Discussing the lame duck Congress’s tax rate debate, Washington Post columnist E. J. Dionne complains,
Rather than allow the debate to focus on an old tax measure from the beginning of the decade, Obama and the Democrats should have sought early on to replace the Bush tax cut. Their proposal could have shifted the tax burden away from middle-income taxpayers toward the wealthy…
It would be trivial to write off as dishonest Dionne’s implication that current tax rates unfairly “burden… middle-income taxpayers”. Something else is at play here.
Please examine the table below, pulled from the National Taxpayers Union website, and then continue with the discussion after the table.
Let’s accept that the top 5% of earners are well off. Except with huge broods of young’uns, an annual income of at least $159,619 is enough to put families soundly into at least the upper middle class. In other words, the middle-class is somewhere in the bottom 95% of taxpayers.
With this recognition, it’s a matter of looking at the number in the right-hand column of the “Top 5%” row and seeing that well-off taxpayers paid nearly 59% of federal income taxes in 2008–the latest year for which complete data has been tallied.
Mr. Dionne is way off base. The bottom 95% of earners, which includes the middle class, pays only 41% of all federal income taxes. What’s more, the entire bottom half of earners pays a piddling 2.7% of income taxes.
Here’s another way to look at this. The top 1% of earners pays 704 times as much (per person) in income taxes as the bottom 50% of earners. When we take into account the fact that most of that bottom 50% actually pay no income taxes, the multiplier becomes infinite. From other data, we know that the top 1% of earners shoulder virtually all of the tax burden for the bottom 43% or so.
But “progressives” like Dionne apparently have the ability to conceive ratios higher than infinite.
Boudreaux adds helpful perspective.
In 2008, for the typical household in the top one-percent of income-earning households in America, the percent of its adjusted gross income that it paid in federal income taxes was 23.27. Middle-income households paid less. For households whose earnings put them in the top 50 percent, but below the top 25 percent, of income earners, the percent of their adjusted gross income paid in income taxes was, on average, 6.75. For households in the bottom 50 percent of income-earners, the percent of their adjusted gross income paid in income taxes was, on average, 2.59.
Seems as if the shift in tax burden that Dionne desires has already occurred.
The tax burden has always been increasingly borne by the wealthy, not, as Dionne falsely implies, by the middle class.
So what can we learn from Dionne’s display? Is the man ignorant? Does he simply lie? Or is there some other cause for his false contention?
While dishonesty may play a part in the claims and pontifications of Dionnesque progressives, I believe that the main cause lies in reality-hating ideology. Dionne exhibits textbook, self-imposed, progressive blindness. There has never, not once, been an objective, trustworthy study painting anything other than the picture presented above as to how Americans are taxed across the income spectrum. The wealthy always have, still do today, and always will proportionately bear more tax burden than any other segment of taxpayers. But progressives always want more “fairness.”
Dionne and other progressives parade about with arrogant blindness, presenting themselves as sages soaring high above common rubes. The sages just know that their worldview beats something as mundane as “reality,” for reality allows itself to be described by mere “facts” and “numbers.” Horrible reality refuses to succumb to pretty theory.
Knowledge is power. Keeping people indoctrinated against truth, against knowledge, brings the indoctrinators power. Progressives have gradually seized more and more power over the last century. Help with that seizure has come from an ideologically complicit media that has faithfully controlled the flow of knowledge.
Dionne and his progressive cohorts fear unadulterated truth. To the world’s Dionnes, truth must never become pervasive.
What would happen if American earners at all income levels acquired a deep understanding of two fundamental truths?
- Letting earners earn all that they wish to earn and allowing them to keep most of the earnings cause the biggest earners to pay ever greater proportions of taxes.
- A genuinely free system maximizes everybody’s wealth.
What would happen if all Americans became viscerally aware of the big progressive lie? Where would Democrats be?