The rich are using the government to steal your money.

[BlueEyedSon]

So where is all the money flowing out to? War for corporate interests (oil), no bid contracts (HAL, KBR), stock market manipulation (Fed?), pork projects (bridges to nowhere).

And who will be left holding the bag on that debt? The TAXPAYERS. With each passing year, fewer and fewer rich folks (and large, PROFITABLE, corporations) actually pay any taxes. That leaves you & me and our kids.

This is the reality of the USA in 2005.

[texpatriot2004]

1. You are right, they are and thanks for the graph. n/t

[SpiralHawk]

2. k & r

Every Republican on the planet should contemplate the reality of the CBO graph.

[BlueEyedSon]

3. kicked with update

[whistle]

4. Hasn't this been going on for centuries? Is there a way to go back

...to the beginning of the republic and see the patterns. Certainly, if we go back to when the federal income tax was initiated in 1912 this pattern has more or less been consistently exercised where the wealthy corporations reap the benefits of federal spending and the richest in America have avoided paying their fair share of taxes while the lower to upper middle classes have paid through the nose. This has happened whether there have been social welfare programs or not.

Here is one interpretation of the summary of taxation in the U.S. I don't like to use conservative sources, but it does give a nice time-line of events:

<snip>
The Origin of the Income Tax
by Adam Young

"The freedoms won by Americans in 1776 were lost in the revolution of 1913," wrote Frank Chodorov. Indeed, a man's home used to be his castle. The income tax, however, gave the government the keys to every door and the sole right to change the locks.

Today the American people are no longer the master and the government has ceased to be the servant. How could this be? The Revolution fought in the name of the inherent natural rights to life, liberty and the pursuit of happiness promised to enthrone the gains of individualism. Instead, federal taxation bribes the States and individuals to serve the interests of ever-greater submission to the centralized will.

How did tax slavery come to the land of the free?

1812

The first proposal to impose an income tax on America occurred during the War of 1812. After two years of war, the federal government had accumulated a then-staggering $100 million of debt. To fund the war against Britain, the government doubled the rates of its major source of revenue, customs duties on imports, which obstructed trade and ended up yielding less revenue than the previous lower rates. At the height of the war, excise taxes were imposed on goods and commodities, and housing, slaves and land were taxed. After the war ended in 1816, these taxes were repealed and instead a high tariff was passed to retire the accumulated war debt. Thankfully, the notion of an income tax was defeated.

However, the malevolent spirit of the income tax reappeared as a measure to fund the Union armies in the war to prevent the secession of the Confederacy. The war was expensive, costing on average $1,750,000 a day.<1> Struggling to meet this expenditure, the Republican Congress borrowed heavily, doubled tariff rates (the Morrill Tariff initially provoked the Deep South to secede), sold off public lands, imposed a maze of licensing fees, increased old excise tax rates and created new excise taxes. But none of this was enough.

<more>
<link> http://www.mises.org/fullstory.aspx?control=1597

[ebal]

5. Percentages

Businesses never pay taxes. The only source of paying taxes is individuals. Increase taxes on a business, they just increase the cost to the end comsumers.

As far as Federal income tax on individuals:

http://www.irs.ustreas.gov/pub/irs-soi/01in01ts.xls


Data from 2001 breakdowns of all Tax Returns based on Income:

Top 1% 33.89
Top 5% 53.25
Top 10% 64.89
Top 25% 82.90
Top 50% 96.03

So people that are in the lower 50% of income in the country are paying for 3.97% of the Federal tax.

The top 50% of income earners are paying 96.03% of all Federal taxes.

[BlueEyedSon]

6. 2 fallacies in your post.

The breakdown by income is a meaningless statistic without the equivalent chart for percent of gross personal income (including cap gains, etc). For example, if the top 1% are paying 34% of all taxes, but earning 70% of all personal gross income, the system is extremely regressive. (I would argue their "excess profits" are due in large part to government manipulation of the free-market system.)

Second, when companies like Exxon-Mobil net $7 billion in a calendar quarter, there is PLENTY of money for them to pay taxes to the government that lets (helps?) them to be profitable. Perhaps they could lower (or not increase) their (1) dividend, (2) executive compensation or (3) cash to reserves instead of your false choice of (1) not paying tax or (2) passing along the tax burden.

[ebal]

9. fallacies

So you are saying Companies like Exxon-Mobil, when confronted with a tax increase, are going to go ahead and use your options of lowering dividends/executive pay or cash reserves out of the goodness of their heart?

I think the reality is that they are going to pass along the increased tax to consumers.

I'm not sure where you got the data for your Top 1% of earners are earning 70% total of all personal gross income. If you read the Adjusted Gross Income percentages in the same IRS spreadsheet I linked to, it states:

The Top 1% earned 17.5% of all earned income and the next table says, paid 34% of all taxes.

[BlueEyedSon]

14. Exxon can do what they want. Supply/demand/price will work itself out.

Definition: Earned income is payment you receive from your work or job. Salary, wages, self-employment income, alimony, and farming income are examples of earned income. Interest, dividends, social security payments, and pension payments are examples of unearned income.

If you think the investment class (trust fund babies, "rich folk", etc) are "earning" the majority of their total gross income you are mistaken. How much "unearned" income did they each make, on average? Ten times their "earned" income? On hundred times? One thousand? How much assets do they have to draw on if their total income were to fall a bit or get taxed? Would it not be better for the US economy if that money were in circulation rather than sequestered, for example, in offshore accounts or invested in China?

BTW, "fallacy" was probably not the right word, maybe "misconception", "unfounded assumption" or "unsupported conclusion" would have been more accurate.....

[ebal]

17. Income

The IRS table lists the Adjusted Gross Income total. Earned/unearned it's in there.

http://www.cbo.gov/showdoc.cfm?index=3280&sequence=0
"adjusted gross income (AGI): All income subject to taxation under the individual income tax after subtracting "above-the-line" deductions, such as certain contributions for individual retirement accounts and alimony payments. Personal exemptions and the standard or itemized deductions are subtracted from AGI to determine taxable income."


"How much "unearned" income did they each make, on average? Ten times their "earned" income? On hundred times? One thousand?"

I coudln't say what the percentage is, but it doesn't really matter since taxable income is taxable income regardless of source. You seem to indicate that people that have dividends don't pay taxes on that money.

If they are drawing on assets, they would be paying taxes on those as they were liquidated so it doesn't really matter if they have 0 assets or a mountain full. You paid taxes on the money you earned at work to buy a stock, the stock goes up, you sell it and you pay taxes on the increased value.

[BlueEyedSon]

18. You seem to suggest that stock is the only investment vehicle

used buy the rich (it certainly isn't) and that stocks only go up ("If they are drawing on assets, they would be paying taxes on those as they were liquidated").

You also forget the top marginal tax rate was over 90% within the last 50 years and the rich did not disappear, nor did the US crumble.

http://staff.jccc.net/swilson/businessmath/fit.htm

US Budget deficits are bad.... m'kay?

[Toots]

8. Only if they have the consumer over a barrel

A lot of "consumers" will just not buy those products if they get "overpriced" There is a point of diminishing returns which every business person knows well or at least should know if they expect to stay in business.

[Redstone]

37. Those figures are pure bullshit. I suspect you're a Republican, because

this is the kind of misrepresentation that Republicans just LOVE to cite.

I'm too tired to go into the many reasons why this kind of "statistic" is utterly meaningless, but remind me tomorrow and I'll be happy to do so.

Redstone

[BlueEyedSon]

38. Please enlighten me, those numbers are from the us treasury

(My understanding is that we effectively have a flat tax if you look at fed income tax paid on income....)

thx!

[rman]

7. Krugman: more percentages

"What went wrong"
Paul Krugman
2003
rtsp://real.dialnsa.edu/REAL_BEARD/spring2003_events/schwartz.rm (realplayer)

(...)
(Economic) policies are being sold with a sales campaign that bares no resemblance to the actual content of the policies. I believe this is completely new.

Elimination of taxes on dividend income benefits people high up on the income ladder. 40% of wealth is in the hands of 1 percent of the population. The direct benefits of this policy flows to very well-off people.

You couldn't sell this policy on the basis that it is a populous policy .. that it is about cutting taxes for the regular people.

Yet that is exactly how it is being sold.

It is being sold trough... "lies" is not quite the right word, because they are careful to phrase things so that they are literally true, just misleading.
The scams are transparent, they are almost childish, it is hard to believe that anyone would dare to do such a thing.

One of the scams that is used is a variant of the old "When Bill Gates walks into a bar that makes everybody in the bar a billionaire, because once he's in the bar the average income of the people in the bar is a billion dollars".

That is exactly the logic that is used in the speeches, over and over again it says "93 million taxpayers will get an average tax break of 1083 dollars next year". Which is true.
The problem is that the great bulk of that, is huge tax breaks for a few people at the top, and about 250 dollars for the person in the middle.

You have this image of 93 million people getting 1000 dollar checks, which is completely misleading.
They didn't exactly say that because they don't want you to think that, and it is amazing that they can get away with it.

Another argument is that it's "for helping the elderly; most of the benefits of dividend tax exemption will go to older people". Which is true.
That is if you look at multi-millionaires, you find they tend on average to be elderly. If you do the arithmetic, you find that 75% of elderly get zero.
More broadly, for elderly Americans with an income of less then $50.000, a grand total of 4% of this tax break will go to them.

This is amazing, it is so transparent it's ridiculous. It is typical of the way that policies have been sold these last two years. Not just in economics but i'm going to stick to economics.

.. If we are polarized country politically it might well be at least in part is because we are polarized country economically. What has been happening is a extraordinary pulling apart of the income distribution. Traditionally people look at income distribution by "quintiles", by blocks of 20%. But that is not where the action is. It is not in the top 10%, it is not even in the top 5%.

To really see what is going on you need to look at the top 1%, the top 0.1% and the top 0.01%. Then you discover that there has been an explosion of income on the very top of the scale:

top 1%
1970 9%
2000 22%

top 0.1%
1970 2.8%
2000 11%

top 0.01%
1970 1%
2000 5%

We are by these numbers fully back to and by some measures above the level of concentration of income that we had in the 1920's.

[leesa]

10. Yup. They'll squeeze out every last dime.

[Armstead]

11. That's what the Democrats should start stating as clearly

This is the real core issue, Money and Power.

Thye Democrats have stop tip-toeing around that fact, and be the counterbalance to corporate power and the siphoning of money from the botton 3/4 to the upper quarter of the population.

[BlueEyedSon]

15. I'm a Democrat and I just did! nt

[Armstead]

22. I mean the Democratic Establishment

A lot of ndividual Democrats have been saying it for a while, but it seldom gets into campaigns on other "official" communications from party leaders.

[BlueEyedSon]

26. 8^)

[earth mom]

12. KICK!

:kick:

[hootinholler]

13. They're not really stealing our money...

They're stealing our future earnings!

-Hoot

[BlueEyedSon]

16. Ok, I'll go with that. But they did steal last year's money too.

[BlueEyedSon]

19. vanity kick

[BlueEyedSon]

20. kick again

[leftofthedial]

21. yep, they are

It's a class war

and we are getting our asses handed to us

[Pobeka]

23. It's just amazing how the middle/lower class completely ignores this.

and focuses on gays/guns/god. Gays, guns and god are the least of their worries.

Being owned by China is a much bigger and real threat.

Right now China is rapidly building infrastructure, which they largely did not have in the past century.

Once that's in place, China is going to kick our economic butt, figuratively speaking...

On Edit: I bring up China because it is one of the countries that is funding our deficit spending.

[RUMMYisFROSTED]

24. And there has to be a reason why the pillaging has been

kicked into overdrive.

A bad moon is rising, imho.

[BlueEyedSon]

25. Peak oil, economic meltdown, loss of civil order, etc... I suppose

[RUMMYisFROSTED]

29. What's a buck worth in a system based on barter?

"I'll trade you this granite block from this mansion for two eggs."

[Redstone]

27. So what else is new?

Has it ever been different?

Do you have even the slightest reason to think it's ever going to change?

Redstone

[BlueEyedSon]

30. Do you really think it's NOT WORSE now than under Clinton?

[Redstone]

32. Of course it is. But it's still not as bad as it was in the 1880s and

1890s (though I'm sure that bushyboy and them would love to see it go back to the way it was then). These things go in cycles, but it's still only a matter of degree. It may not have been AS bad under Clinton, but it was still bad.

Them as has, gets. Always did, and always will. May as well complain about the weather, for all the good it does.

Redstone

[BlueEyedSon]

33. Whoa! Why bother visiting DU then?

[Redstone]

35. Because there are things that CAN be changed. But the fact

that the rich benefit more from the government (and have an easier life in general) than the poor isn't one of them.

It's been that way with every single form of government (with the possible exception of the Khmers Rouge), for all of identifiable human history.

I don't like that fact a whole lot more than you do. But if the only way to change it is to have Pol Pot running things (he is, after all, the only political leader who ever changed it), well, I suppose I can live with it.

Redstone

[The Magistrate]

28. We Have A Winner, Ladies And Gentlemen!

Mr. Blue Eyed Son takes the prize!

[BlueEyedSon]

31. Too kind, M.

:)

[calimary]

34. It's a GREAT one-liner. Could also be a good bumper sticker!

Like it. Should be said, read, and spread!

[RUMMYisFROSTED]

36. Fun with graphs!

The top 10% owns 90% of the wealth. Buehler?!?

[LSK]

39. the Republican agenda in a nutshell!!!

Great post!