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Thursday, October 21, 2004

That's a lot of kung pao

When I was a kid, one of the children's publications we used to read had a feature called "Fun Facts to Know and Tell."

I couldn't help but think of that column when I read the following facts in today's paper:

The United States carries the biggest deficit and debt loads among the world's advanced economies, borrowing a daily $1.7 billion from abroad, mainly from China and Japan.

So the money we're putting in rich people's pockets through the tax cuts is really just being borrowed from the Chinese. Wow. So the American kids who are dying to supposedly "democratize" Iraq are doing so while our leaders put us further and further in debt to the last communist superpower. With serious nukes.

We vote these clowns back in, we deserve everything we get.

Comments (11)

if you think President Bush is padding the pockets of the rich, please tell me how you refute the proof offered by the excellent, not so conservative reporter, Bartlett

October 21, 2004, 8:58 a.m.
Fair Share & More
The rich are doing there tax-paying part — and then some.

Last week, the Internal Revenue Service released data on distribution of the income-tax burden in 2002. They put a lie to John Kerry’s contention that the rich are not paying their fair share and should be taxed more.

The IRS data divide taxpayers into percentiles according to their adjusted gross incomes. Following is the share of aggregate income taxes paid by each group:

Income Group: Tax Share
Top 1 percent: 33.7 percent
Top 5 percent: 53.8 percent
Top 10 percent: 65.7 percent
Top 25 percent: 83.9 percent
Top 50 percent: 96.5 percent
The data also reveal that despite the Bush tax cuts, the income tax is still highly progressive — taking more from each group as their incomes rise. The following percentages measure the taxes paid by each group divided by their income. Economists call this the average or effective tax rate.

Income Group: Tax Rate
Top 1 percent: 27.25 percent
Top 5 percent: 22.95 percent
Top 10 percent: 20.51 percent
Top 25 percent: 16.99 percent
Top 50 percent: 14.66 percent
Bottom 50 percent: 3.21 percent
Finally, the data show that the rich are not only paying tax rates as high as they were during the Clinton administration, even after large tax cuts in 2001 and 2002, but they are doing so even as their incomes have fallen. The aggregate income of the top 1 percent was down 26 percent between 2000 and 2002. In 2000, the income threshold for getting into the top 1 percent was $313,469. By 2002, that figure had fallen to $285,424, reflecting the slow economy and weak stock market.

This doesn’t mean we should shed tears for the rich. They’re still doing pretty well. But these data raise serious questions about Kerry’s class-warfare agenda. How much more taxes does he think rich people should pay?

Poll data suggest that the wealthy are already paying more than the bulk of Americans think they should. A Zogby poll last year asked people what a fair tax rate would be for a person making $1 million per year — an income that would put someone in the top tenth of the top 1 percent of taxpayers. Seventeen percent of Americans said that 10 percent was the most he should pay and 29 percent said that 20 percent was the maximum.

In other words, 46 percent of the American people think that millionaires today are already overtaxed, paying about 28 percent of their income to the federal government when 20 percent is the most they ought to pay. Only 21 percent of people in the survey agreed with Kerry that tax rates should be higher than 30 percent.

Lest one think that this is an isolated result, there are other polls with similar findings. A 2001 Fox News poll asked people to indicate the highest percentage of taxes anyone should have to pay. Fifty-two percent said 20 percent was the most anyone should pay. Only 9 percent of people favored rates above 30 percent. Another Fox News poll in 1999 found 65 percent of people saying that 20 percent should be the maximum tax rate.

One possible reason for these results is that people think taxes are a lot higher than they really are. According to a new study by economists Alan Blinder and Alan Krueger, when asked for the current tax rate on a typical family, the average response was 31.3 percent. The Census Bureau says the correct answer is 23.4 percent. In 2002, the average household’s income was $57,852 and it paid $13,529 in taxes.

This overestimation of the tax burden on the middle class may help explain why it has supported the Bush tax cuts despite a constant drumbeat of media reports saying that only the rich have benefited. A Princeton University study recently concluded that people are basically irrational for favoring tax cuts for the rich at the same time that they believe inequality is a growing problem.

A better explanation is that many Americans think they have a chance of becoming rich some day. A Gallup poll last year found that 31 percent of Americans thought they would become rich. Among those between the ages of 18 and 29, the figure jumped to 51 percent.

For this reason, even sophisticated leftists recognize that class warfare is a non-starter in American politics. As columnist Bob Kuttner recently put it, “Because nearly everyone identifies upward, you don’t gain traction in American progressive politics by baiting the rich.” Mark Penn, Bill Clinton’s pollster, put it this way: “The more government tries to monkey with income distribution, the more people dislike it.”

Mr. Kerry should have listened to them.

— Bruce Bartlett is senior fellow for the National Center for Policy Analysis. Write to him here.

Lars: I'll send you a bill for the bandwidth.

Yeah, of course the rich are paying most of the taxes. That's because they're making most of the money -- the tax is a percentage of income. Tax rates for the rich have gone way down. I pay in the high 20%s -- guys like Dick Cheney pay 15% on their dividends, thanks to Bush.

Let's face it, if it were up to you, we'd have a national sales tax or just a capitation tax -- so much per person per year, no matter what they make. That's your kind of progam.

Trust me, my little radio friend, your hero -- the guy who was so coked up he couldn't even show for a National Guard physical -- is using the tax system to screw the middle class and bankrupt the country in the process.

See you at the inauguration.

"Yeah, of course the rich are paying most of the taxes."

Jack, do you honestly believe progressive taxation is proper? I'm not being snarky, I really am curious. Do you believe folks should pay a higher percentage to taxes as their income increases?

Tax policy and the bankrupting of America may be only a small part of the Bush legacy. Taking our nation into agressor nation status for the first time in our history is a sorry condition that will haunt us in the international community for generations to come. We can no longer claim the moral high ground. To obtain this grand new status we have paid with the lives of 1100 of our young men. How many of these heroes do you think came from these families of the rich?

I am surprised no one is mentioning how much America owes China.

Interesting, Michael -- does that mean that we could claim the moral high ground before? I thought that after Vietnam and Watergate we all came to the realization that America was just as much a bad guy as anywhere else? Oh, wait: That's before Vietnam was transformed into "defending our country" for John Kerry's election run. And geez, our Middle Eastern policy that people refer to when they object to messing around there -- we gave the Taliban weapons! We brought Saddam Hussein into power! -- did that allow us to claim the moral high ground? Or is it just that now that a Republican is in office, he's responsible for all of the bad stuff we've ever done? I think the "now we've lost the moral high ground" argument is just as silly (and revisionist) as the "and now the terrorists hate us" one.

coked out draft dodger for bush!

good post jack. one thing most people don't realize is that more than 10% of our deficit with China is WALMART! I heard a wonderful piece on NPR about textile workers in the SE who were out of work because the jobs had been shipped to china. there were being interviewed outside of Walmart with thier shopping carts of "Not Made in the USA" items.


Boy, this is scary. Lars is sounding level-headed and moderate and Jack Bog is ranting like a lunatic. I can't wait until this election season is over.

Regardless of the reasons for it, if the US ever defaults on its debt, or if enough people become down and out, rich people have the most to lose from the resulting instability. How would you like to live in Dunthorpe, trying to protect your big house, trying to prevent your wife from being raped, trying to protect your ephemeral securities, etc. from masses of the down and out?

On the other hand, if rich people could oversee just enough instability to preserve the economy, and take advantage of fire sale prices, we could get a lot richer.

It doesn't make sense that the Chinese would lend us billions of dollars which enable us to place freakin' huge aircraft carriers off their coast and stand in their way of taking over Taiwan. Don't believe everything you read.

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