--- In FairfieldLife@yahoogroups.com, bob_brigante <no_re...@...> wrote: > > > "As you can see, when you add up all federal taxes and compare it to > where the money is, our system is only barely progressive at all. The > bottom quintile doesn't do too badly, though they're probably paying a > little more than they should, but CEOs and bankers are paying only > slightly more than teachers and engineers. And if you add in state and > local taxes, > <http://www.prospect.org/csnc/blogs/ezraklein_archive?month=04&year=2009\ \ > &base_name=why_do_state_and_local_taxes_h> even this small amount of > progressivity goes away. You can come at this from a lot of different > angles, but you always end up with the same answer: taken as a whole, > our tax system is close to flat. Does this seem fair to you? It > shouldn't. > > full article: > http://www.motherjones.com/kevin-drum/2009/04/my-tax-day-post > <http://www.motherjones.com/kevin-drum/2009/04/my-tax-day-post> > <http://www.motherjones.com/blog> > How to Think About Taxes By Kevin Drum > <http://www.motherjones.com/authors/kevin-drum> | Wed April 15, 2009 > 12:52 AM PST > <http://www.motherjones.com/kevin-drum/2009/04/my-tax-day-post> > Photo from flickr user RogueSun Media > <http://www.flickr.com/photos/shuttercat7/2415721110/> . > > Here's my contribution to today's tax day festivities: an effort to get > you to think about federal taxes a little bit differently than usual. > Normally, when we talk about taxes, we end up talking about percentages > of people: the top 1% pay a certain amount, the bottom third pay a > different amount, etc. But this is the wrong way to look at things. > What we ought to be looking at is percentages of income. > > Have your eyes glazed over yet? Just wait! It's going to get worse. > But first a caveat: the numbers that follow aren't exact. I don't think > they're way off the mark, but they're the result of some rough > interpolation from several different data sources. Anyone with access > to more detailed data is welcome to correct this, but in the meantime it > should be close enough to give you an idea of how to look at this stuff. > > So: percentages of income. What I mean by this is that you'd expect a > group of people with, say, one-fifth of the nation's total income to pay > one-fifth of total federal taxes. (Note: one-fifth = 20%, or one > quintile in tax-speak.) It doesn't really matter if that group has > one-fifth of the people or not, just that it has one-fifth of the money. > Like this: > > [http://www.motherjones.com/files/images/Blog_Federal_Taxes_1.gif] > > But hold on. That's a flat tax, and I want to appeal to your native > sense of fairness here. Even most conservatives agree that taxation > ought to be at least mildly progressive, so let's make this mildly > progressive. First, let's say that the middle quintile, almost by > definition, ought to pay 20% of total taxes. Like so: > > [http://www.motherjones.com/files/images/Blog_Federal_Taxes_2.gif] > > The next quintile up ought to pay a higher share, and the quintile above > that even more. The slope of the increase doesn't need to look like a > hockey stick, but it should trend clearly upward. Let's say it should > be 8% more for each quintile: > > [http://www.motherjones.com/files/images/Blog_Federal_Taxes_3.gif] > > Likewise, the quintile below the middle ought to pay a lower share, and > the poorest quintile ought to pay even less. Something like this: > > [http://www.motherjones.com/files/images/Blog_Federal_Taxes_4.gif] > > Question: does this seem roughly fair to you? If you're a die-hard > flat-taxer, it won't, but for most people, even conservatives, it ought > to seem reasonable. It's progressive, but the slope is moderate and > consistent. So now let's take a look at the income cutoffs that produce > our five quintiles. Here they are: > > [http://www.motherjones.com/files/images/Blog_Federal_Taxes_5.gif] > > Most people are surprised at how high the income cutoffs are. But > that's how it works out. If you add up the incomes of every single > household that makes less than $50,000 all 50 million of them > they earn only a fifth of the total income. If you add up the > tiny number of people who make more than $300,000, they also earn a > fifth of total income. So now, instead of looking at our theoretical > progressive system, let's see the actual numbers. Here they are: >
> [http://www.motherjones.com/files/images/Blog_Federal_Taxes_6_0.gif] > > As you can see, when you add up all federal taxes and compare it to > where the money is, our system is only barely progressive at all. The > bottom quintile doesn't do too badly, though they're probably paying a > little more than they should, but CEOs and bankers are paying only > slightly more than teachers and engineers. And if you add in state and > local taxes, > <http://www.prospect.org/csnc/blogs/ezraklein_archive?month=04&year=2009\ \ > &base_name=why_do_state_and_local_taxes_h> even this small amount of > progressivity goes away. You can come at this from a lot of different > angles, but you always end up with the same answer: taken as a whole, > our tax system is close to flat. Does this seem fair to you? It > shouldn't. > > NOTE: As I said above, these numbers are rough interpolations from > several sources. The high-end income data is from Piketty and Saez, > here. <http://elsa.berkeley.edu/~saez/TabFig2005prel.xls> The middle > income aggregates and cutoffs are from Census figures, here > <http://www.census.gov/hhes/www/income/histinc/h02ar.html> and here. > <http://www.census.gov/hhes/www/income/histinc/h01AR.html> Tax shares > are from the CBO, here. > <http://www.cbo.gov/ftpdocs/100xx/doc10068/effective_tax_rates_2006.pdf> > > > > > > [http://imagec14.247realmedia.com/RealMedia/ads/Creatives/default/empty.\ \ > gif/0] > <http://oascentral.motherjones.com/RealMedia/ads/click_lx.ads/motherjone\ \ > s.com/kevin-drum/page.html/531092708/Position2/default/empty.gif/544b376\ \ > e6830692f4247414142696769?x> >
