The goal of this diary is to add context to the continuing debate here regarding the current state of the economy and on how to best move forward.
One thing I have noticed is many believe the deal cut on January 1 setting federal taxes did nothing to address inequity. We focused on the removal of the 2% SS tax holiday and the great betrayal of allowing those who make $250k to $450k off the hook for taxes increases.
An article released the other day from AP tells a more complicated story.
More below the fold...
The key to the article starts early:
For 2013, families with incomes in the top 20 percent of the nation will pay an average of 27.2 percent of their income in federal taxes, according to projections by the Tax Policy Center, a research organization based in Washington. The top 1 percent of households, those with incomes averaging $1.4 million, will pay an average of 35.5 percent.
Those tax rates, which include income, payroll, corporate and estate taxes, are among the highest since 1979.
If you read the whole article, you'll see some very annoying crybaby nonsense about how this is a bad thing, countered with some decent counterpoints for once from congressional leaders on the left, including this point on the proposed Buffet Rule:
"It's fairness," said Sen. Claire McCaskill, D-Mo. "We're not raising taxes with the Buffett rule as much as we are correcting an inequity in terms of, one guy can be working at one end of the hall and because he's working with hedge funds, he gets taxed at 20 percent. Another guy at the other end of the hall is on a salary at an insurance company and he has to pay (39.6 percent). That's just not fair."
Very nicely said IMO. But the gist of the article is that today, in early 2013, we have the most progressive rules on federal taxes in decades, those making between $250k - $450k notwithstanding:
Still, their numbers (between two studies) track closely enough to make some general observations. For example, it is clear that for 2013, average tax bills for the wealthy will be among the highest since 1979. It also is clear that federal taxes for middle- and low-income households will stay well below their averages for the same period.
Liberals and many Democrats say rich families can afford to pay higher taxes because their incomes have grown much more than incomes for middle- and low-income families.
I believe I am reaching the limits of fair use on this article so I would encourage any who are interested to go read the whole thing.
The article closes by strongly suggesting enough is enough (I assume it was written by someone with a vested interest), and there is also a bit where they quote President Obama as saying no it is not yet enough and he wants more as part of his Grand Bargain.
But the key takeaway is this - we raised taxes for the wealthy on Jan 1 and we now have a tax code where the rich pay more vs the poor to a greater extent than at any time in the past 30 years.
Good enough? No, not in my opinion.
But progress towards a more fair and just society. Yes.
Let's keep going in this direction.
Cheers.