Wednesday, July 13, 2011

Tax unfairness hurts the rich?

I've been meaning to take John Cornyn and Orinn Hatch out to the rhetorical woodshed for their comments about income tax "unfairness."

Sure, it's true that about 46 percent (not 51) of U.S. households will pay no income tax in 2011, while 18 percent will have no tax liability because they have no labor income, and 17 percent are elderly with no income, or elderly with income below $20,000.

So essentially, Cornyn, Hatch & Co. want 28 percent of households to pay up. But are they right? Are the lower and middle classes not paying their fair share?

Although it's true that the richest 20 percent of Americans pays nearly 70 percent of federal taxes, and the top 1 percent alone pays nearly 30 percent, it's also true that richest 20 percent earns more than 60 percent of all U.S. income, and the top 1 percent alone earns more than 20 percent. Moreover, the top 20 percent owns 75 percent of all U.S. net wealth, with the top 1 percent alone owning about 35 percent of all net wealth!

If we look at all taxes (federal, state, and local) the system skews farther toward the rich's favor. The top 20 percent (top quintile) of income earners pays about 30 percent of its annual income in taxes, whereas the bottom 20 percent (bottom quintile) pays about 17 percent of its income, the second quintile pays about 20 percent, the third (middle) quintile pays 25 percent of its income, and the fourth quintile pays nearly 29 percent.

That is, the fourth quintile, made up of people making average $66,000 per year, pays nearly the same percent of its income in taxes (28.5%) as the top 1 percent, made up of Americans earning average $1.3 million per year (30.8%). That is tax unfairness, just not the kind Republicans complain about. There is even unfairness among the richest quintile: I mean, is it fair that somebody earning $100,000 pays 30.2 percent in taxes, nearly the same share as somebody earning over $1 million??


Clearly, the super rich -- specifically the top 1 percent -- are not taxed nearly enough. Don't believe Republicans' lies and disinformation. This is especially relevant when discussing the national debt and where to find revenue vs. where to cut spending. To find more revenue, go after the millionaires who aren't paying their fair share! It's tremendously simple. That is, if you believe at all in the principle of progressive taxation -- the principle that those who earn more, pay more. If you don't, then you must be a millionaire or a talk radio/FOX zombie who has been tricked into opposing his own economic interests. --> This is not class warfare, mind you, just simple math and a simple principle that those who earn more should pay more.

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