… The best bet is for Progressives to target the budget next year. Specifically, they should demand a substantial, probably 10%, increase in taxes on the wealthiest 1% of Americans. Here is why:
Increasing taxes on the rich is pretty popular. In fact, it is one of the most popular things the federal government could do:
CBS News/New York Times Poll. April 1-5, 2009. N=998 adults nationwide. MoE ± 3 (for all adults)."Do you think the tax code should be changed so that middle and lower income people pay less in taxes than they do now and upper income people pay more in taxes than they do now, or don’t you think the tax code should be changed?"
Should be changed: 65%
Should not be changed: 29% The messaging has tons of populist potential, and would be easy to win. Sell it as "let’s take our stuff back," while pointing out that the top 1% of income earners took two-thirds of the benefit from the last economic expansion:They took our stuff from us, and we are taking it back. How can the top 1% argue that they are the only people who add wealth to America? This is the sort of fight that can help Democrats regain the populist mantle heading into 2010. People are worried about deficits, and this would be a lot more popular than cutting spending. It is a clear bright line, an undeniably must-pass piece of legislation, and guaranteed to have 100% Republican opposition. No question about Senate reconciliation for a budgetary measure like this. So, we wouldn’t have to deal with the 60-vote Senate.This seems like a winnable campaign and could shift the balance of economic and political power in this country. After health care, I hope the Progressive Block pivots toward addressing income inequality through a big, progressive change in the tax code.
Given the circumstances, we need to look at the receipts side of the equation. We’ve been forced into a spending bind that isn’t likely to change for some time. And its obvious from the graph that the place where there’s wiggle room right now is INCOME TAX. So I’m out of retirement after a whole day of being graph-free, with a graph and tables that relate to Chris’s point [the top 1% of our wealthiest]. Here are the tables of income levels and taxation results for reference [from The Tax Foundation]:
Dollar Cut-Off [Minimum AGI for tax return to fall into various percentiles] | |||||||||
Year | Top 0.1% | Top 1% | Top 2% | Top 3% | Top 4% | Top 5% | Top 10% | Top 25% | Top 50% |
2001 | $1,324,487 | $292,913 | $199,620 | $161,491 | $140,721 | $127,904 | $92,754 | $56,085 | $28,528 |
2002 | $1,191,673 | $285,424 | $193,600 | $159,364 | $139,997 | $126,525 | $92,663 | $56,401 | $28,654 |
2003 | $1,262,760 | $295,495 | $198,413 | $162,893 | $142,928 | $130,080 | $94,891 | $57,343 | $29,019 |
2004 | $1,548,941 | $328,049 | $216,491 | $175,495 | $152,344 | $137,056 | $99,112 | $60,041 | $30,122 |
2005 | $1,848,791 | $364,657 | $236,741 | $188,534 | $162,297 | $145,283 | $103,912 | $62,068 | $30,881 |
2006 | $2,044,689 | $388,806 | $250,869 | $199,799 | $171,579 | $153,542 | $108,904 | $64,702 | $31,987 |
2007 | $2,155,365 | $410,096 | $261,166 | $207,560 | $178,965 | $160,041 | $113,018 | $66,532 | $32,879 |
This first table showed the bottom cut-off for the different percentile income levels. Just looking down the columns in the Bush years, it’s easy to see what every other graph shows. The wealth inequity is increasing at a very rapid rate. Besides putting us in a world of debt, the net result of the Reagan years and what has followed is that the rich are not just getting richer, they’re getting way richer. That’s what Chris means by "getting our stuff back." What the rich would say is that they are getting their stuff back – the stuff that FDR and the Democrats have been taking away from them all these years. You decide who is right…
Percent of the total AGI earned by each group | ||||||||||
Year | 0.1% | 0.1-1% | 1-2% | 2-3% | 3-4% | 4-5% | 5-10% | 10-25% | 25-50% | 50-100% |
2001 | 8.10% | 17.3% | 4.91% | 3.69% | 3.10% | 2.77% | 11.12% | 22.12% | 20.96% | 13.81% |
2002 | 7.06% | 16.12% | 4.84% | 3.67% | 3.13% | 2.79% | 11.22% | 22.61% | 21.40% | 14.23% |
2003 | 7.57% | 16.77% | 4.85% | 3.66% | 3.11% | 2.79% | 11.18% | 22.50% | 21.15% | 13.99% |
2004 | 9.14% | 19.00% | 4.95% | 3.67% | 3.09% | 2.73% | 10.90% | 21.78% | 20.46% | 13.42% |
2005 | 10.65% | 21.20% | 5.07% | 3.70% | 3.08% | 2.70% | 10.70% | 21.08% | 19.65% | 12.83% |
2006 | 11.22% | 22.06% | 5.09% | 3.71% | 3.08% | 2.71% | 10.66% | 20.84% | 19.33% | 12.51% |
2007 | 11.93% | 22.83% | 5.12% | 3.71%0 | 3.08% | 2.71% | 10.61% | 20.66% | 19.04% | 12.26% |
This second table shows the growing wealth inequity in even more dramatic terms. The lower 50% of Americans live on 12% of the money, which happens to be the same amount made by the top 0.1%. Notice the falling share in the lower groups and the rising share in the upper groups. It makes it kind of hard to sell the idea that we’re taking their stuff…
Percent of the total Federal Income Tax paid by each group | ||||||||||
Year | 0.1% | 0.1-1% | 1-2% | 2-3% | 3-4% | 4-5% | 5-10% | 10-25% | 25-50% | 50-100% |
2001 | 16.06% | 17.83% | 7.43% | 4.88% | 3.82% | 3.24% | 11.64% | 18.01% | 13.13% | 3.97% |
2002 | 15.43% | 18.28% | 7.66% | 5.04% | 4.00% | 3.39% | 11.94% | 18.16% | 12.60% | 3.50% |
2003 | 15.68% | 18.59% | 7.79% | 5.03% | 3.94% | 3.33% | 11.48% | 18.04% | 12.65% | 3.46% |
2004 | 17.44% | 19.45% | 8.06% | 5.10% | 3.86% | 3.21% | 11.07% | 16.67% | 11.85% | 3.30% |
2005 | 19.26% | 20.13% | 8.22% | 5.14% | 33.83% | 3.10% | 10.63% | 15.69% | 10.94% | 3.07% |
2006 | 19.56% | 20.33% | 8.22% | 5.06% | 3.83% | 3.12% | 10.65% | 15.47% | 10.75% | 2.99% |
2007 | 20.19% | 20.23% | 8.26% | 5.07% | 3.77% | 3.11% | 10.59% | 15.37% | 10.52% | 2.89% |
The third table is the stuff of Republican Talking Points. Rush Limbaugh’s recent version, was "The top 5% of wage earners are already paying 95% of the taxes." The correct version would be that "the top 5% of wage earners are now paying more than the bottom 95% of wage earners." If you look at the numbers and ponder what that means, it simply says that the wealth inequity in America is rapidly increasing, but we already knew that. There is a point to note. If you look at the last two tables together, the wealthy really are paying a greater share of the taxes than their share of the income.
Percent of the total AGI paid in Income Tax by each group | ||||||||||
Year | 0.1% | 0.1-1% | 1-2% | 2-3% | 3-4% | 4-5% | 5-10% | 10-25% | 25-50% | 50-100% |
2001 | 28.20% | 26.89% | 21.53% | 18.83% | 17.54% | 16.66% | 14.89% | 11.58% | 8.91% | 4.09% |
2002 | 28.49% | 26.28% | 20.63% | 17.91% | 16.67% | 15.83% | 13.87% | 10.47% | 7.67% | 3.21% |
2003 | 24.64% | 24.04% | 19.10% | 16.35% | 16.06% | 14.20% | 12.72% | 9.54% | 7.12% | 2.95% |
2004 | 23.09% | 23.87% | 19.69% | 16.79% | 15.14% | 14.22% | 12.28% | 9.26% | 7.01% | 2.97% |
2005 | 22.52% | 23.74% | 20.20% | 17.27% | 15.49% | 14.28% | 12.37% | 9.27% | 6.93% | 2.98% |
2006 | 21.98% | 23.62% | 20.34% | 17.24% | 15.64% | 14.53% | 12.60% | 9.36% | 7.01% | 3.01% |
2007 | 21.46% | 23.54% | 20.44% | 17.32% | 15.52% | 14.56% | 12.66% | 9.43% | 7.01% | 2.99% |
[These numbers of what have actually been paid are strikingly less than the published tax brackets.] In every group, the percent of the income being paid in taxes is falling. Since the National Debt is clicking right on up during this period, I personally see this as a Reagan/Bush vote getting technique – only an illusion.
CARTER 1979 |
REAGAN/BUSH I 1991 |
CLINTON 1999 |
BUSH II 2007 |
||||
TAX RATE | OVER | TAX RATE | OVER | TAX RATE | OVER | TAX RATE | OVER |
0% | $0 | 15% |
$0 | 15% |
$0 | 10% |
$0 |
14% |
$19,458 | 28% |
$81,985 | 28% |
$67,517 | 15% |
$16,050 |
16% |
$31,476 | 31% |
$198,091 | 31% |
$163,185 | 25% |
$65,100 |
18% |
$43,495 | 36% |
$248,659 | 28% |
$131,450 | ||
21% |
$68,104 | 40% |
$444,073 | 33% |
$200,300 | ||
24% |
$91,568 | 35% |
$357,700 | ||||
28% |
$115,605 | ||||||
32% |
$140,786 | ||||||
37% |
$171,118 | ||||||
43% |
$201,450 | ||||||
49% |
$262,113 | ||||||
54% |
$343,380 | ||||||
59% |
$489,889 | ||||||
64% |
$626,096 | ||||||
68% |
$929,415 | ||||||
70% |
$1,232,734 |
This is a table of the Tax Brackets [corrected to 2008 dollars] from the end of Carter, Reagan/Bush I, Clinton, and Bush II showing widely variant approaches to raising [or not raising] the money to finance our government.
[…] At other times, it looks something like a war between factions [see taxing thoughts… and more taxing thoughts…]. I think we’ve established that the extreme tax rates of FDR were a bit much, and the slash […]