Selma,
The WSJ article was the original article that both E.J. Dionne in the
Washington Post and Paul Krugman in the NYTimes was reacting to. That
was why I posted the original article so we could all make our own
judgments. What do you think of it as well as the quality of their
replies?
REH
----- Original Message -----
From: "Selma Singer" <[EMAIL PROTECTED]>
To: "Ray Evans Harrell" <[EMAIL PROTECTED]>; "futurework"
<[EMAIL PROTECTED]>
Sent: Friday, December 06, 2002 9:02 AM
Subject: Re: Luckie Duckie Article
> Paul Krugman wrote the original "Lucky Ducky" editorial which showed a
very
> different picture.
>
> I don't think Krugman is biased; I think the Wall Street Journal is
> protecting its own. Krugman is certainly in the same class but ...
>
> Selma
>
>
>
> ----- Original Message -----
> From: "Ray Evans Harrell" <[EMAIL PROTECTED]>
> To: "futurework" <[EMAIL PROTECTED]>
> Sent: Friday, December 06, 2002 12:01 AM
> Subject: Luckie Duckie Article
>
>
> >
> >
> > Here is the "Lucky Duckie" Wall Street Journal article. What do you
> > think?
> >
> > REH
> >
> > America divided by Democrats: "The Non-Paying Class"
> > Wall Street Journal ^ | Nov 20, 2002 | Editorial
> >
> >
> > The stars look to be in perfect alignment for tax relief. With a GOP
> > majority in both houses of Congress, the Bush Administration is making
> eager
> > and energetic noises, and the economy is in what Fed Chairman Greenspan
> > calls a soft spot.
> > But as the Republicans construct their tax plan, there is a large and
> > under-appreciated fact they would do well to keep in mind. Over the past
> > decade or so, fewer and fewer Americans have been paying income taxes
and
> > still fewer have been paying a significant percentage of income in
taxes.
> > While we would opt for a perfect world in which everybody paid far less
in
> > taxes, our increasingly two-tiered tax system is undermining the
political
> > consensus for cutting taxes at all.
> > Even the barest of glances at tax data reveal a system that is steeply
> > progressive. Tax revenue has been increasingly squeezed out of top
> earners.
> > According to the most recent data, from 1999, the richest -- with income
> > above half a million dollars -- constituted 0.5% of taxpayers but
> accounted
> > for 28% of total tax revenue. Simply put, a tiny group of people
(553,380)
> > were responsible for more than one-quarter of the income tax take of
$877
> > billion.
> > Well, maybe you're saying -- so what? They can afford it. Then take a
look
> > at those who aren't Richie Rich. The most recent data from the IRS, in
> 2000,
> > show that the top 5% coughed up more than half of total tax revenue.
> > Specifically, we are talking about folks with adjusted gross incomes of
> > $128,336 and higher being responsible for 56% of the tax take. Eyebrows
> > raised? There's more. The top 50% of taxpayers accounted for almost all
> > income tax revenue -- 96% of the total take.
> > These numbers are more arresting when compared with the situation 14
years
> > earlier. In 1986, the top 1% paid 26% of revenue, the top 5% was
> responsible
> > for 42% and the top half contributed 93%. And what about the bottom half
> of
> > taxpayers? They accounted for 7% of the total in 1986 but only 4% in
2000.
> > This skewed reality is the result of a growing number of absolutely
legal
> > escape hatches. Consider what happens to those in the lowest bracket.
Say
> a
> > person earns $12,000. After subtracting the personal exemption, the
> standard
> > deduction and assuming no tax credits, then applying the 10% rate of the
> > lowest bracket, the person ends up paying a little less than 4% of
income
> in
> > taxes. It ain't peanuts, but not enough to get his or her blood boiling
> with
> > tax rage.
> > Of course, lower-income workers are on the hook for the payroll tax --
but
> a
> > sizable group slip free from even that net tax liability via the
> refundable
> > earned income tax credit. ("Refundable" means that even if your net
income
> > tax liability is zero, the government still writes you a check.)
> > These numbers represent only people who have a positive adjusted gross
> > income. In 1999, there were 127 million tax filers, 94.5 million of whom
> > showed an income tax liability. That is, 26% had no liability at all.
The
> > actual number of people filing without paying comes to 16 million (after
> > subtracting those getting earned income tax credits and thus,
presumably,
> > still somewhat sensitive to tax rates). So almost 13% of all workers
have
> no
> > tax liability and so are indifferent to income tax rates. And that
doesn't
> > include another 16.5 million who have some income but don't file at all.
> > Who are these lucky duckies? They are the beneficiaries of tax policies
> that
> > have expanded the personal exemption and standard deduction and targeted
> > certain voter groups by introducing a welter of tax credits for things
> like
> > child care and education. When these escape hatches are figured against
> > income, the result is either a zero liability or a liability that
> represents
> > a tiny percentage of income. The 1986 tax reform, for example, with its
> > giant increase in the personal exemption and standard deduction, took
six
> to
> > seven million people off the tax rolls.
> > This complicated system of progressivity and targeted rewards is
creating
> a
> > nation of two different tax-paying classes: those who pay a lot and
those
> > who pay very little. And as fewer and fewer people are responsible for
> > paying more and more of all taxes, the constituency for tax cutting,
much
> > less for tax reform, is eroding. Workers who pay little or no taxes can
> > hardly be expected to care about tax relief for everybody else. They are
> > also that much more detached from recognizing the costs of government.
> > All of which suggests that the last thing the White House should do now
is
> > come up with more exemptions, deductions and credits that will shrink
the
> > tax-paying population even further.
> >
>
