None of this makes any economic and moral sense — unless one is as ideologically blind as our re-elected president.
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In addition, in 2009 the top 20% paid nearly 70% of all federal taxes, while earning 50% of the income. The middle 20% of income earners, again the true middle class, paid 9% of federal taxes, which was about two-thirds of their share of income at 15%. That means the top 1% alone that year paid way over twice the share of total federal taxes, at 22%, as the entire middle class, at 9%. Finally, the bottom 20% paid 0.3% of all federal taxes.
So, again, the only reasonable conclusion that can be drawn is that the rich pay more than their fair share of all federal taxes as well, according to official U.S. government sources. The President surely knows what official government data says. So he appears to be trying to deceive a majority of Americans to achieve radical, extremist, far left goals that he knows Americans will not support if they know the truth. Read his own books and autobiographies to see what those radical, far left views are. Or you can check out the book, The Communist, by Paul Kengor.
But shouldn’t the rich be paying the same tax rates as the middle class? Shouldn’t billionaires pay the same tax rates as their secretaries? Isn’t that only fair?
Yes, it is. That is why leaders like Steve Forbes, Dick Armey and Steve Moore have proposed a flat tax, where everyone pays the same tax rate. That is the most fair tax system. Under a pure flat tax, if Steve Forbes earns 20 times what Dick Armey does, then he would pay 20 times the tax. But President Obama staunchly opposes a flat tax.
The rich already pay more at higher tax rates than everyone else, again according to official IRS data, as reported by CBO. In 2009, the top 1% paid an average federal tax rate of 29%, the middle 20% paid an average federal tax rate of 11.1%, and the bottom 20% paid an average federal tax rate of 1%. Obama and the Democrats are not being honest about the U.S. tax code, which is already the most progressive in the world.
President Obama, we don’t need you to make the tax code fair. President Reagan already did that. Mr. President, you need to ask yourself what is fair about double digit unemployment, record shattering $2 trillion deficits, galloping national debt that threatens us with the same national bankruptcy as Greece, declining middle class wages and incomes, and more Americans in poverty than at any time in the past 50 plus years, according to official U.S. government data reported by the Census Bureau.
Higher Taxes and Less Revenue
But don’t we need the revenue to balance the budget? And can’t the rich afford that better than the middle class?
In the exit polls of the last election, when voters were asked “Should taxes be raised to help cut the budget deficit?” 63% answered no, to 33% who answered yes. That was the right answer, because the budget cannot be balanced by raising taxes.
CBO estimates, based on static analysis and not considering the negative economic effects, that all of President Obama’s tax increases on couples making over $250,000 a year, and singles making over $200,000, would raise just $34 billion a year, or just 3% of the $1.1 trillion deficit, as Larry Kudlow comments in Investor’s Business Daily on November 9.
But that is surely an overestimate of the resulting revenues. Over the last 45 years, every time the capital gains tax has been raised, capital gains revenues have declined rather than increased.
The capital gains tax rate was raised 4 times from 1968 to 1975, from 25% to 35%. The 25% rate produced real capital gains revenues in 1968 of $40.6 billion in 2000 dollars. By 1975, at the higher rate, capital gains revenues totaled $19.6 billion in constant 2000 dollars, less than half as much.
After the capital gains rate was cut from 35% to 20% from 1978 to 1981, capital gains revenues had tripled by 1986 compared 1978. Then the capital gains rate was raised by 40% in 1987 to 28%. By 1991, capital gains revenues had plummeted to $34.4 billion, down from $92.9 billion in 1986, in constant 2000 dollars adjusted for inflation. Obama’s capital gains tax increase next year will reduce capital gains revenues again as well.
Similarly, when President Bush slashed the income tax on corporate dividends, dividends paid soared, and revenues from that dividends tax skyrocketed as well. With Obama’s tax on dividends reversing the Bush tax cut, those revenue gains will be reversed as well.
And if the comprehensive tax rate increases push the entire economy back into recession next year, as argued above, federal revenues overall will decline rather increase, increasing rather than reducing the federal deficit and debt.
What is fair about that? Higher taxes, but with lower rather than higher revenues. As I said at the outset, none of this makes any sense.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?