America's Richest Will Pay More Under Obama's Tax Plan

[one...two...tree 2,762]

The ideologues who manage the Wall Street Journal's editorial pages have emerged, over recent years, as America's most unrelenting -- and shameless -- defenders of wealth and privilege. They enjoy the work. They do it well. No one turns reality upside-down any better. Take, for instance, the Journal editorial last week that defended George W. Bush from charges that his administration tilts to the wealthy. George W.'s tax policies, the Journal pronounced, have actually "caused what may be the biggest increase in tax payments by the rich in American history." Any Bush "giveaway to the rich," the Journal editorial added, exists only as "a figment of the left's imagination." The Journal offered some evidence for these bold assertions. According to just-released IRS statistics, the paper noted, America's richest 1 percent paid 40 percent of all income taxes in 2006, their "highest share in at least 40 years."

Case closed? Not quite. The rich, as a group, are indeed paying a larger share of the nation's income tax dollars, but only because they're pocketing a much larger share of the nation's income. As individuals, the IRS data show, the rich are actually paying less -- far less -- of these incomes in taxes than they have in years.

In fact, if average taxpayers in the top 1 percent had paid taxes in 2006 at the same rate as the top 1 percent paid taxes 20 years ago in 1986, those average top 1 percent taxpayers would have each paid $136,518 more in 2006 taxes than they actually did.

What do the McCain and Obama campaigns feel about this top-tilting tax status quo? Both campaigns had a chance to explain last week in the nation's capital, at the 2008 Presidential race's first debate devoted purely to taxes. The host for the event: the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, two bedrock pillars of the capital's policy wonk community.

Tax Policy Center researchers last month published a preliminary analysis of just how the McCain and Obama tax plans would likely play out. The researchers unveiled an updated analysis at last Wednesday's debate, 56 dense pages of numbers and charts.

But one set of numbers stood out in that numerical mass: the Tax Policy Center's comparison of which Americans would pay more in taxes under the McCain and Obama plans and which would pay less.

Under the McCain plan, the Tax Policy Center figures indicated, Americans in the top 0.1 percent -- that's everyone making at least $2,871,682 -- would average $192,645 less in taxes in 2012 than they would if the current tax situation were simply extended.

After-tax incomes for the top 0.1 percent, if the McCain tax plan became law, would jump five times faster than after-tax incomes for taxpayers in the middle of the U.S. income distribution and 15 times faster than average incomes for the poorest fifth of Americans.

Under Obama's tax plans, the top 0.1 percent would pay more in taxes, not less -- an average $788,959 more. Middle- and low-income Americans, by contrast, would see sizeable tax cuts. These cuts, according to the Tax Policy Center analysis, would save Americans in the middle almost four times more than the savings they would see from the McCain plan. Poor Americans would save 30 times more under Obama than McCain. At last week's debate, Obama's lead expert -- University of Chicago economist Austan Goolsbee -- spoke first. Not surprisingly, Goolsbee welcomed the Tax Policy Center numbers. McCain's tax plan, he energetically charged, would "magnify" the "regressive" legacy of the George W. Bush years.

Onlookers in the packed Urban Institute meeting room then hunched forward for the McCain campaign response -- from Douglas Holtz-Eakin, a former White House Council of Economic Advisers chief economist. Would Holtz-Eakin blast the Tax Policy Center for propagating misleading information? Would he try to deny that the lion's share of the tax savings from the McCain plan would go to taxpayers at the top of the nation's economic ladder? He would not.

Holtz-Eakin made no challenge whatsoever to the Tax Policy Center's numbers on the distributional impact of the McCain tax plan. He simply ignored them -- and orated instead on "what John McCain is trying to accomplish" with his tax proposals. And what's that? McCain's plans, Holtz-Eakin asserted, focus on "creating jobs and economic growth." That sound familiar? Here's why: The Bush White House used the exact same rationale, back in 2001 and 2003, to justify its tax cuts for the wealthy. But don't credit George W. with any originality on that score. Two decades earlier, in 1981, Ronald Reagan made the same case -- that tax cuts for the rich bring an economic growth that benefits everybody. Ronald Reagan's tax cuts and George W.'s tax cuts delivered nothing of the sort. These cuts didn't "grow" a healthy economy. They merely grew the wealthy's share of America's economic pie. And they didn't just grow the wealthy's share of that pie. They doubled it.

In 1986, this month's newly released data from the IRS document, America's top 1 percent collected 11 percent of the nation's income. In 2006, these top 1 percent taxpayers took home twice that share, 22 percent.

In sum, tax cuts for the wealthy clearly work. For the wealthy.

Sam Pizzigati is the editor of the online weekly Too Much, and an associate fellow at the Institute for Policy Studies.

http://www.alternet.org/module/printversion/93057

[Heracles 417]

Marxism 101..

[w¡n9Nµ7 §£@¥€r 123]

Middle- and low-income Americans, by contrast, would see sizeable tax cuts. These cuts, according to the Tax Policy Center analysis, would save Americans in the middle almost four times more than the savings they would see from the McCain plan. Poor Americans would save 30 times more under Obama than McCain.

And THAT should have been the headline.

Appeal to peoples self interests, not to their sense of class envy.

[Peikko 1,575]

What's so funny is that those who would benefit most (as being in the middle income bracket) under these types of tax proposals are so willing to scoff at them in favour of allowing the richest 1% to prosper more. Talk about cutting off your nose to spite your face.

[IAMX 3,055]

People are suckers way too much for the general terms of "raising" and "lowering" taxes. Firstly, a President really has no authority to raise and lower most taxes, if not a single one of them. This is levied by Congress, and the taxes can go against the President's wishes without the President's authority.

Secondly, McCain's strategy of Congress taxing less only means those rich he taxes less have more money to give to him (for being a mouthpiece), or more money to use to brainwash more Americans into thinking hefty spending and taxing less somehow are good things.

Thirdly, Obama is for raising taxes against the rich, but in there Congress also levies tax breaks/subsidies constantly for rich people to counter it. There are also constant loopholes like in 1099's that business owners can use to circumvent wage taxes. As a business major, doing books for family friends, this I've seen for myself, and it's rampant, and needs to stop.

Obama's peddling to be a champion of the middle class, fully knowing the rich benefit just as much as they would with McCain. Probably because Americans are too busy smiling and nodding to the lip service and empty promises given to them. Every. Single. Time.

"Change"

"Change this"

"Change that"

.. no, nothing is going to change.

These guys don't even debate anymore. Given the #### ups by Bush and Kerry in the last ones, I can see why. Hard to play mouthpiece when you don't have some PAC talking for you or doing a commercial with as many outtakes as necessary.

Anyways, this "tax the rich" thing, while a good idea in theory, is a joke in reality.

[Heracles 417]

What's so funny is that those who would benefit most (as being in the middle income bracket) under these types of tax proposals are so willing to scoff at them in favour of allowing the richest 1% to prosper more. Talk about cutting off your nose to spite your face.

We can see how well this wealth distribution policy is working in the UK.

According to the Tax Foundation, the top 1% of wage-earners in this country pays nearly 40% of the burden (an 11% INCREASE over 1999, when WHO was President? Oh that's right...Bill Clinton).

Well, you may be saying, 'that's because they have ALL the wealth!' Wrong again. The top 1% of earners account for just 21% of the total adjusted gross income. They're paying DOUBLE what they should be.

By the way, the top 10% of earners pay 70% of the load.

When you get all the way down to the top 50% of earners, they account for 96.4% of the entire tax burden.

The next 10% pays 3.6%.

And the bottom 40% of wage earners...pay NOTHING. That's right, nothing. In fact, they pay nothing, and then often get a "refund" (handout) at years end.

Edited August 6, 2008 by Aficionado

[Peikko 1,575]

Another one of your throw away one liners BY? I am sure you do have some kind of meaning behind your post, but it's damned elusive!

[Heracles 417]

Another one of your throw away one liners BY? I am sure you do have some kind of meaning behind your post, but it's damned elusive!

Yes unlike your informative 2 liners.

PS I like how you skipped the bottom part of that post..

Edited August 6, 2008 by Aficionado

[Ban Hammer 13,352]

imagine that.

[Nessa 23]

If I was the president of the United States, I'd have everybody paying the same % of their income. I'd be fair.

[Dan J 277]

If I was the president of the United States, I'd have everybody paying the same % of their income. I'd be fair.

Only it would never work. In order to cover the federal budget, everyone would be paying 20-30% of their income in taxes. It would be a tax cut for the richest 5% in the country. But it would absolutely suck for everyone else.

[Peikko 1,575]

Another one of your throw away one liners BY? I am sure you do have some kind of meaning behind your post, but it's damned elusive!

Yes unlike your informative 2 liners.

PS I like how you skipped the bottom part of that post..

Mirror, mirror on the wall...

I love the reflected statements, they are just so cozy and warm. Thanks guys, you made my day.

[Heracles 417]

I love the reflected statements, they are just so cozy and warm. Thanks guys, you made my day.

Well I don't actually expect a logical post from you.

Or even a rebuttal if you disagreed with the one line.

[Amby 490]

oh taxes. I kinda agree with nessa that people should all pay the same percentage.

[Peikko 1,575]

You did read the post where it was explained that such an approach would lead to there being an even greater deficit in the federal budget and the average guy in the street (that's you and me) would be a lot worse off?

Fair's fair though, of course.