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How dare Mitt Romney feed the right-wing lie that 47% of Americans are moochers who don't pay any taxes!  We all pay taxes, even those too poor to owe federal income taxes, and I guarantee you the pain of paying taxes hits the poor and middle class far more severely than it hits Mitt Romney and the 1%!  Follow me below, and you'll see our tax system is actually quite regressive.

Federal income taxes are one of the few progressive taxes left in America, though less progressive than they used to be.  State and local taxes, payroll taxes, sales and consumptions taxes and many others are regressive with respect to income.

But why do we only compare taxes to income?  The ability to pay taxes without feeling it comes from wealth as much as or more than from income, and wealth is far more unequal in our nation than income.  Take a look at the numbers below comparing taxes with wealth--the results are shocking!

Estimated 2010 Average Total Taxes Paid in U.S. by Quintile:

                Average Income  Average Wealth  Total Taxes   % of Income  % of Wealth

Bottom 20%       $12,500                 $0           $2,000          16.2%        infinite

Second 20%       $25,300           $5,000           $5,200          20.7%          104%

Middle 20%        $40,700        $102,000         $10,200          25.1%            10%

Fourth 20%        $66,300        $274,000         $18,900          28.5%              6.9%

Next 19%         $140,000     $1,300,000         $43,100          30.8%              3.3%

Top 1%          $1,254,000   $17,600,000       $376,200          30.0%              2.1%

Mitt Romney $21,700,000  $230,000,000+   $3,000,000+        14+%         under 2%

The bottom 40% of Americans pay more in taxes than their entire net worth every year, while Romney and the 1% pay only about 2% of their wealth in total taxes.  Compared to wealth, our tax system is highly regressive. These are the numbers that Mitt Romney and the GOP do NOT want you to see!

Notes:

These figures are total taxes, federal, state and local, including income, estate, corporate, payroll, sales, property, and other taxes.  

Tax and income estimates are based on data from Citizens for Tax Justice.  

Wealth distribution figures are derived from the 2011 Norton and Ariely study that found wealth inequality is much greater than most Americans think it is, and far greater than they say it ought to be (even according to Republicans!). The Norton and Ariely study attributed 0.1% of total wealth to the bottom 20%, but other sources suggest there is on average no or negative net worth at this level, so zero is a fair estimate there. I also used estimates of about $57 trillion in total private wealth of U.S. households (probably higher now), and an estimate of about 113 million households.

For Mitt Romney, I used the figures he released for 2010 and Forbes estimates of his wealth (not including $100,000,000 in trust funds for his sons, and who knows what wealth he may be hiding).  He has probably paid more taxes in other forms than this, but it would be a total guess for me to estimate them.  I will note, however, that when he says he paid at least 13% taxes in prior years, he never says "income taxes", so he may be estimating total taxes of all kinds.

One assumption in this table is that most people are in the same quintiles for both income and wealth.  To the extent this is not true, it only means that those at the top of the wealth ladder have lower average incomes and pay even less in taxes, while those on the lower rungs pay more in taxes relative to their wealth.  So the real disparity is probably even greater than what this table indicates.

All of these numbers are estimates, and I welcome anyone with better numbers.  Averages vary by state and locality, but the basic picture is clear.  When all taxes are included, our overall tax system is barely progressive with respect to income (and regressive at the top end).  It is highly regressive if wealth is taken into account.  Taking into account both wealth and income, do you think the taxes paid by the bottom 20% or the top 1% has a greater effect on their quality of life?  

Don't forget, if the Ryan/Romney plan were implemented (including no capital gains taxes, etc.), Romney's federal income tax would fall to almost nothing, while ending many tax deductions would raise taxes on the middle class.  Economic disaster and needless suffering would be the result.

We need more progressive taxation (including a stronger estate tax) for the health of our economy, for survival of the poor, for fairness to the middle class, for prevention of an entitled aristocracy of wealth, for democracy and opportunity, for investment in the future, and ultimately for a system that works for everyone, even the 1%.

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Comment Preferences

  •  Tip Jar (8+ / 0-)

    Civil marriage is a civil right.

    by UU VIEW on Tue Sep 18, 2012 at 12:42:59 AM PDT

  •  You make a good point, UU VIEW. I haven't (3+ / 0-)
    Recommended by:
    valadon, Lawrence, UU VIEW

    heard much mention of regressive taxes in quite a while. Grover Norquist seems to have set the tone, and it's time we fought back. Regressive taxes take so much more from those who can afford it the least.

    "The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

    by Lily O Lady on Tue Sep 18, 2012 at 12:52:48 AM PDT

  •  You make some excellent points. (2+ / 0-)
    Recommended by:
    buffie, UU VIEW

    It drives me nuts that journalists let the GOP, Mitt Romney, and conservatives get away with claiming that the poor pay no taxes.

    The poor and lower middle class pay plenty of taxes and it hurts them a lot more than anyone else.

    We definitely need a more progressive tax system across the board.

    Tipped and recced for piecing it all together.

     

    "A candle loses nothing by lighting another candle" - Mohammed Nabbous, R.I.P.

    by Lawrence on Tue Sep 18, 2012 at 01:47:05 AM PDT

    •  Thanks, (1+ / 0-)
      Recommended by:
      Lawrence

      I find it frustrating that so few people seem to understand that the burden of taxation actually falls harder on the poor and middle class, while we have cut, cut, cut taxes for the rich.

      It's not about "soaking the rich," either, it's about having an economy and a system of government that works.  As Bill Clinton would say, it's arithmetic.

      Civil marriage is a civil right.

      by UU VIEW on Tue Sep 18, 2012 at 05:31:55 AM PDT

      [ Parent ]

  •  Yup... (1+ / 0-)
    Recommended by:
    buffie

    The only way to avoid taxes is to get paid in cash under the table and buy everything on the black market.

    "Ich bin ein Dachs!"

    by PvtJarHead on Tue Sep 18, 2012 at 01:56:29 AM PDT

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