I am usually a calm and collected person so rarely does the situation happen when I read an article and spit out the proverbial coffee. I happened to see an article cross-posted at The Huffington Post that summarized the newly released tax data on the top 400 income earners from the last couple of years. This data was first available under the Clinton administration but was kept confidential by the Bush administration to hide the fact that the mega rich were barely paying taxes.
In 2007 the top 400 taxpayers had an average income of $344.8 million, up 31 percent from their average $263.3 million income in 2006, according to figures in a report that the IRS posted to its Web site without announcement that were discovered February 16.
Yep, that's right. The top 400 income earners income increased 31% in single year when the bottom 90% income rose only 13% over the previous 15. All this while the collective tax rate fell close to half a percentage point.
Their effective income tax rate fell to 16.62 percent, down more than half a percentage point from 17.17 percent in 2006, the new data show.
Not only did their effective tax rate decrease that year it has been following a trend since 1995 of lowering from a then 30% of total income.
While as maddening as this may seem that while income has exploded over 400% (that's a quadrupling in only 15 years which means a 10% constant growth rate year over year) their effective tax rate has been almost cut in half.
The full data spread available here (PDF Warning)
This shows exactly what the bush tax cuts did for America as we have known all along. It has exploded total income for the mega rich while significantly decreasing the amount they pay in taxes. All of the deficits run over the past decade could mostly likely have been mitigated had the Bush tax cut's not been passed.
But let's not beat a dead horse into a pulp as this has been said multiple times.
What this entails is that we need to let the Bush tax cuts expire and raise taxes to 1995 levels if we want to put a dent in the budget deficit. Republicans can talk all they want about cutting medicare and social security benefits which they label so deceivingly as entitlement reform but the fact of the matter is when the government is receiving significantly less from it's largest tax base then no matter what there are going to be deficits.