Great charts on why our tax system is f@#ked up from an unlikely source

[yurbud]

the heritage foundation.

I was looking for some historical data on the top income tax rate, and their charts turned up near the top of my results.

The first confirms what I've heard and read before. The top rate has tumbled over the last couple of decades:



Additionally, revenue from corporations has remained roughly constant while those from individuals has shot up.



Their chart on sources of income is illuminating too. The increase has come from payroll taxes (social security) which hits lower income people much harder since it's a flat tax on the first $90K or so.



Obviously, the right wants to use this to show that government is taking too much from all taxpayers, but the reality is nearly the opposite: the burden is increasing on middle and lower class individuals while the wealthy and corporations pay little or less and less.

This is you:



This is the richest:



What's wrong with that picture? Which group is having trouble getting health insurance, sending their kids to good K-12, and paying for their kids to go to college?

[Yupster]

1. Just a note

your two bottom charts are comparing apples and oranges as one is measured in dollars and the other in percentages. If they were both graphed in dollars or in percentages, I believe you'd see a very different picture.

[yurbud]

2. different but trend would be the same unless you are trying to say

that because the rich pay more in actual dollars and percentage of income that they should be left alone, despite the downward trend.

In fairness, Heritage had charts showing burden on rich going up from 1983 onward.

I've made some of these myself before from the source documents.

[Yupster]

3. No the trend wouldn't be the same as those two

If the two last charts were both measured in dollars of taxes paid, the middle class chart would show much more taxes being paid, and the rich chart would show an even steeper increase in dollars of taxes paid.

It would look like the rich are being totally hosed since their incomes have gone up so much faster than others. As the incomes have sky-rocketed, so have the taxes paid in dollars anyway.

That chart would make the exact opposite point that your charts are trying to make by measuring them on different scales, one by percentages, one by dollars.

I'm not trying to make any point other than your last two charts are not valid at best and misleading at worst.

[yurbud]

5. good point. I'll get the original data and make an apples to apples

comparison.

In terms of change in taxes RATES, the long range trend has been downward for the top, particularly when you factor in Social Security which is a flat regressive tax:

[DLnyc]

4. Gee, I always thought that those who are doing extemely well should be

happy to contribute generously to the system. I once new someone who was very wealthy (probably worth at least 60 million) who said that he would rather have the tax burden be on the wealthy since that left him doing still very well and the alternative risked a revolution where he could lose everything.

It is insane that the burden of supporting government should fall so heavily on the poor and working and middle class. First of all, it's hard to get much money from people who are barely making ends meet. And second, those for whom the current social structure is not working very well should not be expected to contribute heavily to its maintenance. (And those for whom it is working extremely well should be required to, and should be happy to, contribute a lot more.)

I don't understand how the Democrats got themselves into the position of defending high taxes on those with low incomes. Their message should be very clear: "Tax the rich and the large corporations, give the little guy a break."

Also, your point that social security tax is anti-progressive is very good. I think in NY the total tax rate (income, soc sec, medicare, state local) varies from about 28% for minimum wage earners to about 33% for low 6 figures. Don't have data on this, just experience. That is not very progressive. In fact, if you add in the effect of sales taxes, which impact the poor much more than the rich, it's probably anti-progressive.

[yurbud]

6. the very rich are forgetting the risk of revolution

there is an economic comfort zone where most people won't rebel even if they are in a fundamentally unjust system, or are being somewhat screwed.

The rich seem to have forgetten this and are trying to see how fast they can push people to storm the gates of the country club.

[DLnyc]

7. Yes, but I don't think it is all of the rich, just the greediest and

dumbest among them. Personally, if I were lucky enough to have plenty of money, the next most important thing to me would be to live in a calm and relatively equitable society. Actually, I would rather live modestly in a calm and relatively equitable society than be very rich and locked inside a fortress surrounded by misery and hatred! But that's just me, I guess.

[yurbud]

8. I'm surprised no Dem has taken the gamble of divide and conquer

on the rich and corporate America.

The fact is, most of both are being screwed by just a couple of the rest: health insurance companies and big oil. You could easily make the case to most businesses that it is in their best interest to neuter those two--or at least take one nut from each.

[DLnyc]

9. Good point.

And well put, "one nut from each".

I think Clinton tried to do this, to some extent. The problem, as I see it, is that he spent so much effort kissing up to 'moderate' rich and businesses, that he was afraid to take meaningful steps to limit the power and perks of all of them. He never repealed, as far as I know, Reagan's huge tax cuts for the extremely wealthy and he seemed to give in to the greediest of the health care industry with the HMO thing, for two examples. In the end, maybe he was too intimidated by the extreme right (who are basically, I think, inspired funded and managed by the greediest of the elite) to make any real change in the power structure.