This 26 April WSJ piece updates the impact of US federal income and social security taxes. Many thanks to TaxProf Blog for the analysis!
A close inspection of this graphic summarizes this US Internal Revenue Service study:
The Bush administration “tax cuts for the rich” have had little impact on reducing the tax burden for middle-class tax payers and above. The top 20% on the income scale still pay 2/3 of the tax bill. Excerpt from the WSJ article:
An IRS study by a trio of tax wonks shows that, even after including Social Security taxes, the overall tax burden grew more progressive from 1979 to 1999. And while that burden became a tad less progressive after the Bush tax cuts of 2001 and 2003, the rich and upper middle class continued to pay far and away the bulk of U.S. taxes.
The nearby bar chart tells the tale. It is based on an analysis of IRS data by Michael Strudler and Tom Petska of the IRS and Ryan Petska of Ernst and Young. The authors found that over the course of 20 years the richest 0.1% of all taxpayers saw their overall tax share double — to 11.05%, from 5.06%. The top 20% of all earners also saw their tax share increase sharply to more than two-thirds of all taxes paid. Meanwhile, the bottom 20% of earners paid only a tiny share in 1979 but saw even that share cut in half 20 years later — including payroll taxes.
As for the windfall for the wealthy alleged to have been provided by the Bush tax cuts, the authors show that the tax share paid by the superrich fell only marginally even after the 1999 data were adjusted for the lower 2003 tax rates. The richest 0.1% would have still paid nearly double the share they paid in 1979 — that is, double what they paid before the Reagan tax cuts of 1981, which were also supposed to have favored the wealthy. As the authors note, “The progressive nature of the individual income tax system is clearly demonstrated.”
Misleading story.
Of course the rich pay a larger share now. Their share of national income has gone up.
Nowhere here is pointed out the real meaningful statistic. If you consider all taxes there is now an effective flat tax system in place in the U.S.. Some of the wealthiest pay a lower share of their income than some of the poorest with the 15% dividend tax rates, tax free bonds and no payroll tax on income above $90,000.
The Reagan sponsered massive increase in payroll taxes to prefund payouts of Social Security is the biggest tax burden on the working poor. Bush is also now trying to disavow those loans from miffle and low income workers that financed the wealthy tax cuts.
Gary Denton
To Garu Denton - self proclaimed liberal news
Like most liberals - you can not or did not read and pulled a sound bite… like YOUR liberal/leftists/marxist friends in politics.
Cut the “crap” about “working poor” most of the poor DO NOT WORK - at least NOT FULLY.
If you contort the question to your ridiculous set of criteria - if you find a flat tax, IF you take only a and B, and not c…..
Um - no the rich do not pay less than the poor - when you consider MOST OF THEM NOT ONLY PAY NOTHING - but they are GIVEN MONEY and BENEFITS from those that do work and PAY!! - NO ONE and I’ll repeat that for the slow (on the left) N O O N E is stopping YOU and your buddies from paying MORE - and NOONE would deny you the chance to do so..the problem is when you put YOUR HAND IN MY!!!! POCKET!!!!
My home is in the midwest but the economy there (are CONTROLLED by Democraps) is suffering, because they’ve made it UNPLEASANT, EXPENSIVE and unworkable for business…. thus (cause/effect???) the jobs moved. I travel 6 hours away for a good job in an area - TA-DA - not controlled by crazy fanatics. I have seen plenty of people cry poor but they spend much of their time COMPLAINING and not doing ANYTHING to help themselves. The Leftist Robin Hood attitude is just plain jealousy and THEFT.
The major problem with tax codes today is that the only ones that can prosper from the loopholes are the rich. They are the only ones that can afford accountants to place their income in tax shelters and other loopholes to prevent paying taxes thus leaving the bulk of the burden on the middle income families. It might be difficult for you to understand but the middle income families are breaking under the pressure. One can only handle so much in debt before they fall. Until this country puts a national healthcare plan together and creates a flat-tax rate problems will grow until the middle-income families disappear altogether. Who will pick up the tab formerly paid by the middle income families when they disappear - the rich? I don’t think so.
Bush fits in perfectly with the rich, probably because he is a spoiled little brat who like his daddy and granddaddy before him had the accountants to hide their money. Hell, Bush jr never completed his military requirement yet nobody makes any noise about it; why? How can Bush continue to run this country on the constantly growing deficit? Why doesn’t the IRS audit the governmental agencies then force them to come clean? Where is all the so-called funds sent to Iraq? I can understand losing a hundred dollars or so but where did the billions of dollars vanish? Did it line the pockets of Bush, Cheney, and the companies that ensured control over the oil in Iraq? Was it part of a payoff deal? It is high time that “We The People” forced congress into making these thieves come forward under oath to answer for their crimes including the so-called loss or misplacement of funds stolen from the American public. When Bush and his Bushite crowd entered the White House eight years ago, illegally I might add, there was no deficit. Our country had a surplus for the first time in decades. It took Bush less than six months to siphon off the funds then do everything in his power to dismantle social security along with other programs that people rely on each day.
As all of this is happening, it is putting more and more financial debt on the middle income families that have always bore the brunt of the tax payments. What happens when the middle income families disappear? Will the rich and famous step up to the plate and pay their fair share for a change or will they simply move to one of their sweat-shop countries, renounce their citizenship in the USA, and live off their exorbitant incomes while everyone else remaining dies a slow death while the government taxes those who can least afford it? Middle income families are now and have been for some time come to be the “working poor.” Incomes are falling yet taxes are rising. Nobody can save money to send their children to college because it takes every dime to pay the bills and keep the mortgages out of foreclosure. What are the rich doing without? Nothing, that’s what they are doing without - NOTHING!
Yes Virginia, there was once a group of people known as the working poor. This is the legacy we are leaving for our children and grandchildren, who btw, will be paying down the Bush debt well into the future because the richest of the rich refuse to come down off their pedestal to do their fair share.
Rich people have their 401K plans whereas the rest of the country must rely on Social Security Retirement because the companies they served for a lifetime didn’t care. They refused to allow these people enough income to begin a 401K let alone add to it each paycheck. The middle income families must pay the bills, cover the mortgages, and raise their children with no guarantee that they will have the funds available to send these children to college, unlike Bush and his kind who knew by the time they were born they would attend the very best Ivy League colleges in the country or abroad. The Pell Grant is only a drop in the bucket when a young junior or senior considers the possibility of attending medical school. Nobody can afford the millions of dollars one has to borrow to attend medical school or law school. The ones that try find that there is a brick wall along the way preventing them from going further and that brick wall is usually in the form of lack of finances so the young person has to leave college to take a full-time, lesser quality job, and still have to pay back all the student loans were Joe and Jane Kennedy along with Bush and his kind have their parents and grandparents giving money hand over fist so their children have the best education possible.
When did someone pass the law that says only the rich should have access to law school, medical school, or even to attend a university? It is hitting my small rural town hard. Two years ago, many of the graduates that completed high school with my oldest child began their education at various universities. Today, two years later, more than 3/4 of those students had no choice but to return. Many are not enrolled at the local college in hopes of taking their steps small but steadily forward This change has nothing to do with their lack of education. In fact, many of the students were A and A/B honor roll students! The reason they had to leave college universities is because the children nor their families can afford the costs of attending universities. Some have given up on college altogether, which is sad because these children had such potential to make a difference and the only thing standing in their way is finances.
Until this country begins to make changes as those of other countries where education is free, therefore giving all who wish to continue to a university the opportunity to do so without fear of not having enough money or the ability to borrow enough to cover the expenses of attending a university. In addition, it is high time that we adopt other measures practiced by other countries. It is time we as United States citizens remove the deluge that sits in the White House and place someone there as well as changing out the congressional leaders with those who follow the will of the people so we can start a national healthcare system that follows the examples set by France, Germany, Sweden, Canada, UK, and even Cuba! If Cuba can offer free healthcare then for goodness sakes the USA can do it! What does one person need with a few million dollars? Why should CEOs of a company take billion dollar bonuses while this person’s employees cannot make ends meet and they have no healthcare for their families, which in the long run costs time away from work?
In the last eight years, I have seriously thought of moving to another country such as Canada, France, Sweden, or one of the others just for their healthcare programs alone! Unfortunately, I have a family. My mother, stepfather, MIL, and even my dad are not in the best of health so I stay because I cannot imagine not being here with them. So many people online and off went off on a tangent of outrage when Johnny Depp made the statement that he would remain in France for the sake of his children and the intellect of those living near him. The schools are considerably better in France as well as Japan, Canada, and Briton. The United States is supposedly the greatest superpower country on the planet yet our government can send billions of dollars of aid to third-world countries. It can pay full expenses to bring foreigners here for medical care unavailable in these people’s home country. The cream of the crop surgeons and other specialists donate their time while the hospitals donate their facilities to care for the unfortunate third-world families yet these same hypocrites tell families with United States citizenship to take their ill children home to die despite the fact that surgery exists to make these children well. What is wrong with this picture?
Some will say that the United States has the most technologically advanced medical facilities in the world. I agree. The United States makes great strides in medicine and surgical procedures; however, what good is having this advanced technological medical advances when only the top 5% have access to it? What do the rest of us do? Should we simply pack our bags and move to Mexico as some nasty republicans claim each time someone calls them on their lack of morality or remind them that charity begins at home?
Personally, I would not mind a physician obtaining public funds that originate from the taxes paid by hard-working citizens of this country IF the government would include a clause within the contract for grants and even loans where these physicians must treat X number of indigent patients without insurance at all in addition to treatment X number of Medicare and Medicaid recipients. Additionally, I believe that any physician that receives any monies from grants and/or loans should spend at least 10 years after graduation and internship working in low-income neighborhoods working in free clinics where anyone can seek medical treatment, obtain it, and have the physician treat said patients as if they are real people with real feelings and real fears versus shoving them through like cattle just to ensure the physician can finish up in plenty of time to get in a round of golf.
Quote:
“My home is in the midwest but the economy there (are CONTROLLED by Democraps) is suffering, because they’ve made it UNPLEASANT, EXPENSIVE and unworkable for business…. thus (cause/effect???) the jobs moved. I travel 6 hours away for a good job in an area - TA-DA - not controlled by crazy fanatics. I have seen plenty of people cry poor but they spend much of their time COMPLAINING and not doing ANYTHING to help themselves.” End of Quote.
The reason the economy is so bad where you live by dear fellow US citizen has nothing to do with the Democrats. YOUR REPUGNANTS ARE THE REASON THE ECONOMY IS IN THE TOILET! Thank them for the job not done. Bush and Cheney siphoned off the surplus in a matter of months then went about their way creating trillion dollar debts that we will be fortunate if our great-great-grandchildren ever pay it off. BTW, it must be nice to afford a vehicle that can allow you to drive 6 hours away for work. You are one of the lucky ones who can afford to purchase a car every few years from the wear and tear of going so far from home not to mention the cost of fuel alone. You have your old buddy Bush and his Bushites to thank for your lot in life.
If I hear one more person snipe about how people in this country are angry about the economy, I am going to blow. The average middle-income Americans cannot continue footing the bills. It is time the CEOs and board of directors start cutting their salaries then giving their employees enough money to survive. Spread the freaking wealth! Do you really need a summer home in the Hamptons? Must you keep your condo at Montauk? I guarantee if you begin to take care of your employees, they will be much more open to the idea of taking care of you; however, snubbing your snobbery in the faces of the working public is an ignorant and inhumane thing to do. So many people work hard to climb off the trash heap to make a better life for themselves. Heck, for years I worked 2 and 3 jobs at a time while attending college at night working toward two degrees. The upside is that I did receive more income during the year but at the end of the year I had to borrow money to pay the taxes on the income earned despite the fact that even with 2 and 3 jobs at the time I still barely earned enough to keep a roof over my and my child’s head, groceries on the table, the utilities paid, and working as hard as I could to keep that clunker of a car running because there was no way possible I could afford to add a car payment on top of the bills. My ex-husband ran off with a 16-year-old girl he had been sleeping with since she was 15 years old. The day he left he made it clear he was “tired of paying bills, tired of taking care of a kid, and tied of all the responsibility.” He walked out without so much as giving his 10-month-old daughter a kiss or a hug. In fact, he never paid support and after a year or so, he stopped coming by to see her or even call her.
The joke was eventually on my ex-husband. Rather than crying over the jerk, I picked myself up, dusted off the dirt from my backside, and threw myself into my work and into my studies. It would be another five years before I even considered marriage again and even then, it was a long engagement because I wanted to be sure this was the right thing. I thought after three years dating before it was right but I missed that one by a mile so I was more cautious the next time around despite the pleading of my then boyfriend and now second husband’s proposal of marriage.
My oldest child is in her second year of college in the medical field to become a nurse while the other recently graduated from the elementary school to middle school. My oldest has ADD whereas her sibling is in the AIG program (academically and intellectually gifted). In 5th grade this child was reading 8 and 9th grade books. They know the meaning of hard work. In fact, my oldest worked at a public job from the time she was 15 years old right up until now and never in those years did she go without a job. now, she has a career, which allows her to obtain first-hand on-the-job training that helps her tremendously in her studies.
I don’t want my children to work as hard as their dad and I did and still do for that matter. I am on disability because of multiple health problems but I still work as a freelance writer when I can find the work. I am losing my sight to a hereditary retinal disease, which has already cost me a great deal of vision. It has been over a decade since I could drive a car. In addition, I fight the long hard battle with lupus (Systemic lupus erythematosus), Sjogren’s disease, and Fibromyalgia. I work to teach my children that it is possible for everyone to be a viable member of society. Sure, it is not the money I was knocking back before but with the recession Bush has thrown this country into, chances are high that I would not earn as much as I did before hand because of these unfair taxes. My oldest works double shifts at a respite care center and continues to attend college full time. She picks up shifts during the week when it doesn’t interfere with her class schedule. At 20 years old, she is making a car payment on a 2008 car that her dad signed with her to buy. She pays her insurance on the car along with taxes. She also covers her fuel and upkeep on the car. In addition to her cell phone bill, she helps with the internet bill and picks up a few groceries for the nights she cooks. I am extremely proud of her. I only wish this economy would get out of the crapper so life will be easier for her when she is ready to take the step where she is ready for her own home.
It irks me terribly that this child who is working her backside off to go to college and is not eligible for the Pell Grant because she works even though it takes her entire check to cover her bills. On top of all that, she has had to pay in taxes for the last three years! She works despite a bad hip after this idiot t-boned the driver’s side door. Since he was a cop, the blue wall came up and the idiotic cop on the scene charged her with the wreck! The other drive (the cop) pulled out in front of her though she got the ticket as he laughed all the way to the bank to cash the check to purchase his brand new truck. All I can say is that karmic justice can be a bitch and I only hope I am able to hear about it landing directly on the a$$hole’s head.
The one thing that you need to remember is that no matter how hard one works, it does not always guarantee an income that can pay all the bills while allowing one to set money aside for catastrophes. We don’t live in the land of Utopia. We live in the real world. Perhaps after a few days in a mental ward you will figure that one out too.
As for Robin Hood… I think the middle Income America as well as the poverty-stricken Americans (NOT the illegal aliens; its time to send them packing somewhere besides the US. Send them back to Mexico or wherever they originated!) could sure use a Robin Hood these days. It wouldn’t hurt if Robin brought about his Merry Men. Perhaps then his gang could remove that idiot in the White House along with his flunkies and put them in jail for all the laws they broke over the past 8 years.
I meant to say that many of the graduates of two years ago ARE ENROLLED at the local college. It is because the kids nor their parents can afford the high costs of universities.
Again, these young adults do not have last names like Kennedy, Cheney, Rice, Bush, etc… their parents would never use pull from unethical or unscrupulous people to toss out another child in order to get their child into the universities. These parents here are decent, hard-working people with high morals, unlike the actions we all know Bush Sr. took with his son to ensure that idiot went through college and the military. I still find it difficult to wrap my head around the fact that Shrub flunked out of everything he did including his final military requirements, lost a ton of family money on every financial venture he ever touched yet this country allowed his selection the first time then his election the second.
The repugs that voted for him deserve all the misery that man has put on this country; however, those of us that did not vote for the whiny dunce should not suffer for the ignorance of others….