As to "Tax cuts for the Rich", what source are you using for you're info? I've never seen any statistics that back up your position. When upper class tax rates are cut from admittedly high of 70-80% rates prior to Reagan to 39%, then down to 33%, how can they not have received the the most? Check the facts. Just from George W's cuts, the top 1% received 30% of the benefit. Income percentile 80-99% received 45% of the benefit. The bottom 80% got the remaining 25%. And in each percentile, the benefit as a percentage is progressive, as each percentile step up the ladder is reached.
Originally Posted by Nightman
I'm not the one who needs to "check the facts."
In a nutshell, here's the gist of the issue:
As was widely reported, the CBO did a piece of analysis a year or two ago which concluded that extending the Bush-era tax cuts
only for those not in the top two brackets (the proposal at the time) would "cost" about $3 trillion in revenue over the coming decade, while extending ALL the tax cuts would cost about $3.7 trillion. Obviously, that means that a little less than 20% of the "cost" of the tax cuts would be attributable to those earning more than approximately $250K annually. (Roughly speaking, that means the top 2% of the distribution, and the top two tax brackets.) Therefore, it's clear that the
bulk of the tax cuts, as I mentioned in my previous post, went to the non-affluent. (Contrary to popular opinion, that was also the case with the 1980s tax cuts.) Also remember that the top 1% of income earners pull down about 19% of all taxable income, according to the latest estimates. So you can see the obvious "proportionality." (Put another way, the progressivity of the tax code was not reduced.)
Note additionally that the CBO finding resulted from
static analysis, which does not take into account the fact that many taxpayers in the highest bracket can reduce their tax burden in a variety of ways if the statutory rate rises. Thus, raising tax rates on the top one percent will probably not raise as much revenue as its supporters claim.
Many people believe that since top-bracket rates dropped precipitously from the 70% pre-1981 statutory rate, the wealthy got a "huge tax cut." But that reflexive assumption is completely wrong. The 70% rate was completely phony, since virtually no wealthy person paid an effective tax rate more than a fairly small fraction of that. That's because it was very easy to wipe out most of your tax liability with things like accelerated depreciation on highly leveraged investments. Here's one little fact of which a lot of people are completely unaware: Even after the sharp drop in the top-bracket income tax rate that was part of the bipartisan 1986 tax reform plan, a lot of wealthy Reagan and Republican Party donors were rather unhappy. The reason is that almost all of the juiciest loopholes were knocked out in return for lowering the rate, and many
very affluent taxpayers saw their tax bills actually
increase.
You may believe that tax rates on the affluent should be higher than they currently are. Fine. Polls show that a lot of people agree with you. But you should note that tax cuts for the wealthy over the last few decades account for only a very tiny portion of accumulated deficits. (The main problem, of course, is ballooning levels of
spending.)
The fiscal mismanagement under George W., who inherited a budget surplus, and bequeathed a huge defecit, can't be argued.
Originally Posted by Nightman
I don't think anyone here has spent so much as a keystroke to argue otherwise.
The Bush era was a big-spending, big government disaster. Under GWB's watch, U.S. government spending increased by about 60% in nominal dollars, and that was before taking a huge jump in FY2009, following the financial crisis. There's no excuse for that. It was a
Republican congress that jettisoned PAYGO rules in 2002 so that we could have tax cuts and spending increases simultaneously. Partisans on both sides of the aisle need to recognize that fiscal recklessness has been a truly bipartisan adventure. Both of our dysfunctional parties have become "free lunch" parties; they've just done so in different ways.
There have been what amount to continuing referenda on entitlements and social programs for several decades. Nothing ever gets cut; everything just gets ratified and expanded. We're going to eventually have to tell America's middle class that they're going to have to taste the joy of paying for all this.
But it's so much more fun for politicians to do the metaphorical equivalent of telling kids they can have all the free ice cream they want, and that the fat kid down the street will eat their broccoli for them!