* Maxprop wrote, On 5/3/2007 11:45 PM:
"Jeff" wrote in message

The professor leaves out a few details worth keeping in mind: The poorest
40% is not just lazy people looking for a free beer.

He never implied they were.

No, but many people look at it that way.


It includes retired people, kids and college students, people with
disabilities, and a large part of the armed forces. And while they pay a
smaller portion of their income then most, they do pay some, and they also
have to pay the same sales tax on many consumer items.

The demographics of the different levels are irrelevant.

To some, perhaps. But anytime you suggest that one "level" pay less,
you're implying that other levels pay more. Its worth remembering
that many people are in lower levels because because it benefit
society as a whole. For instance, it really isn't fair to claim that
the military should be paying more in taxes, or students, or the
elderly, but that is exactly the implication when Rush goes on about
how the poorest 40% don't pay any taxes.


And at the other end of the scale, most of the people above the 40th
percentile pay roughly the same part of their income. With the tax cuts,
the super-wealthy actually pay a smaller percentage of their income than
the upper middle class.

If tax cuts for the highest income group include closing the loopholes, I'm
all for them. The top marginal tax rate used to be somewhere around 75%
(Eisenhour era), but the loopholes were like Swiss cheese. The wealthiest
paid 75% of not much, if they had good accountants. Today the top marginal
rate is around 40%, but the average taxpayer in that group pays far more
than he did during the 75% days. Sort of shoots the idea of tax cuts
resulting in less revenue from the top income group.

Nope. You wrong about this - the wealthy today are paying less, as a
percentage of their income. Of course, there are (and were) many who
avoided paying, and the super wealthy reap many benefits that are not
considered income, but the wealthy have always paid. And you're
trying to cast this as "revenue from the group" which is not
particularly relevant.

I don't have any good data about the super-wealthy, but according to a
recent Boston Globe editorial, in 1960 the folks in the 95-99th
percentile were paying 24% of their income in total taxes, but the top
1% paid a lot more.

By 1979, the top level was down to down to 32%, and the system was
moderately "progressive." The wealthy paid less in '89, then more in
'99, then after the Jobs and Growth Tax Relief Reconciliation Act of
2003, the total tax rate was regressive - the tax goes down for the
super wealthy, such that they are paying less than the "upper middle
class."

Here's the table from an IRS study, which applies the 2003 law to the
1999 taxes to estimate the affect.
http://www.irs.gov/pub/irs-soi/03strudl.pdf
Its very clear what happened, the rate for the middle class was given
a modest tax cut, while the super wealthy were given an immense cut

Figure F-Average Tax Rates (Including Social Security Taxes)
by Percentile Classes, 1979-2001
Year Tot 0.1% 0.1-1% 1-5% 5-10% 10-20% 20-40% 40-60% 60-80% Low 20%
1979 20.71 31.92 29.50 24.14 22.59 21.63 19.89 17.35 12.65 8.72
1989 22.24 23.33 24.22 24.84 25.09 23.90 22.37 19.29 13.93 11.47
1999 23.59 27.51 26.70 25.97 26.18 24.96 23.22 19.70 11.83 7.29
1999 JGTRRA 21.90 22.57 23.34 25.76 25.48 23.81 21.58 18.25 10.94 6.97


And of course this only includes federal tax; the state tax system is
often very regressive. In FL, for instance, the wealthiest by 2.7% of
their income in state taxes, while the poorest 20% pays over 14%. Even in
states like MA that try to be non-regressive, the super-wealthy get a
significant break.

The result of this is that pretty much across the board, almost everyone
pays about the same tax, as a percentage of their income. It comes out to
about 30%, but for the super-wealthy, its closer to 26%.

We all pay about 50% or more of our annual income in taxes, which include
sales taxes, fuel taxes, hotel taxes, state, local, and federal taxes, and
so on, ad nauseum.


That's alway been the "common wisdom" but is it really true? The
local taxes for the various states, and the national average can be
found at
http://www.itepnet.org/wp2000/text.pdf
This includes Sales, Income, Excise, Business, Property, etc.
The National Average for the poorest is 11.4%, and it slides down to
5.2 for the top 1%. Adding together the two data sets, we get 28.5%
for the top 1%, 30.3% for the 60-80% middle class, 27.15% for the
40-60% working class. And even the 20-40% working poor are paying 22%.

(Of course, there are other taxes that don't show up as "personal"
taxes, so if you work this as total revenue from all sources as a
percentage of total income, you might get close to your 50%.)

If you believe that everyone should be paying about the same
percentage of their income in taxes, the system look rather flat.
However, the top 1% is definitely getting a break, while the middle
class is paying more than their share.