Opinion No, the Richest One Percent Don’t Pay 40 Percent of the Taxes.
Biden is picking a fight on corporate taxes with Disney, Fedex, and others. Senate Democrats may go easier.
The brawl could be "ugly as hell," a former Democratic aide said, as former Senate Democrats who are now major lobbyists work to spike his tax hikes."It's time for working families, the folks who built this country, to have their taxes cut," Biden said on Friday. "And those corporate interests doing everything they can to find allies in Congress to keep that from happening … I'm going to take them on.
One of the sad constants of American political debate is that, anytime theis to be either raised or lowered, Republicans will repeat a certain statistic. To wit, “The Stat” is that the highest-earning one percent of taxpayers pay 40 percent of all income taxes. Conservatives consider this fact a dispositive justification either against any proposal to increase taxes on the rich, or in favor of any plan to reduce it. Over just the past day, I have seen it circulating — , , , everywhere.
It is a figure that has been repeated a million times on Fox News diatribes and in College Republican lectures sponsored by aging billionaires. It is one of the handful of debate-enders, like “Ronald Reagan defeated communism” or “gun controls don’t stop crime,” that any good Republican apparatchik has at his fingertips.
White House, business groups tangle over Biden tax increases
WASHINGTON (AP) — President Joe Biden has a simple message for fellow Democrats about his plan to raise taxes to remake large swaths of the American economy: look beyond the bottom line. Biden is trying to persuade Democrats to embrace a more emotional argument, namely that the plan is fair, that it increases taxes on those who can afford to pay more and spends money on programs targeting children and the middle class. The president has proposedBiden is trying to persuade Democrats to embrace a more emotional argument, namely that the plan is fair, that it increases taxes on those who can afford to pay more and spends money on programs targeting children and the middle class.
The Stat is literally true. But it is deeply misleading — so misleading, in fact, that it routinely fools even the people who are citing it into thinking it indicates something other than what it actually means.
The first problem with The Stat is that it makes no reference to the proportion of income the rich earn. The juxtaposition between one percent and 40 percent is meant to convey the idea that a small number of people are carrying a gigantic and disproportionate burden, but the figure lacks any context when it omits how much money they earn in the first place.
Indeed, it turns the fact that rich people account for a massive share of the income pool into a reason to see them as mistreated. One common move for polemicists brandishing this figure is to note that the share of taxes paid by the rich is “” over the past couple decades — which it is, on account of rich people claiming a larger share of the national income. The logic implied by The Stat is that the bigger the proportion of income earned by the richest one percent, the more imperative it is to reduce their tax rates, so that they don’t pay too high a share of the tax burden.
Democrats face divisions over pledge to scrap Trump's tax cuts
Democrats have been waiting for years to reimagine the tax code so that, in their words, the wealthy are paying their "fair share." But overturning key pieces of the GOP's 2017 tax law won't happen without a bruising fight.Special interest groups are already preparing for a sustained campaign against those changes, and the next weeks will test whether Democrats have the resolve to make good on what has been a campaign slogan up until now.
Second, and worse still, The Stat ignores the fact that income taxes are just one component of the federal tax system, and federal taxes are just one component of the total tax system. The federal tax system is far more progressive than state and local taxes, which rely heavily on regressive burdens like sales taxes. (It’s harder to impose progressives taxes at the state or local level, since rich people moving to a different town or state is relatively easy, while leaving the country is more burdensome.)
What’s more, even within the federal tax system, income taxes are just one, relatively progressive, component. For most workers, the biggest tax they pay isn’t income tax but payroll tax, the line marked “FICA” on your pay stub, which finances Social Security and most of Medicare. That tax is regressive and only applies to the first $137,000 of income.
The trick of describing only the share of income taxes paid by the richest one percent is to make people think it means all taxes. Even professional movement conservatives make this mistake. Here’s Jay Nordlinger:
House Dems have a $2T tax plan. Here’s what you should know.
Here are six things to know about the plan. No wealth tax The U.S. has an income tax system, and not a wealth tax system like the one Sen. Elizabeth Warren (D-Mass.) advocates, and that’s not going to change under House Democrats’ proposal. With only a tiny majority in the chamber, and at the mercy of their moderates, Democrats are focused on raising existing income taxes on the rich rather than more controversial proposals to go after accumulated wealth. Their plan would raise the top marginal income tax rate to 39.
All my life, I've heard, "Tax the rich!" Some people even put it on dresses. According to the latest data, the top 1 percent of earners in America pay 40.1 percent of federal taxes; the bottom 90 percent pay 28.6 percent. Come on. If you want more revenue -- look to the "middle."— Jay Nordlinger (@jaynordlinger)
Another right-wingpublished the other day makes the same error, first using the “income tax” qualifier, then slipping out of it to assert, falsely, “the top 1% paid more in taxes in 2018 than the bottom 90%” — an extremely common error by conservatives.
Republican politicians, including George W. Bush, have made the same error. The Stat is technically limited to income taxes for a reason — it’s describing a narrow category of taxation that is especially progressive. But it only works because it makes the listener believe it describes all taxes. The trick works so well it fools the people repeating the stat.
The actual truth about the American tax system is that it is slightly progressive. The richest one percent earn about 21 percent of the income and24 percent of the taxes:
Dems warned on taxes: Voters already suffering ‘inflation tax’
People consider the immediate pain of rising inflation a tax on their wallet, a warning to House and Senate Democrats as they write up over 40 new taxes to pay for President Joe Biden’s $3.5 trillion wish list. © Provided by Washington Examiner In a new survey provided to Secrets, Zogby Analytics found near-universal agreement that rising prices for daily goods are hitting voters. The Zogby poll, which surveyed an unusually large group of 4,298 likely voters, found that 71% agree that higher prices are “another 'tax' on Americans.” Just 19% disagreed in the survey, which had a 1.5% margin of error.
Nordlinger helpfully summarizes the conservative notion that the rich are taxed to the limit and cannot pay any more. Of course, we have plenty of recent experience with taxing rich people at higher levels. Restoring the Clinton-era top tax rate of 39.6 percent obviously did not stop the rapid growth seen under Clinton. The Trump tax cuts for business owners and heirs to large fortunes were supposed to encourage more business investment butto do so. There are gaping loopholes in the tax code for the wealthy that allow massive fortunes to at all.
A great deal of evidence supports the notion that the tax system could increase the burden on the very rich with little or no economic drag. That idea also happens to be extremely popular. Because it is popular, conservatives feel special urgency to insist it cannot be done. But it can.
Mind the (tax) gap: To fund new spending, people should pay the taxes they owe .
Americans who play by the rules should not be made to carry water for those who don’t.But there is one obvious way to help fund the package that won't raise anyone's taxes, won't shrink any spending programs and has an at least 40-year history of bipartisan support. It's called closing the tax gap.