Republicans, the home of many wealthy corporations and individuals, control public perception through the media. They are very good at it – much better than Democrats. Maybe the media is liberal if you listen to them but voters fall in line like zombies to their beckoning call. The Heritage Foundation, a very conservative “think tank” (I prefer to call them a propaganda tank), stated during the 2008 campaign that, “Senator Obama’s new tax rate would give the United States one of the highest tax rates among developed countries.” They went on to state, “The top marginal rate would exceed 60 percent with the inclusion of state and local taxes”. The article would have us believe that the US under President Obama will have the highest taxes in the world.
http://www.heritage.org/Research/Taxes/wm1973.cfm
I have found the Heritage Foundation to be in the big time business of deception and public manipulation (the US Chamber of Congress as well). Both of these groups are private and bought and paid for by wealthy Republicans. So where is the deception in the article cited above?
It is in the small phrase “marginal rate”. The fact is that there is something called “effective tax rate”. Marginal rate does not include pre-tax dollars. Marginal rate is the rate before all the tax loop holes. Tax loop holes are spread more generously with the wealthy (individuals and corporations) and less generously with middle income to low income groups. The effective tax rate is what individuals and corporations pay after their tax loop holes are taken into account. Effective tax rate is the rate after all the tax loop holes – what they really pay. The Congressional Budget Office has generated data on the effective tax rate ever since 1979. Here is the latest one from 2006:
| Distribution of Federal Taxes and Household Income, 2006 | |||||||||
| Low | Middle | High | All | Top 10% | Top 5% | Top 1% | |||
| Average Pre-tax Income | 17,200 | 39,400 | 60,700 | 89,500 | 248,400 | 90,700 | 366,400 | 564,200 | 1,743,700 |
| All Federal Taxes | 4.3 | 10.2 | 14.2 | 17.6 | 25.8 | 20.7 | 27.5 | 29 | 31.2 |
| Individual Income Taxes | -6.6 | -0.8 | 3 | 6 | 14.1 | 9.1 | 16 | 17.5 | 19 |
| Social Insurance Taxes | 8.5 | 9.2 | 9.4 | 9.6 | 5.8 | 7.5 | 4.6 | 3.4 | 1.6 |
| Corporate Income Taxes | 0.5 | 0.6 | 0.8 | 1.2 | 5.4 | 3.4 | 6.6 | 7.9 | 10.4 |
| Excise Taxes | 1.9 | 1.2 | 0.9 | 0.8 | 0.4 | 0.7 | 0.4 | 0.3 | 0.2 |
http://cbo.gov/ftpdocs/100xx/doc10068/effective_tax_rates_2006.pdf
The chart shows by average income level what individuals and corporations are really paying in taxes. The social insurance tax is basically what is taken out of your pay check for Social Security and Medicare. Excise taxes are, “taxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product. There are also excise taxes on activities, such as on wagering or on highway usage by trucks. Excise Tax has several general excise tax programs. One of the major components of the excise program is motor fuel.”
http://www.irs.gov/businesses/small/article/0,,id=99517,00.html
The “All Federal Taxes” row is the sum of all the taxes listed below that row (income, social, corporate, excise). The “All” column shows all income categories (i.e., our 2006 average, not medium, pre-tax income for the US was $90,700) – how the US fares in general. The last three columns show the top income categories (10%, 5%, 1%).
If you read Heritage Foundation literature you are lead to believe that corporations and rich people are paying for everyone else. What they do not tell is that wealthy groups in this country are paying more because they make a WHOLE lot more. Percentage wise they are paying much less than they would have you believe. The top 10% of wealthy corporations are paying a real tax rate of 6.6% of its income. People making an average of $248,400 a year are paying a real income tax rate of 14.1% of their income. Contrary to the Heritage Foundation lies, these are not the highest real tax rates in the world and appear to be very reasonable to me. These folks are living lives of luxury and would have us crying for them at the voting booth – come on folks – think about why they would have you believe this – they want to have more at your expense and they want you to be grateful for this when you vote – is this insanity or what????
If you have median income, here is what has happened to your real income tax rate since 1958. Median income tax rate is defined as, “the exact middle of the income distribution–half of families are above and half are below”:
| Year | Rate |
| 1958 | 6.96 |
| 1959 | 7.49 |
| 1960 | 7.77 |
| 1961 | 7.94 |
| 1962 | 8.3 |
| 1963 | 8.68 |
| 1964 | 7.56 |
| 1965 | 7.09 |
| 1966 | 7.48 |
| 1967 | 8 |
| 1968 | 9.21 |
| 1969 | 9.92 |
| 1970 | 9.35 |
| 1971 | 9.27 |
| 1972 | 9.09 |
| 1973 | 9.45 |
| 1974 | 8.99 |
| 1975 | 9.62 |
| 1976 | 9.89 |
| 1977 | 10.42 |
| 1978 | 11.07 |
| 1979 | 10.84 |
| 1980 | 11.42 |
| 1981 | 11.79 |
| 1982 | 11.06 |
| 1983 | 10.38 |
| 1984 | 10.25 |
| 1985 | 10.34 |
| 1986 | 10.48 |
| 1987 | 8.9 |
| 1988 | 9.3 |
| 1989 | 9.36 |
| 1990 | 9.33 |
| 1991 | 9.3 |
| 1992 | 9.18 |
| 1993 | 9.18 |
| 1994 | 9.17 |
| 1995 | 9.28 |
| 1996 | 9.33 |
| 1997 | 9.32 |
| 1998 | 7.98 |
| 1999 | 7.88 |
| 2000 | 8.02 |
| 2001 | 6.71 |
| 2002 | 6.53 |
| 2003 | 5.34 |
| 2004 | 5.38 |
| 2005 | 5.69 |
| 2006 | 5.85 |
| 2007 | 5.91 |
http://www.forbes.com/2009/04/16/tax-tea-party-opinions-columnists-protest.html
In spite of this, the rich have certainly become much richer with Republicans than Democrats.
“Census Bureau data reveal large, consistent differences in patterns of real pre-tax income growth
under Democratic and Republican presidents in the post-war U.S. Democratic presidents have
produced slightly more income growth for poor families than for rich families, resulting in a
modest decrease in overall inequality. Republican presidents have produced a great deal more
income growth for rich families than for poor families, resulting in a substantial increase in
inequality. On average, families at the 95th percentile of the income distribution have
experienced identical income growth under Democratic and Republican presidents, while those
at the 20th percentile have experienced more than four times as much income growth under
Democrats as they have under Republicans. These differences are attributable to partisan
differences in unemployment (which has been 30 percent lower under Democratic presidents, on
average) and GDP growth (which has been 30 percent higher under Democratic presidents, on
average); both unemployment and GDP growth have much stronger effects on income growth at
the bottom of the income distribution than at the top. Similar partisan differences appear in the
distribution of post-tax income growth of households since 1980, despite the fact that the
corresponding pre-tax income growth data for that period show little evidence of partisan
differences.”
http://www.russellsage.org/publications/workingpapers/bartels/document
Another important point to be made here is about the tax burden or who is taking on more of the tax responsibilities under Republicans. Check this out from 2004 to get an idea of what happened to the middle class during the Bush administration:
“Since 2001, President Bush’s tax cuts have shifted federal tax payments from the richest Americans to a wide swath of middle-class families, the Congressional Budget Office has found, a conclusion likely to roil the presidential election campaign.
The CBO study, due to be released today, found that the wealthiest 20 percent, whose incomes averaged $182,700 in 2001, saw their share of federal taxes drop from 64.4 percent of total tax payments in 2001 to 63.5 percent this year. The top 1 percent, earning $1.1 million, saw their share fall to 20.1 percent of the total, from 22.2 percent.”
http://www.washingtonpost.com/wp-dyn/articles/A61178-2004Aug12.html
The 64.4%, 63.5%, 20.1% and 22.2% quoted here are not marginal or effective tax rates. They are the percentage of total taxes these folks are shouldering. These values are also shown for 2006 and 2005 in the section of the CBO chart mentioned above under the heading of “Share of Tax Liabilities”.
Here is another chart:
| Change in Real Family Income by Quintile and Top 5%, 1979-2005 | |||||
| Bottom 20% | Second 20% | Middle 20% | Fourth 20% | Top 20% | Top 5% |
| Less than $25,616 | $25,616-$45,021 | $45,021-$68,304 | $68,304-$103,100 | above $103,100 | above $184,500 |
| -1% | 9% | 15% | 25% | 53% | 81% |
http://www.demos.org/inequality/numbers.cfm
So, the point is that there are many groups that spend a lot of time and money making sure you act and think they way they want you to – even against your own interests. This is why so many are alarmed at the Supreme Court’s decision to, in essence, allow no campaign finance reform, the wealthy will have no limits on the money they can spend to manipulate you. My solution is to educate folks so no matter how many dollars are spent by the wealthy it will not be worth their time and money at the voting booth. Folks, we need to grow up and quit believing every spam we come across. Otherwise, history has shown time and time again that revolution will be the inevitable outcome and that has never worked out in most cases for the long run. Here is what I think we, as the electorate, need to do:
-do the research
-think about the vested interest of who is trying to convince you of something
-vote wisely
Do I have a vested interest? Did you pay for this? Are you going to pay for this? Read this post if you want to know my real interest:
http://mixermuse.com/blog/2010/01/19/the-criminal-and-the-human-a-rational-approach-to-liberalism/
I am probably upper middle income with the best health insurance money can buy, federal government health insurance. My wife retired from the GAO.
I am a small business owner. My business is doing well.
I am liberal or left of liberal but I am also a believer in true conservatism defined as:
-Taxes and government…genuine conservation has the goal of conserving precious resources not for selfishly, perceived goals but for the good of society; so that suffering is addressed efficiently and effectively.
-Military…Non-intervention in other sovereign nation’s affairs
-Equality is constitutional (Abraham Lincoln)
-Separation of church and state
All these are the best of conservatism and have been lacking in the Republican Party in recent years. If I am wrong, show me. I will change my mind (not saying it is easy but I have done so many times in the past). Otherwise, I will live, act and vote in the meager amount of integrity that I have been given.