More on Taxes and "The Rich"

[JohnStOnge]

Though I wish I could find a similar set of estimates including years later than 2005, I still think the CBS estimates in the letter at http://www.cbo.gov/ftpdocs/98xx/doc9884 ... Letter.pdf" onclick="window.open(this.href);return false; pertaining to taxation, income, and numbers of households in the United States for the years 1979 - 2005 lend insight into the role of "The Rich" in sustaining this country. Key here is the point that the numbers describe TOTAL federal tax liabilities and not just the income tax. That is important because those on the "left" often claim that looking at total federal taxes instead of just income taxes would significantly change the basic picture. I'll probably do more with this stuff but here are a few initial observations one can derive by doing a little math:

1) In 1979, the top 9 percent of income earning households accounted for 40.6 percent of the total federal taxes "contributed" to the United States treasurey. In 2005 they accounted for 54.7 percent.

2) In 1979, the bottom 40 percent income earning households accounted for 9.3 percent of the total federal taxes paid. In 2005 they accounted for 4.9 percent.

3) In 1979, the United States collected $4,785.20 per person in the country in 2005 dollars (inflation adjusted). In 2005, the United States collected $6,708.10 per person in the country. That is an increase of about 40 percent in inflation adjusted terms. United States population estimates are available at http://www.tsl.state.tx.us/ref/abouttx/census.html" onclick="window.open(this.href);return false;.

4) In 1979, the average of federal taxes paid by households in to top 0.01 percent of income earners was $3,166,666.67 in 2005 dollars. In 2005, that average was 11,809,090.91. That is an increase of 273 percent.

5) In 1979, the average of federal taxes paid by households in the bottom 20 percent was $447.58 in 2005 dollars. In 2005, that average was $178.30. That is a decrease of 60 percent.

Given trends like that, how is it that those on the "left" sometimes get away with creating the impression that "The Rich" do not pay their "fair share" of Federal taxes? How is it that they get away with creating the impression that the burden carried by "The Rich" has decreased?

Also, note that the tax paid per unit population increased significantly in inflation adusted terms over the period. That, to me, is consistent with the view that the system we have set up is unsustainable. I think it will continue to get more and more expensive as the population ages and new programs are added.

Yes, you can say that it is necessary to spend more now. But that is the point. It is only "necessary" if one accepts the paradigm that the federal government is responsible for insuring the well being of each individual. Get rid of that paradigm and it isn't necessary at all.

[kalm]

Though I wish I could find a similar set of estimates including years later than 2005, I still think the CBS estimates in the letter at http://www.cbo.gov/ftpdocs/98xx/doc9884 ... Letter.pdf" onclick="window.open(this.href);return false; pertaining to taxation, income, and numbers of households in the United States for the years 1979 - 2005 lend insight into the role of "The Rich" in sustaining this country. Key here is the point that the numbers describe TOTAL federal tax liabilities and not just the income tax. That is important because those on the "left" often claim that looking at total federal taxes instead of just income taxes would significantly change the basic picture. I'll probably do more with this stuff but here are a few initial observations one can derive by doing a little math:

1) In 1979, the top 9 percent of income earning households accounted for 40.6 percent of the total federal taxes "contributed" to the United States treasurey. In 2005 they accounted for 54.7 percent.

2) In 1979, the bottom 40 percent income earning households accounted for 9.3 percent of the total federal taxes paid. In 2005 they accounted for 4.9 percent.

3) In 1979, the United States collected $4,785.20 per person in the country in 2005 dollars (inflation adjusted). In 2005, the United States collected $6,708.10 per person in the country. That is an increase of about 40 percent in inflation adjusted terms. United States population estimates are available at http://www.tsl.state.tx.us/ref/abouttx/census.html" onclick="window.open(this.href);return false;.

4) In 1979, the average of federal taxes paid by households in to top 0.01 percent of income earners was $3,166,666.67 in 2005 dollars. In 2005, that average was 11,809,090.91. That is an increase of 273 percent.

5) In 1979, the average of federal taxes paid by households in the bottom 20 percent was $447.58 in 2005 dollars. In 2005, that average was $178.30. That is a decrease of 60 percent.

Given trends like that, how is it that those on the "left" sometimes get away with creating the impression that "The Rich" do not pay their "fair share" of Federal taxes? How is it that they get away with creating the impression that the burden carried by "The Rich" has decreased?

Also, note that the tax paid per unit population increased significantly in inflation adusted terms over the period. That, to me, is consistent with the view that the system we have set up is unsustainable. I think it will continue to get more and more expensive as the population ages and new programs are added.

Yes, you can say that it is necessary to spend more now. But that is the point. It is only "necessary" if one accepts the paradigm that the federal government is responsible for insuring the well being of each individual. Get rid of that paradigm and it isn't necessary at all.

This is wage driven and simply a transfer of wealth from the middle class upwards. Do you really think the top 1% is complaining about their growth and current situation?

[Appaholic]

Though I wish I could find a similar set of estimates including years later than 2005, I still think the CBS estimates in the letter at http://www.cbo.gov/ftpdocs/98xx/doc9884 ... Letter.pdf" onclick="window.open(this.href);return false; pertaining to taxation, income, and numbers of households in the United States for the years 1979 - 2005 lend insight into the role of "The Rich" in sustaining this country. Key here is the point that the numbers describe TOTAL federal tax liabilities and not just the income tax. That is important because those on the "left" often claim that looking at total federal taxes instead of just income taxes would significantly change the basic picture. I'll probably do more with this stuff but here are a few initial observations one can derive by doing a little math:

1) In 1979, the top 9 percent of income earning households accounted for 40.6 percent of the total federal taxes "contributed" to the United States treasurey. In 2005 they accounted for 54.7 percent.

2) In 1979, the bottom 40 percent income earning households accounted for 9.3 percent of the total federal taxes paid. In 2005 they accounted for 4.9 percent.

3) In 1979, the United States collected $4,785.20 per person in the country in 2005 dollars (inflation adjusted). In 2005, the United States collected $6,708.10 per person in the country. That is an increase of about 40 percent in inflation adjusted terms. United States population estimates are available at http://www.tsl.state.tx.us/ref/abouttx/census.html" onclick="window.open(this.href);return false;.

4) In 1979, the average of federal taxes paid by households in to top 0.01 percent of income earners was $3,166,666.67 in 2005 dollars. In 2005, that average was 11,809,090.91. That is an increase of 273 percent.

5) In 1979, the average of federal taxes paid by households in the bottom 20 percent was $447.58 in 2005 dollars. In 2005, that average was $178.30. That is a decrease of 60 percent.

Given trends like that, how is it that those on the "left" sometimes get away with creating the impression that "The Rich" do not pay their "fair share" of Federal taxes? How is it that they get away with creating the impression that the burden carried by "The Rich" has decreased?

Also, note that the tax paid per unit population increased significantly in inflation adusted terms over the period. That, to me, is consistent with the view that the system we have set up is unsustainable. I think it will continue to get more and more expensive as the population ages and new programs are added.

Yes, you can say that it is necessary to spend more now. But that is the point. It is only "necessary" if one accepts the paradigm that the federal government is responsible for insuring the well being of each individual. Get rid of that paradigm and it isn't necessary at all.

This is wage driven and simply a transfer of wealth from the middle class upwards. Do you really think the top 1% is complaining about their growth and current situation?

Not nearly as loudly as the low/no income about the "rich" not paying their fair share while collecting unemployment for 80+ weeks....

[blueballs]

Given trends like that, how is it that those on the "left" sometimes get away with creating the impression that "The Rich" do not pay their "fair share" of Federal taxes? How is it that they get away with creating the impression that the burden carried by "The Rich" has decreased?

Because economics isn't taught in public schools and the media is largely in the tank of liberal politicians and don't call them out on their lies.

[JohnStOnge]

This is wage driven and simply a transfer of wealth from the middle class upwards. Do you really think the top 1% is complaining about their growth and current situation?

I almost wrote about that because I figured somebody would say that but my post was already way long. The data in that letter I linked do not support the "transfer of wealth" view because every single income range reported had a higher inflation adjusted average income in 2005 than it did in 1979. It is true that the top levels had a larger increase. But every group had an increase.

Here's how the estimates went in 2005 dollars (1979 listed first then 2005):

Lowest quintile: $15,700 in $15,900, up 1%.
Second quintile: $34,000 to $37,400, up 10%.
Third quintile: $51,000 to $58,500, up 15%.
Fourth quintile: $69,000 to $85,200, up 23%.
81st through 90th Percentiles: $89,700 to $120,600, up 34%
91st through 95th Percentiles: $110,500 to $161,800, up 46%.
96th through 99th Percentiles: $162,400 to $269,800, up 66%
99 through 99.5th Percentiles: $286,500 to $588,100, up 105%
99.5th through 99.9th Percentiles: $461,700 to $1,207,200, up 161%.
99.9th through 99.99th Percentiles: $1,190,500 to $4,699,500, up up 295%
Top 0.01 Percent: $7,333,000 to $35,473,200, up 384%

Now, if you want to appeal to the class envy gene by noting that the extent to which households enjoyed higher incomes increased as household income rose you can obviously do that. But it also was clearly not a "redistribution" situation. It was not a "fixed pie" situation in which those at the bottom lost some of their piece as it was acquired by those at the top. Instead, the pie clearly got much bigger and everybody got a somewhat bigger piece. Nothing was "taken" from the lower income groups and "given" to the higher income groups.

Every defined group except the one at the very bottom advanced substantially. And the one at the very bottom did not lose ground. When it comes to the "Middle Class," if that is defined as the 20th Percentile through the 80th percentile, I can tell that when I do the math I'm going to find that group had an average income somewhere around 20% higher in 2005 than it was in 1979 in inflation adjusted terms. As I wrote in another thread: The idea that there has been a "redistribution" from the middle class to the upper class is a myth.

[JBB]

JohnStOnge you have hit the nail on the head. People buying into Obama and the left are not informed. Its a shame 47% of the american households paid no income tax and more people than ever are dependent on the government for their income. Changing that is the change we all can believe in. Its why this formally great country of ours is now poor instead of rich like we used to be.

[houndawg]

JohnStOnge you have hit the nail on the head. People buying into Obama and the left are not informed. Its a shame 47% of the american households paid no income tax and more people than ever are dependent on the government for their income. Changing that is the change we all can believe in. Its why this formally great country of ours is now poor instead of rich like we used to be.

I guess it isn't just football.


Most of you here are too young to remember where the tax brackets were when the US was at it's peak and the American lifestyle the envy of the world.

[biobengal]

The data in that letter I linked do not support the "transfer of wealth" view because every single income range reported had a higher inflation adjusted average income in 2005 than it did in 1979. It is true that the top levels had a larger increase. But every group had an increase.

You should have stopped there..... your data are the perfect rebuttal.

Here's how the estimates went in 2005 dollars (1979 listed first then 2005):

Lowest quintile: $15,700 in $15,900, up 1%.
Second quintile: $34,000 to $37,400, up 10%.
Third quintile: $51,000 to $58,500, up 15%.
Fourth quintile: $69,000 to $85,200, up 23%.
81st through 90th Percentiles: $89,700 to $120,600, up 34%
91st through 95th Percentiles: $110,500 to $161,800, up 46%.
96th through 99th Percentiles: $162,400 to $269,800, up 66%
99 through 99.5th Percentiles: $286,500 to $588,100, up 105%
99.5th through 99.9th Percentiles: $461,700 to $1,207,200, up 161%.
99.9th through 99.99th Percentiles: $1,190,500 to $4,699,500, up up 295%
Top 0.01 Percent: $7,333,000 to $35,473,200, up 384%

[kalm]

This is wage driven and simply a transfer of wealth from the middle class upwards. Do you really think the top 1% is complaining about their growth and current situation?

I almost wrote about that because I figured somebody would say that but my post was already way long. The data in that letter I linked do not support the "transfer of wealth" view because every single income range reported had a higher inflation adjusted average income in 2005 than it did in 1979. It is true that the top levels had a larger increase. But every group had an increase.

Here's how the estimates went in 2005 dollars (1979 listed first then 2005):

Lowest quintile: $15,700 in $15,900, up 1%.
Second quintile: $34,000 to $37,400, up 10%.
Third quintile: $51,000 to $58,500, up 15%.
Fourth quintile: $69,000 to $85,200, up 23%.
81st through 90th Percentiles: $89,700 to $120,600, up 34%
91st through 95th Percentiles: $110,500 to $161,800, up 46%.
96th through 99th Percentiles: $162,400 to $269,800, up 66%
99 through 99.5th Percentiles: $286,500 to $588,100, up 105%
99.5th through 99.9th Percentiles: $461,700 to $1,207,200, up 161%.
99.9th through 99.99th Percentiles: $1,190,500 to $4,699,500, up up 295%
Top 0.01 Percent: $7,333,000 to $35,473,200, up 384%

Now, if you want to appeal to the class envy gene by noting that the extent to which households enjoyed higher incomes increased as household income rose you can obviously do that. But it also was clearly not a "redistribution" situation. It was not a "fixed pie" situation in which those at the bottom lost some of their piece as it was acquired by those at the top. Instead, the pie clearly got much bigger and everybody got a somewhat bigger piece. Nothing was "taken" from the lower income groups and "given" to the higher income groups.

Every defined group except the one at the very bottom advanced substantially. And the one at the very bottom did not lose ground. When it comes to the "Middle Class," if that is defined as the 20th Percentile through the 80th percentile, I can tell that when I do the math I'm going to find that group had an average income somewhere around 20% higher in 2005 than it was in 1979 in inflation adjusted terms. As I wrote in another thread: The idea that there has been a "redistribution" from the middle class to the upper class is a myth.

First of all there is a difference between income and wealth distribution. The reason 1/2 of all Americans pay little to no income tax is because their wages are low despite increased productivity. And many of the top income earners have benefitted greatly from this through globalization and the shift from a manufacturing based economy to a financial services/gambling based economy. Again, I don't think you'll find too many at the top who are seriously complaining.

And while your figures are adjusted for inflation, does that also include the rising cost of home prices, education, and health insurance - the latter of which used to be covered by many more employers?

I'll make you deal, you cut the wealth envy meme from your arguments and I won't accuse you of being a sycophant who needs to get off the wealthy's dick.

[BDKJMU]

Latest income tax data (08')
Top 1%: earned 20% AGI, paid 38% of income taxes
Top 5%: earned 34.73% AGI, paid 58.72% of income taxes
Top 10%: earned 45.77% AGI, paid 69.94% of income taxes
Top 25%: earned 67.38% AGI, paid 86.34% of income taxes
Top 50%: earned 87.25% AGI, paid 97.3% of income taxes
Bottom 50%: earned 12.75% AGI, paid 2.7% of income taxes
http://www.taxfoundation.org/news/show/250.html" onclick="window.open(this.href);return false;
Looks like the "so called rich" are paying MORE than their fair share of income taxes.

[kalm]

Latest income tax data (08')
Top 1%: earned 20% AGI, paid 38% of income taxes
Top 5%: earned 34.73% AGI, paid 58.72% of income taxes
Top 10%: earned 45.77% AGI, paid 69.94% of income taxes
Top 25%: earned 67.38% AGI, paid 86.34% of income taxes
Top 50%: earned 87.25% AGI, paid 97.3% of income taxes
Bottom 50%: earned 12.75% AGI, paid 2.7% of income taxes
http://www.taxfoundation.org/news/show/250.html" onclick="window.open(this.href);return false;
Looks like the "so called rich" are paying MORE than their fair share of income taxes.

And yet for many of them, their tax rates have never been lower. Hmmmmm.

[Baldy]

Latest income tax data (08')
Top 1%: earned 20% AGI, paid 38% of income taxes
Top 5%: earned 34.73% AGI, paid 58.72% of income taxes
Top 10%: earned 45.77% AGI, paid 69.94% of income taxes
Top 25%: earned 67.38% AGI, paid 86.34% of income taxes
Top 50%: earned 87.25% AGI, paid 97.3% of income taxes
Bottom 50%: earned 12.75% AGI, paid 2.7% of income taxes
http://www.taxfoundation.org/news/show/250.html" onclick="window.open(this.href);return false;
Looks like the "so called rich" are paying MORE than their fair share of income taxes.

And yet for many of them, their tax rates have never been lower. Hmmmmm.

...and before the economy tanked, the revenues to the government had never been higher. Hmmmmm

[kalm]

And yet for many of them, their tax rates have never been lower. Hmmmmm.

...and before the economy tanked, the revenues to the government had never been higher. Hmmmmm

And economy tanked due to deregulation and lots and lots of free money. Hmmmmmmm. Hmmmmmmm.

[Baldy]

...and before the economy tanked, the revenues to the government had never been higher. Hmmmmm

And economy tanked due to deregulation and lots and lots of free money. Hmmmmmmm. Hmmmmmmm.

And both were due to government policy, but that doesn't change the fact that revenues to the government were much higher with lower taxes. Hmmm Hmmmmm Hmmmmmmmmmmmmmmmmmmmmmmm.

[kalm]

And economy tanked due to deregulation and lots and lots of free money. Hmmmmmmm. Hmmmmmmm.

And both were due to government policy, but that doesn't change the fact that revenues to the government were much higher with lower taxes. Hmmm Hmmmmm Hmmmmmmmmmmmmmmmmmmmmmmm.

And it was government policy that benefited the rich and corporations who were paying the lowest tax rates. BTW, how did the revenues look in 1928? Hmmmmm hmmmmmmm cough cough.

[Baldy]

And both were due to government policy, but that doesn't change the fact that revenues to the government were much higher with lower taxes. Hmmm Hmmmmm Hmmmmmmmmmmmmmmmmmmmmmmm.

And it was government policy that benefited the rich and corporations who were paying the lowest tax rates.

And it increased total tax revenues. It is a win/win!

BTW, how did the revenues look in 1928? Hmmmmm hmmmmmmm cough cough.

Much better than in 1920 when most of the tax burden was on the "poor" and middle class.

[CitadelGrad]

...and before the economy tanked, the revenues to the government had never been higher. Hmmmmm

And economy tanked due to deregulation and lots and lots of free money. Hmmmmmmm. Hmmmmmmm.

Exactly what deregulation caused the economy to tank? Are you talking about the non-regulation of Fannie and Freddie?

[blueballs]

And economy tanked due to deregulation and lots and lots of free money. Hmmmmmmm. Hmmmmmmm.

Exactly what deregulation caused the economy to tank? Are you talking about the non-regulation of Fannie and Freddie?

... and the shell game played by the Wall Street primary dealers and their lapdogs at Moody's and Standard and Poors with the MBS market?

[grizzaholic]

And both were due to government policy, but that doesn't change the fact that revenues to the government were much higher with lower taxes. Hmmm Hmmmmm Hmmmmmmmmmmmmmmmmmmmmmmm.

And it was government policy that benefited the rich and corporations who were paying the lowest tax rates. BTW, how did the revenues look in 1928? Hmmmmm hmmmmmmm cough cough.

Hummmmmmm



Hummmmmmm

[JohnStOnge]

You should have stopped there..... your data are the perfect rebuttal

No, they are not. The myth is that the rich have become better and better off as the middle class and poor have become worse off. Part of the myth is that the middle class and poor have become worse off because the rich have become better off. Those data are not consistent with that outlook. There is no evidence, at all, in that data that the middle class and poor are worse off now than they were in 1979. They suggest that, instead, the poor are about in the same place and the middle class are substantially better off. There is no evidence in those data of a "redistricution" from the middle class and poor to the rich.

[JohnStOnge]

First of all there is a difference between income and wealth distribution. The reason 1/2 of all Americans pay little to no income tax is because their wages are low despite increased productivity. And many of the top income earners have benefitted greatly from this through globalization and the shift from a manufacturing based economy to a financial services/gambling based economy. Again, I don't think you'll find too many at the top who are seriously complaining.

And while your figures are adjusted for inflation, does that also include the rising cost of home prices, education, and health insurance - the latter of which used to be covered by many more employers?

I'll make you deal, you cut the wealth envy meme from your arguments and I won't accuse you of being a sycophant who needs to get off the wealthy's dick. :

Yes there is a difference between income and wealth distribution. But I was responding to this statement:

This is wage driven and simply a transfer of wealth from the middle class upwards.

I think you will agree that wealth and income are highly correlated overall. And taxes are, in one way or another based on income. If you were to say that the only reason why the "rich" paid a larger percentage of the taxes in 2005 than they did in 1979 is because they advanced more than others did I would agree with that. But you put in that thing about a wealth transfer from the middle class upwards. As far as I know there is absolutely no evidence of that.

If you have an inflation adjusted "wealth distribution" comparison between the "middle class" and the "rich" that shows that the "middle class" has less wealth in inflation adjusted terms now than it did in 1979, feel free to provide it.

I think that is unlikely. I think that if the middle 60 percent of the population had an inflation adjusted income in 2005 that was 17.6 percent higher than it was in 1979 it's very likely that the average wealth of the middle 60 percent in 2005 was also higher than the inflation adjusted average wealth was in 1979.

[kalm]

And economy tanked due to deregulation and lots and lots of free money. Hmmmmmmm. Hmmmmmmm.

Exactly what deregulation caused the economy to tank? Are you talking about the non-regulation of Fannie and Freddie?

Non-regulation is a good way to describe Fannie and Freddie and yes that contributed.

But Graham-Leach-Bliley and the deregulation of derivatives markets had more to with it.

[kalm]

First of all there is a difference between income and wealth distribution. The reason 1/2 of all Americans pay little to no income tax is because their wages are low despite increased productivity. And many of the top income earners have benefitted greatly from this through globalization and the shift from a manufacturing based economy to a financial services/gambling based economy. Again, I don't think you'll find too many at the top who are seriously complaining.

And while your figures are adjusted for inflation, does that also include the rising cost of home prices, education, and health insurance - the latter of which used to be covered by many more employers?

I'll make you deal, you cut the wealth envy meme from your arguments and I won't accuse you of being a sycophant who needs to get off the wealthy's dick. :

Yes there is a difference between income and wealth distribution. But I was responding to this statement:

This is wage driven and simply a transfer of wealth from the middle class upwards.

I think you will agree that wealth and income are highly correlated overall. And taxes are, in one way or another based on income. If you were to say that the only reason why the "rich" paid a larger percentage of the taxes in 2005 than they did in 1979 is because they advanced more than others did I would agree with that. But you put in that thing about a wealth transfer from the middle class upwards. As far as I know there is absolutely no evidence of that.

If you have an inflation adjusted "wealth distribution" comparison between the "middle class" and the "rich" that shows that the "middle class" has less wealth in inflation adjusted terms now than it did in 1979, feel free to provide it.

I think that is unlikely. I think that if the middle 60 percent of the population had an inflation adjusted income in 2005 that was 17.6 percent higher than it was in 1979 it's very likely that the average wealth of the middle 60 percent in 2005 was also higher than the inflation adjusted average wealth was in 1979.

So I decided to play nice and come up with some numbers for you by googling your phrase "If you have an inflation adjusted "wealth distribution" comparison between the "middle class" and the "rich". What I found was the following article from 2006 by Paul Krugman:

http://www.informationclearinghouse.inf ... e15923.htm" onclick="window.open(this.href);return false;



It doesn't have the raw stats you favor and I'm sure you'll heavily consider the source, but none the less, Krugman is very well researched and I'd love to see you pick his points apart.

[houndawg]

Great article. Putting a bounty on the uber-rich looks like a viable solution for slowing the redistribution. Say, 5k for kneecapping one and 50k for a pelt.

[kalm]

Great article. Putting a bounty on the uber-rich looks like a viable solution for slowing the redistribution. Say, 5k for kneecapping one and 50k for a pelt.

And that brings up an important distinction. "Uber-rich" is the key word here. We're not talking about going after AZ, or Joltin Joe wealth here. They're producers. We're talking about those who actually gambled, stole, or inherited their way to wealth.

These guys would be a good place to start:
(I wonder why you they're not as popular with conks as Fannie and Freddie )

[youtube][/youtube]