My good blog bud, King, over at All Da King's Men, very often writes about government spending, pointing out, correctly, that government is often recklessly wasteful with federal tax dollars. Hard to disagree.
At the same time, my blog buddy often touts the cutting of taxes, especially for business…..the corporate income tax rate is often criticized by King as being too high, stunting any competitive edge and disincentivizing any expansion.
First, let's look at the actual tax rate for the richest Americans….
The average tax rate paid by the richest 400 Americans fell by a third to 17.2 percent through the first six years of the Bush administration and their average income doubled to $263.3 million, new IRS data show.
The 17.2 percent tax rate in 2006 was the lowest since the IRS began tracking the 400 largest taxpayers in 1992, although the richest 400 Americans paid more tax on an inflation-adjusted basis than any year since 2000.
The drop from 2001’s tax rate of 22.9 percent was due largely to ex-President George W. Bush’s push to cut tax rates on most capital gains to 15 percent in 2003. Via Digby
The horrendous reduction of the capital gains tax rates was objected to by former Bush Treasury Secretary, Paul O'Neil……to which Dick Cheney responded, "We won the election, it's our due." Which suggests to The Reverend that Republican politics is primarily concerned with rewarding America's wealthiest. Imagine that.
And then, contrary to much of the hand-wringing done over corporations carrying too much of the tax burden….we have this….
The news that more than 60 percent of U.S. corporations failed to pay any federal taxes from 1996 through 2000 when corporate profits were soaring and that corporate tax receipts had fallen to just 7.4 percent of overall federal tax revenue in 2003 – the lowest since 1983 and the second-lowest rate since 1934 – is an outrage. But it should come as no surprise to anyone who has been paying attention to national tax policy over the past few years. The General Accounting Office (GAO) report also found that an astonishing 94 percent of corporations reported tax liability of less than 5 percent of their total income during the same time period. Link
An even more recent GAO report….
"About two-thirds of corporations operating in the United States did not pay taxes annually from 1998 to 2005,…" Link
The richest in America have not only gotten a huge windfall over the last decade, as far as paying taxes, but in addition, the one third of big corporations who actually pay taxes have paid income taxes at a 5% rate.
Add to this data the fact that the wealthiest Americans have recently amassed an even larger percentage of our nation's wealth……
From the IRS for the time period 2002-2006…
"The 15,000 families at the top of the income scale saw their annual incomes go from about $15 million a year to nearly $30 million," accounting for more than 25 percent of all of the growth in income for the entire country. The remaining 1.7 million families in the top 1 percent of households accounted for nearly another 50 percent. But while the "top 10 percent of families accounted for 95.3 percent of the nation's income growth between 2002 and 2006," the average real income for families in the bottom 90 percent of households increased by about $300 to a little less than $30,700." Link
How, then, are we supposed to believe that tax rates on corporations and the richest families are much too burdensome and, therefore, should be lowered even further,…or….made permanent at Bush's reduced rates?
It would seem from the empirical data that just the opposite would be the way forward…..the most powerful and the wealthiest should bear more of the tax burden, not less.
What am I missing?
Finally, in light of the above data, how is it even possible to take current GOP leaders seriously when they suggest stuff like this…..
Republicans are calling for economic stimulus that does not increase federal spending. The Republican plan calls for temporary eliminating the capital gains tax on purchases of stocks and other equities, lowering the corporate income tax, and passing the American Energy Act, to boost all phases of domestic energy production. Link
Boehner, Cantor, McConnell, Kyl and their cast of merry men have either followed their GOP Leader, Rush…..and are so mind-blitzed by Oxycontin highs that they can no longer understand basic arithmetic….or read…..or….they only represent a tiny, very rich, segment of America's population.
I'm beginning to think it's both.
