Whos really paying their fair share?
It gets pretty irritating to listen to Democrats refer to Bush’s "tax cuts for the rich" and have no one call them on it.
All this politics of envy stuff doesn’t set well with me especially since I know, like most everything that comes out of Democrat’s mouths, it’s a lie.
So, what would you consider a fair share?
How much would someone have to pay in to the government before you considered it enough?
Or, too much?
Everyone talks about sticking it to the rich and tax cuts for middle income Americans.
Who are middle income Americans?
At what income level does one truly qualify to be considered middle income?
The IRS has released its Statistics of Income for tax year 2006 and there are no real big surprises, however, there are some interesting developments.
Washington is setting up "the rich" for a big tax hike next year so they can pay "their fair share."
But a review of the IRS’s data leaves one to ask just how can the rich pay any more than they already do?
The data show that the 2003 Bush tax cuts caused what may be the biggest increase in tax payments by the rich in American history.
Of course, 2006 was a year where the economy remained healthy and was growing.
That caused individual income tax collections along with overall average tax rates to increase.
What the statistics show is both the income share earned by the top one percent of tax returns and the tax share they paid have once again reached all time highs – the highest level in 40 years.
In 2006, the top one percent of tax returns paid 39.9 percent of all federal individual income taxes and earned 22.1 percent of adjusted gross income.
Both numbers are significantly higher than 2004 when the top one percent earned 19 percent of adjusted gross income and paid 36.9 percent of federal individual income taxes.
Those in the top 10 percent of income, those who earned more than $108,904, paid 71 percent of federal individual income taxes while earning only 47 percent of adjusted gross income.
This begs the question: Aren’t these people really paying more than their fair share?
Especially considering those 43 million tax returns filed by people with positive adjusted gross incomes (AGIs) who used exemptions, deductions, and tax credits to completely wipe out their federal income tax liability.
They got back every dollar they’d had withheld from their pay during 2005, but also got more back from the IRS as a result of refundable tax credits like the Earned Income Tax Credit.
Barack Obama says he’s going to cut taxes for those at the bottom, but that’s also going to be tough to do because Americans with an income below the median paid a record low 2.9 percent of all income taxes on 12 percent of adjusted gross income, while the top 50 percent paid 97.1 percent of the tax burden.
I guess he thinks half of the taxpayers should pay all the taxes to support the other half.
But, we’re told, the rich paid more taxes because they made a larger share of the money.
That’s true, but in reality they paid a share of taxes almost double their share of income while the bottom 50 percent paid on a ratio of only one fourth.
In other words, the tax code is already steeply progressive.
Evidence shows from income mobility that a very large percentage of those in the top one percent are "new rich," not inheritors of fortunes.
There appears to be a large turnover in the ranks of the highest income earners, so much so that people who were at the top in the 1980s and 90s experienced the largest declines in earnings of any group.
Another truly amazing thing the numbers showed was the huge increase in the number of Americans who reported AGI of more than $1 million.
From 2003 to 2006 the number nearly doubled from 181,000 to 354,000 in just three years after Bush’s tax cuts.
This is exactly what was predicted by supply-siders who considered the lower tax rates on capital gains, dividends and income.
The economy would grow faster and investors would declare more capital gains, companies would pay out more dividends and the rich would invest in fewer tax shelters. Amazing how that works.
So, a hint to Senator Obama: If you really want to soak the rich keep the tax rates low.
These numbers released by the IRS provide powerful validation of that fact.
No president has ever gotten more money for the government from the rich that George W. Bush did with his 2003 tax cuts.