the article, you either believe the lies, or are spreading them on purpose. And in either case, you are doing much harm.

          •  Well, we really need higher taxes across.... (2+ / 0-)
            Recommended by:
            Book of Hearts, Into The Woods

            ...the board.  If you look at effective federal taxation rates across the years, virtually everyone's rate has been dropping but the rich.

            It's not that the rich need to pay less, so much as everyone needs to pay more.

            Expiring the Bush tax cuts would be a great start.

            •  Check your State/Local effective rates (4+ / 0-)

              in almost all cases the rich pay less of their income in taxes than all other categories and that disparity has grown since the 80s.

              The effective rates on the rich are less than they were in 2001 and less than they were in 1992, which given the massive increases in their income (pushing more into the top marginal rate brackets) is actually pretty astounding.

              We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

              by Into The Woods on Tue Apr 19, 2011 at 01:22:50 PM PDT

              [ Parent ]

        •  Follow the money and wealth (4+ / 0-)

          The wealthy earn most of the money and have more than half of all the wealth in this country, imo they should pay an equivalent level and percentage of total wealth.

          If the top 1% possess at least 33% of all the financial wealth in this country..they should pay that same proportion. Your figures say they don't...they pay only 28%. They are not paying their fair share.

          And if the top 20% owns a total combined 85% of the wealth in this country, they should pay the same proportion combined...and your figures say they don't....they only pay 69%.  They are not paying their fair share.

          The reason they pay a larger combined percentage is because they the ones who have most of the money and most of the wealth.  But as you can see it it less than the total share they possess.

          FYI...Income inequality is growing...15 mind blowing facts about wealth inequality.

          "When will the American teachers follow the lead of Wall Street and start making some sacrifices for the children"..Jon Stewart

          by emal on Tue Apr 19, 2011 at 08:56:27 AM PDT

          [ Parent ]

        •  USchamber of Commerce ... Now that makes my skin (4+ / 0-)

          crawl. A democrat or progressive supporting these tools of the oligarchs. Hmmmmmmmmmm

          Fear is the Mind Killer

          by boophus on Tue Apr 19, 2011 at 10:56:07 AM PDT

          [ Parent ]

          •  HBGary. Why am I suddenly reminded of that name? (2+ / 0-)
            Recommended by:
            means are the ends, tardis10

            But that just couldn't be.  

            Why, it's inconceivable.

            We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

            by Into The Woods on Tue Apr 19, 2011 at 01:31:56 PM PDT

            [ Parent ]

          •  Apparently this person is neither (2+ / 0-)
            Recommended by:
            Into The Woods, emal

            a Democrat or a progressive; just here from the Chamber of Commerce or some such to stir up shit. Check the comment HX.

            And if "Linda"s claim is true, she is really a he.

            Life is a school, Love is the lesson.

            by means are the ends on Wed Apr 20, 2011 at 08:50:53 AM PDT

            [ Parent ]

            •  Or a pathetic liar wearing UCCOC's clothing. (1+ / 0-)
              Recommended by:
              emal

              Given the poster's comments it's not entirely clear whether they are alert and oriented  to the extent we can rely on anything he/she says, especially when it claims to work for the US Chamberpot of Chicanery

              Maybe she/he just needs professional care.

              It's a pretty bone-headed slip for someone with such lofty creds if they're really trying to do an HBGary "false insider persona" thing (ala Team Themis.)

              On the other hand, if someone had something more nuanced in mind and wanted to send  someone to DK  to dance in the minefield until they exploded, a conservative economist still apologizing and defending the deregulatory policies and "let them eat cake" economic philosophies of the last 30 years might be just the ticket.  

              We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

              by Into The Woods on Wed Apr 20, 2011 at 01:36:26 PM PDT

              [ Parent ]

        •  So you are saying you wrote that article (4+ / 0-)

          Since no one asked you for your personal information and it was disclosed completely voluntarily, I just wanted to confirm that you are the person that wrote the article to which you link:

          Dr. Martin Regalia
          Senior Vice President and Chief Economist
          Chamber of Commerce

          I wouldn't want someone taking credit for Dr. Regalia's fiine work for the US Chamber of Commerce.  

          http://www.chamberpost.com/...

          http://www.uschambermagazine.com/...

          It certainly explains the viewpoint.  

          We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

          by Into The Woods on Tue Apr 19, 2011 at 01:29:17 PM PDT

          [ Parent ]

      •  They may pay a higher effective rate on income tax (1+ / 0-)
        Recommended by:
        means are the ends

        but higher than what?

        Higher than the lower income categories.

        But not higher than they did in 2001 or 1996.  

        And they obviously pay a much, much lower effective rate on Social Insurance.  

        You are exactly correct.  

        We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

        by Into The Woods on Tue Apr 19, 2011 at 01:18:49 PM PDT

        [ Parent ]

    •  Did you even read the diary? (3+ / 0-)

      what part of effective tax rate did you miss? What part of total taxes paid did you miss.

      And if you did read the diary what part of it did you not understand so maybe people could explain it to you so you could understand it.

      You're cherrypicking one small tax fact that doesn't reflect the total big picture on total taxes paid by all income groups.

      That's wrong and very very misleading.

      Please read the diary, refute what the diarist has said, but please stop repeating rightwing talking points here.

      "When will the American teachers follow the lead of Wall Street and start making some sacrifices for the children"..Jon Stewart

      by emal on Tue Apr 19, 2011 at 08:00:34 AM PDT

      [ Parent ]

    •  But their effective rate has gone DOWN (2+ / 0-)
      Recommended by:
      cameoanne, emal

      If you use "Share of Total Tax" you also need to look at how much of their income they are paying in taxes.  (That's how tax rates are designed, as a % of your income, not as a percentage of the total revenue from that tax.)

      So you need to look at the "Effective Tax Rates".  I always use the Tax Foundationbecause the RNC uses them.  Tough to call them a left-wing biased group.


      2008

      Top 1/10 of 1%:  22.70%
      Top 1%:              23.27%
      Top 5%:              20.70%  

      2001
      Top 1/10 of 1%: 28.20%
      Top 1%:             27.50%
      Top 5%:             23.68%

      1996
      Top 1/10 of 1%:   N/Available
      Top 1%:              28.87%
      Top 5%:              24.07%

      So while their share of the pie has gone up significantly, the portion that must be paid in taxes has gone down.

      While the latter can be said of all income categories, the former cannot, and I cannot make up a dollar lost in wages with a 2% cut in my income tax.  

      Data taken from: http://www.taxfoundation.org/...

       

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Tue Apr 19, 2011 at 01:05:02 PM PDT

      [ Parent ]

  •  Thanks... (1+ / 0-)
    Recommended by:
    Into The Woods

    I had to listen to wingnut radio for a while yesterday and the host was blathering on with the same old lies.

    Unfortunately wingers are a different breed. They have their beliefs and no facts will ever change them, for them it's beliefs first, facts a distant second, it's in their genetics.

  •  Iowa is regressive too. (4+ / 0-)

    Why don't Republicans want the wealthy to pay their fair share? What happened to "shared sacrifice"?

    Don't they think America is worth it?

    Passive renunciation is not the whole of wisdom.

    by play jurist on Tue Apr 19, 2011 at 05:11:59 AM PDT

  •  'Taxes' (2+ / 0-)
    Recommended by:
    emal, Into The Woods

    always gets lumped together as one cohesive thing, but is important as you have done to distinguish between federal and local taxes, for the reasons stated. Not-high income earners are paying quite a bit of tax in local taxes and this is what they scream about as in tea party taxed too much protests, but the answer is not to lower federal taxes for the rich! It which will not help them! I for one think more taxes should be assessed at the local level rather than redistributing money from blue states to red states, but not in the regressive fashion they tend to be as you illustrate. Then maybe the defense budget can be trimmed down to a more reasonable level.

    "I've taken up sculpting recently. Landscapes mostly." ~ Yogi Bear

    by eXtina on Tue Apr 19, 2011 at 05:43:41 AM PDT

  •  Either way the numbers are disturbing.... (4+ / 0-)

    What bothers me the most is that there a TENS OF MILLIONS of Americans that don't earn enough to even pay a "token" amount of Federal income taxes.  Granted, they pay much higher rate in payroll taxes compared to the six-figure folks, but it still points out the income disparity that, I believe, is destroying the country I grew up in.

    "Now watch what you say or they'll be calling you a radical, a liberal, a fanatical criminal" -- Logical Song -- Rick Davies & Roger Hodgson

    by Over50Lib on Tue Apr 19, 2011 at 05:51:01 AM PDT

    •  That's actually a symptom... (0+ / 0-)

      ...not of income decay, but of tax policy.  In particular, the EITC which is essentially a welfare payment tacked onto your taxes.

      I loathe refundable tax credits in no small part because they completely distort the tax debate.

    •  Bottom Half Average $15,354 Annual AGI. (1+ / 0-)
      Recommended by:
      cameoanne

      In 2008, according to the Tax Foundation, 69,980,290 Tax Returns make up the bottom 50% of those returns reporting a positive AGI for that year.

      From that bottom 50%, $1,074,514,000,000 AGI was reported.  

      So unless my math is even worse than usual, the bottom half of Americans filing tax returns reported an average annual Adjusted Gross Income of about $15,354.  

      One half of America averages $15,400 per year.  

      And they still paid  about $27.9 Million in income taxes (after tax credits.)  

      And people  making over $1 million per year (or $100 Million) calls this half of America free loaders?  

      What's surprising is that we are not already at the barricades.

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Tue Apr 19, 2011 at 01:46:33 PM PDT

      [ Parent ]

  •  THANK YOU! NY way regressive (2+ / 0-)
    Recommended by:
    Into The Woods, cameoanne

    Am sure you know about New York's Fiscal Policy Institute
    http://www.fiscalpolicy.org/

    What's so awful is that the so-called millionaire's tax puts the rate far below than what it was under Gov Rockefeller. During Cuomo I, I think it went down a little. It was Pataki that slashed taxes on the wealthiest NY'ers--the start of our state's fiscal woes. So similar to Bush II.

    Haven't been on Kos lately. Has anyone thought of convening a national conference (live or web based) to share solutions for the very regressive state and local taxes?

    In NYS we are trying to come up with a fair circuit-breaker type of tax. I know MN lets seniors defer. Are people happy with that as far as you know? Could it go further to others on fixed incomes?

  •  Just checking but... (3+ / 0-)
    Recommended by:
    Sparhawk, Cardinal96, Into The Woods

    this part is factually accurate. Correct?

    ... half of Americans pay no income tax
    •  No. Not accurate. (0+ / 0-)

      The only conclusions I've seen (have not even seen how they got there) relates to Federal Income Tax, not State Income Tax.  

      If they have done a state by state analysis and aggregated that into a national figure, they better provide it before they start using it.

      I've seen no such analysis or even any reference that such an analysis has been done.

      The Tax Policy Center is, I believe,  the source of the concept that 47% pay no federal income tax.  

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Tue Apr 19, 2011 at 01:50:00 PM PDT

      [ Parent ]

  •  Excellent diary but (5+ / 0-)

    any discussion of tax burden also has to include consideration of tax shifting, which is a rather complex topic.  The tax tables cited here are really measures of where a tax is collected.  Where it is collected is not necessarily who pays it.  For example, a sales tax might be shifted forward in the form of higher prices in which case the buyer is paying the tax.  It might, however, be shifted backward in the form of lower wages for workers in that store, or some combination of the two.  

    The ugly truth is that the tax system is probably much more regressive than even these figures indicate.   The notion that people who don't officially pay the IRS money pay no taxes is a cruel lie.  Many of the unemployed, in effect, are paying a 100% income tax, with the working poor paying something just under that.  

    The Long War is not on Iraq, Afghanistan, or Iran. It is on the American people.

    by Geonomist on Tue Apr 19, 2011 at 06:16:33 AM PDT

    •  The State Incidence Study Does That (0+ / 0-)

      I've not seen it for Federal, but since the corporate and excise taxes have dwindled so badly, it would not have a huge impact.  

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Tue Apr 19, 2011 at 01:51:16 PM PDT

      [ Parent ]

  •  The (2+ / 0-)
    Recommended by:
    emal, Into The Woods

    criminal rich stole all the wealth this past 30 years so they should pay ALL THE TAXES.

  •  My simple answer (5+ / 0-)

    It is correct to state that the wealthy pay the most in taxes.  They pay the most actual dollars.  they do not, however, pay the most of their income to taxes.  the poor pay the most of their income to taxes.

    The reason the wealthy pay the most actual dollars in taxes is becasue they have the most actual dollars.

    To put it simply:

    If someone complains about taxes, say something like:

    "Let everyone in the country send me all of their money.
    Then I will be the only one paying taxes.  I will put out reports and studies that show that I am the only one paying taxes and I will point out how unfair it is that I should pay all the taxes and all the other people get away scot free.  and all the other people will say "But sir, we have no money"  and I will say "Let them eat cake"...becasue that makes sense to me."

    Seriously. everyone send me all of their money and then I will be the only one paying any taxes.  sound fair?

    Note: this argument will probably only frustrate a conservative.  It apparently wont change his/her mind.  

    •  If the bottom 95% had the same income growth (2+ / 0-)
      Recommended by:
      cameoanne, echo still

      as the top 5%, we would be more than happy to pay the corresondingly higher taxes.

      It's only that the bottom 90% has been so flattened out that they've been convinced the only way to increase their cash flow is to decrease their taxes.

      A wonderful gambit by the global thieving class.

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Tue Apr 19, 2011 at 01:53:41 PM PDT

      [ Parent ]

  •  "The Middle now pays an effective tax rate..." (0+ / 0-)

    over 12%

    Out of curiosity I checked my own Federal tax rate and this recent filing I paid 17.7% of my gross income to taxes.

    Hate to sound like a rethug here but that is getting ridiculous.  Meanwhile those who make more have the money and lawyers to pay less and get away with it.  The complicated tax code only serves the rich.  We need a simplified flat tax with zero loopholes.  That way all the middle and lower class pay less and the rich pay a hell of a lot more.

    "All this marching up and down and cheering and waving flags is simply sex gone sour." -Julia, 1984

    by pullbackthecurtain on Tue Apr 19, 2011 at 07:07:45 AM PDT

    •  I'm Used to Having to Be Patient With Republicans (1+ / 0-)
      Recommended by:
      cameoanne

      so no worries.

      The 12% is effective rate for State and Local taxes in Minnesota, as should be clear when I said:

      As with most states, , my state (Minnesota) has a regressive tax system where the rich pay a lower effective overall tax rate (State & Local) than the upper-middle, middle, lower-middle and low income categories. (This is often even more severe for local taxes where the current year shift is most likely to occur.  And the richer they are the less that effective rate becomes, so that you get these kind of results:

      Back in 1988, the effective rates paid for all our State and Local taxes and fees etc, was within a few tenths of a percent between all categories of income.  It wasn't a progressive system, but at least it wasn't regressive.

      Since then, things have changed.

      The effective State/Local tax rates for the middle and upper middle have increased 38% since 1988.*  

      That effective  rate for the Top 10% have gone up only 14%.  

      For the Top 5% they went up only 11%.

      For the Top 1% they went up only 9%.

      The Middle now pays an effective tax rate that is over 12% (12.1% - 12.3%).

      The Top 10% pays only 10.4%.
      The Top 5% pays 10.1%.

      The Top 1% pays an effective rate of only 9.7%, over 20% lower than the effective rate paid by the Middle.

      Flat rate assumes  that 10% taken from someone who is working three jobs and still just barely squeaking by and has no real hope for sending their kids to college and most likely no health insurance worth a damn; is the same "value" or "sacrifice" or "burden" as 10% from someone who is deciding how many frigging new yachts to buy this year.  

      Progressive rates are the only thing that takes that difference in real value (and real sacrifice) into account.

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Tue Apr 19, 2011 at 02:02:59 PM PDT

      [ Parent ]

      •  hate to burst your bubble (1+ / 0-)
        Recommended by:
        Into The Woods

        but the guy buying yachts is paying a LOT less than 10% under the progressive scheme.

        And if you think the progressive scheme we currently have is giving the lower class person working 3 jobs a break, you're wrong again.

        Maybe the term 'flat tax' is not correct in my usage, but people should be taxed according to their ability to pay.  And the complexity of the current tax code only serves the rich.

        "All this marching up and down and cheering and waving flags is simply sex gone sour." -Julia, 1984

        by pullbackthecurtain on Tue Apr 19, 2011 at 07:17:06 PM PDT

        [ Parent ]

        •  No bubble to burst, but flat tax isn't what you're (1+ / 0-)
          Recommended by:
          pullbackthecurtain

          looking for.

          A more highly progressive tax formula with no exceptions or deductions might be what you are thinking of, but would you want to count the expense of group health insurance provided by your employers as taxable salary?

          Would you include as taxable earnings or capital gains on any private retirement plan like a 401K?

          How about interest on home mortgages?  Zero deductible?

          These are some of the largest in terms of dollars for individuals.  

          Simple always sounds good.
          Doesn't always work good.

          We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

          by Into The Woods on Tue Apr 19, 2011 at 08:31:24 PM PDT

          [ Parent ]

          •  perhaps (1+ / 0-)
            Recommended by:
            Into The Woods

            can we agree that what we currently have is as broken as broken can get?

            "All this marching up and down and cheering and waving flags is simply sex gone sour." -Julia, 1984

            by pullbackthecurtain on Wed Apr 20, 2011 at 06:38:19 AM PDT

            [ Parent ]

            •  You bet. Thanks for the response (1+ / 0-)
              Recommended by:
              pullbackthecurtain

              It is actually something folks should discuss.

              When Obama took a run at it last time he botched it badly.

              For example, they were trying to limit the home mortgage interest deduction to (rightfully) try to target it at helping people get their first home.  

              What they did was repeal it.  (Cue GOP Death Pannel Squad).

              Then they reinstated it later in the bill.  

              Ijuts.  

              But yes, what we have now is almost as broken as we could get.  

              I say "almost" because under Ryan's bill, it would get worse.  

              We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

              by Into The Woods on Wed Apr 20, 2011 at 10:29:44 AM PDT

              [ Parent ]

  •  why can't income taxes come down to a single chart (1+ / 0-)
    Recommended by:
    cameoanne

    this is your income range. this is your tax.. no tax write-offs or incentives... or decentives.. just a percent you have to pay if you earned X amount of dollars... so simple 3rd grader could do your taxes and get you your maximum return because itemized deductions would be a thing of the past.

  •  Tax foundation should be taken with salt. (1+ / 0-)
    Recommended by:
    Into The Woods

    Just a note:

    Some argue with the Tax Foundations positions and papers.  I believe they are part of the right wing ideologue group. (but they might not be)
    I have no problem with facts but apparently they 'spin' things.

    see http://www.cbpp.org/...

    good diary though.  very glad to see your use of CBO.

    i have trouble finding data from them myself.

    we need a series on how to get data.
    FEC
    CBO
    dept of energy.
    etc...

    i think its sad how 'below board' campaign financing has gone.  Sure you can find numbers that appear to say one thing but when more than half of the story is not even available, how much truth can we get?
    and this is what Republicans wanted with Citizens United. (et al?) hmmm...

    •  They are RW. Look at their analysis of (1+ / 0-)
      Recommended by:
      echo still

      who pays what and who gets what.

      Very right wing.

      Also, you'll search in vain for anything showing "effective tax rates" for corporations on their site.  Only the statutory rates allowed.  

      But that's why I use them.  

      The arguments are tough enough without having to argue about 'left-wing biais".  

      At least with them, I can zero out that charge right out of the box with "is that why the RNC uses their figures"?

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Tue Apr 19, 2011 at 02:05:54 PM PDT

      [ Parent ]

  •  Double that payroll tax figure (2+ / 0-)
    Recommended by:
    boophus, Into The Woods

    I don't see it noted specifically, but the typical approach is to describe only the employee's half of the payroll taxes.  As far as I'm concerned, the employer contribution should be treated as a deduction from the employee's paycheck, so the actual cost to the taxpayer is 15.2% of every dollar they make up to $106K.  Anything above that - no Social Security tax.  

    Now look at capital gains - no Social Security or Medicare.

    Which means, of course, that hedge fund managers and stock market gamblers pay 15%.  

    15.2%.  Before any "income tax".  Or 15%.  The total tax.

    The obvious conclusion is that the rich are being taxed too much.  Or it would be, if I was a $&^@%%&#*($ tycoon's lapdog.

    P.S.  It would be nice if the other half was simply added on to the employee's salary, and shown as an additional tax - the amount of which would be deducted from net income.  Aren't companies currently allowed to deduct their half from their taxes?

    I am become Man, the destroyer of worlds

    by tle on Tue Apr 19, 2011 at 07:31:38 AM PDT

    •  I understand but there's two reasons I disagree (0+ / 0-)

      First, it is paid by and reported by the employer as part of the employer's responsibilty for their employees.

      That's a concept that's important to keep and it provides the only way for those numbers to be tracked.

      Second, it is part of the corporate tax load and when comparing the "competitiveness" of national corporate tax "burden" that is one of the elements that are present in other countries, some of which do not have the employee match.  

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Tue Apr 19, 2011 at 02:08:27 PM PDT

      [ Parent ]

      •  I'm not convinced. (1+ / 0-)
        Recommended by:
        Into The Woods

        1. You say

        That's a concept that's important to keep and it provides the only way for those numbers to be tracked.

        That's a real headscratcher.  So in contrast, because FICA and income tax are withdrawn from the employee's paycheck, versus not mentioned at all, it can't be tracked?  Please elaborate.  I must be misunderstanding your comment, because it make no sense to me.  Yes, the employer portion is paid by and reported by the employer - but not on the paycheck.  Why would requiring that the money still come from the employer, but be reported on the paycheck, prevent tracking of the data?

        2. You say

        Second, it is part of the corporate tax load and when comparing the "competitiveness" of national corporate tax "burden" that is one of the elements that are present in other countries, some of which do not have the employee match.
         
        Since corporations deduct that amount, just like they deduct salaries as part of the cost of doing business, I don't think it qualifies as being part of their tax load.  Or would you argue that, because it's a government requirement, that it's a "tax"?  Like, you know, environmental regulation, minimum wage laws, safety regulations, etc.

        I am become Man, the destroyer of worlds

        by tle on Wed Apr 20, 2011 at 08:21:36 AM PDT

        [ Parent ]

        •  Not saying it could not be tracked (0+ / 0-)

          just that I'm using the numbers as they are currently reported.

          If they were reported differently, the statistical analysis would follow the reporting.

          If they had changed it already, that's how I'd be reporting it.  

          If they change, so would I.

          The concept that it is a corporate responsiblity is important enough that failure to pay it represents one of the few potential personal liabilities of members of the board under certain circumstances (though it probably applies to both portions.)  

          Not knowing whether businesses in other countries are allowed to deduct their contributions to the social insurance or safety net programs I'm not sure whether it is apples to apples.  

          But just as has been suggested (McCain et al) for health coverage, it is always possible that such contributions may not always be deductible here either.

          Like I said, the way I am presented it is the way the official sources are reporting it.  That is the biggest factor.  Beyond that,  I'm not that committed either way.

          We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

          by Into The Woods on Wed Apr 20, 2011 at 08:51:51 PM PDT

          [ Parent ]

  •  Every legal cigarette in the country (2+ / 0-)
    Recommended by:
    boophus, Into The Woods

    ..costs the smoker a nickel in Federal taxes whether he's wealthy or poor.

    Care for a cigar?

    An imbalance between rich and poor is the oldest and most fatal ailment of all republics - Plutarch

    by Anthony Page aka SecondComing on Tue Apr 19, 2011 at 07:45:41 AM PDT

  •  Sales Taxes? (1+ / 0-)
    Recommended by:
    Into The Woods

    EVERYONE pays some sort of sales taxes.  Even 8 year-olds spending some allowance money on a Snickers bar.

    Sorry if I missed it in the diary or if I am the 97th person to bring this up.

    Stop. Stand up. Make a sign. Walk around in public. Be polite and orderly and the rest takes care of itself. Want to shake up the Plutocrats? Demonstrate your attention to politics.

    by Quicklund on Tue Apr 19, 2011 at 07:47:47 AM PDT

  •  Social Security should be means tested. It's (0+ / 0-)

    a safety net and if you don't need a net then you shouldn't get the benefit of having one.  

    Preemptive war is like committing suicide for fear of death

    by thestructureguy on Tue Apr 19, 2011 at 08:06:51 AM PDT

    •  Problem is then they would have an argument for (1+ / 0-)
      Recommended by:
      blindcynic

      not paying in to the system. It is like health insurance or any other insurance. To work they require equal benefits and as many as possible paying in.

      Maybe that is why it is called social security insurance.

      Fear is the Mind Killer

      by boophus on Tue Apr 19, 2011 at 11:00:48 AM PDT

      [ Parent ]

    •  It's a Social Insurance Plan (0+ / 0-)

      And while raising the cap on wages subject to the contribution has already been done for Medicare with seemingly no ill effect, making it into a safety net only for the "needy" seriously undermines the program.

      You could make it slightly more progressive than it already is, but that would not produce any sizeable $.

      It would also run into the odd fact that 39 of Americans think they are either in the Top 1% or think they will be sometime in their life.  

      The GOP would kill us with it around election time.

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Tue Apr 19, 2011 at 02:19:54 PM PDT

      [ Parent ]

  •  Media Tax Myths ! (1+ / 0-)
    Recommended by:
    bleedingheartliberal218

    9 Things The Rich Don't Want You To Know About Taxes.
      http://www.wweek.com/...

    American Heart Association: Diet Soda can cause type 2 Diabetes. "Circulation" July 23, 2007. Read it for yourself.

    by jeffrey789 on Tue Apr 19, 2011 at 08:07:50 AM PDT

  •  GOP to get taliwag smacked (0+ / 0-)

    It seems that Obama has taken my advice and contacted Bill Maher to get a bottle of his "GrowAset." He has, apparently, chosen sides and it looks like he has decided on supporting the people and letting morons continue to score own goals without his help.
    Time will tell.

  •  We need a Diary or Article detailing SERVICES of (2+ / 0-)
    Recommended by:
    Into The Woods, cameoanne

    the Federal Government that are used by the rich and corporations, but almost never benefit ordinary taxpayers.

    It would be easier to win the fairness argument if we have the proper talkingpoints on the Federal Service user side of the ledger. Right now, Republicans win the argument with low information voters by pointing at "entitlements" going to the undeserving poor and illegal immigrants.

    Off the top of my head:

    * bailouts of too big to fail banks, while protecting their ability to screw depositors,
    * military action around the globe to protect access to raw materials and natural resources,
    * State Department--trade deals, sales junkets, special worker visas, etc.,
    * transportation--protection, construction and repair of roads, bridges, rail to move their products around,
    * protection of patents and intellectual property, Justice Department action in the US and around the globe
    * tax loopholes -- to fund outsourcing of jobs, e.g.
    * big agriculture and mining subsidies,
    * Treasury Department policies,
    * public safety net that protects corporations who pay low wages and provide no health benefits
    etc.

    Okay, the Government says you MUST abort your child. NOW do you get it?

    by Catskill Julie on Tue Apr 19, 2011 at 09:32:21 AM PDT

    •  I agree, it would be worth getting even (1+ / 0-)
      Recommended by:
      Catskill Julie

      as incidental evidence without trying to amass a comprehensive accounting.

      That's part of the GOP's problem with cutting "foreign aid",  some of it is essentially seed money that paves the way for American business development and creates consumers for American goods.  

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Tue Apr 19, 2011 at 02:22:58 PM PDT

      [ Parent ]

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