Obama has loudly claimed that he will be raising taxes on the wealthy so they can pay their “fair shair” and he’ll lower taxes on the poorest Americans to help alleviate the “burden” they pay. Well, the WSJ has some outstanding analysis on the 2006 IRS data that was just released here. One of the myth’s that is completely shattered here is the myth that Bush’s tax cuts in some way benefitted the wealthy at expense of the poor. Liberals love to play with “funny math” and point to some ulterior motive that Bush really just wanted to reward his rich buddies by cutting taxes. However, the data shows that the 2003 tax cuts amounted to the largest increase in tax payments by the rich in American history. As the Journal points out “No President has ever plied more money from the rich then Geoge W. Bush did with his 2003 tax cuts.”
Here is just what some of the data shows:
- The top 1% of taxpayers (income over $388,806) paid 40% of all income taxes (highest share in 40 years)
- The top 10% (income over $108,904) paid 71% of all income taxes.
- Americans below the median income level paid a record low of 2.9% of all income taxes
- Americans above the median income level paid 97.1% of all income taxes
- The top 1% earned 22% of all reported income, but paid a share of taxes that is nearly double their share of income.
The WSJ also points out some other interesting nuggets from this data. They point out that the number of millionaires in America has doubled since 2003 from 180,000 to 354,000. As they state: “This is precisely what supply-siders predicted would happen with lower tax rates on capital gains, dividends and income. The economy and earnings would grow faster, which they did; investors would declare more capital gains and companies would pay out more dividends, which they did; the rich would invest less in tax shelters at lower tax rates, so their tax payments would rise, which did happen.”
Obama wants to raise taxes on the rich. One must wonder if this is because he truley wants to help the American economy or if he wants to engage in class war-fare to garner more votes from embittered poor voters. I’ll assume it is probably the latter, because “(i)f Mr. Obama does succeed in raising tax rates on the rich, we’d also wager that the rich share of tax payments would fall. The last time tax rates were as high as the Senator wants them — the Carter years — the rich paid only 19% of all income taxes, half of the 40% share they pay today. Why? Because they either worked less, earned less, or they found ways to shelter income from taxes so it was never reported to the IRS as income.”
This is how economics works folks. It is not a simple up and down as many suspect (this goes for the supply/demand paradigm too). Economics is often very complicated, but the math does not lie.
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