What they think is that taxes on the rich (and even on themselves) have gone up and up since the 1970's (but they haven't) and the people on welfare/not working has just gone off the charts and there is some sort of wealth and income redistribution network of Black Shirts who beat rich people for their hard earned money that they all worked so hard for and hand it over to people who watch Jerry Springer all day and feed their kids Flamin' Hot Cheetos they bought with their food stamps. Some more informed people will blame it on child tax credits and even mortgage deductions and just say that a family with a house and kids who earn $50,000 per year should still pay federal income taxes but most will blame it on the scenario I described above and scream about how unfair the system was to the "job creators(wink, wink)"and those with personal responsibility(to not be born poor and black). Yes, you have to love the irony of the "pull yourself up from your bootstrap" Republicans crying about how something isn't fair...But that is beside the point. They also complain that it isn't fair that 1% of the population pays 39% of all taxes and that over 40% of the population has little to NO tax liability(though they apparently think it's completely fair for corporations to not pay taxes).
Well, here is the reality of all that: Yes, someone making $50,000 per year with a kid and mortgage gets a tax write off on both the kids and the mortgage. But what they don't tell you is that a billionaire with a Summer home, Ski Chalet and year round home gets 3 mortgage deductions...Up to $1 million per home. And a couple earning up to $110,000 per year still gets a child tax credit as well. But with the mortgage deductions, the higher your tax bracket, the more of a credit you get and of course you get a bigger deduction in taxes on your $1 million dollar home, than a guy does on his $200,000 home...The the richer you are and the more homes you have, the more you benefit from this tax credit. But that isn't really why fewer numbers of people are paying a higher percentage of our taxes. That was just to show you that rich people get some of the same deductions as everyone else, it's just that they make so much more, that more of their income is taxable...And I don't know about you but I think that would be a good problem to have. I would gladly keep 85% of $4 million dollars per year (cause the rich really only pay an effective tax rate between 10.5-16%) than 100% of $50,000. So anyway, this is one of the reasons the tax liability for many people have decreased...These tax credits and write offs...But the rich get them too so fair is fair...And the richer you are and more houses you have the more you benefit from these credits and then these properties can generate even more income for you making you that much richer....And what happens when you make more money? You pay more in taxes. Duh!
And that's my next point. One of the main reason the richest 1% of this country has been paying a larger share of the tax bill is just that, they are making more income! The amount of people paying or not paying taxes is completely irrelevant. When they say over 40% of the people pay no taxes that sounds staggering but wouldn't it be more staggering if I said 99% of the population paid only 1% of all taxes and the richest 1% paid 99% of all taxes!! That sounds like a socialist utopia right?? Well, actually, it would be a capitalist utopia because what that would tell me is that 1% of the population earned 99% of all income...And you thought it wasn't fair when they had to pay 99% all those taxes!!! You can't get water from a stone! 80% of American families own less than $250,000 of wealth, the bottom 20% have nearly 0 wealth. However, the top 10% receive 48.5 % of all reported income ('05) and own 71 % of all wealth.
Well that is what is happening in our country. Beginning in the late 70s and early 80s era of Reaganomic union busting, the income for the wealthiest American's in the country started to increase dramatically...The income for the middle class stayed relatively stagnant even though they got more educated, became more productive and worked longer hours and went further in debt...To rich bankers. So again, do you want to talk about fair?? But that is why the rich continue to pay a larger percentage of taxes; because they pay themselves more and the rest of us less.
Here are the numbers to support the fact that the reason the rich are picking up a larger share of the taxes paid simply because they are paying themselves so much more and poor people whose jobs got outsourced by the rich guy, so he could get richer, are no longer earning enough to owe income taxes.
In the 1970s, the average CEO made 30 times what an hourly worker made. Today, a CEO makes 300 times what an hourly worker makes.
From 1960 to 1969 the bottom 90% of income earners saw 65% of all wage increases while the top 10% got 12% of the income increases but from 2002-2007 the bottom 90% got 12% of the increase in income while the top 10% got 65% of those increases.
In the 1950's, 35% of the American labor force belonged to a union, it is now at 11% and 6.9% in the private sector.
4.2 million fewer taxpayers reported wages in 2009 than in 2007; the jobs just aren't there anymore and the ones that are, are at retail stores selling the products made in China the employee used to make himself and thus this job pays far less and typically comes with fewer benefits.
In 1977 the income share of the top 1% was at about 10% of all wage earners, today it's 24%, back to where it was just before the stock market crash of 1929 and the Great Depression.
In 1965, manufacturing accounted for 53% of the economy, by 1988 it only accounted for 39%, and in 2004, it accounted for just 9%.
A study by the universities of Cornell and Massachusetts-Amherst found that India alone may be responsible for up to 700,000 outsourced jobs from America as of 2005
Between 1979 and 1999(at the beginning of the outsourcing trend) the Bureau of Labor Statistics found that 31 percent of workers displaced by trade, mostly in the manufacturing industries, were not fully re-employed. Only 36 percent of workers soon found jobs that matched or increased their wages
In 2004, average employee compensation in the U.S. fell for the first time in 14 years
Where as the average salary in manufacturing was $51,000, the average wage in the service industry(medical, hospitality, construction) is now $29,000
Forrester Research conducted a study that found 12,000 to 15,000 service jobs are outsourced from the US per month.
From 1983-1998 the change in net worth for the bottom 40% was -76% but the change for the top 1% was +42% and those numbers are probably far more drastic today.
In the same time period, the change in income from the bottom 20% was -5% while the top 5% saw a 64% increase
Nearly 80% of all economic gains made in the past thirty years have gone to the richest 1%
The capital gains taxes now are 1/3 of what they were under Reagan and the top income tax rate is 50% lower than what it was in 1970. So the tax rate on the rich has certainly not increased.
What this data shows is:
A. The rich are paying themselves more and paying their employees less and therefore the taxable income base has shifted towards the ones making the most money.
B. The rich are exporting once well paying jobs and the savings is going into their pockets and not necessarily being passed on to the consumer (are your Levi jeans and tennis shoes any cheaper now than when they were made in the US?)
C. The tax rates on the rich have not gone up and the American worker didn't just decide to not work and stay at home and watch The View, they simply have no job to go to.
The bottom line is that the number of people paying or not paying taxes is completely irrelevant. If the rich want to pay a smaller percentage of America's tax liability, they need can merely stop earning so much income that was once paid to their employees who used to be part of the tax base but since they now no longer can afford to live off their incomes,or their jobs outsourced all together, they have thus been removed from the tax base.
Or you could use the restaurant analogy: Three guys go to a restaurant, one got valet parking, orders a surf and turf, a $100 bottle of wine a desert and brandy...The other two took the bus, ordered a burrito and PBR, the check comes, it's $200....How should this check be split?
The people complaining about such a small percentage of people picking up 40% of the tax burden would tell you that it isn't fair that a guy who only only represented 1/3 of the group should have to pay for 75% of the meal....A Democrat would tell you the guy who got the most should have to pay the most and a Republican would say that everyone should pay 1/3 of the bill.
It's pretty simple when you think about it.
So the next time some Koch sucker or Teabagger tells you the tax code "isn't fair", give him a good cock punching and tell him that it's only because the incomes in this country aren't "fair".
