So in a nutshell, the chart shows that until around 1940, tax burdens were low for everyone, in historical terms. Then they rose sharply for everyone until about 1970. At that point, the rich and poor began to diverge. Those making around $10,000 to around $50,000 per year enjoyed a comparatively low-tax period in the 70s, but by the early 80s they were taxed slightly higher than the historical average. In the 2000s, their tax rate came back down a bit. By contrast, those making more than roughly $200,000 a year saw a sharp decrease in their tax burden starting in the 80s. That trend has continued to this day.

It's clear, then, that across the board, today's tax rates are low by historical standards--and for the rich they're very low. If the bottom of the chart showed more red and less blue, our deficit problem would be a lot more manageable.

The chart also has implications for another topic we've written about here before--wealth and income inequality. As you can see, no one's taxes today are particularly high by historical standards, but those making $1 million or more per year--that is, roughly the top 1 percent--enjoy the lowest burden, relative to past rates.

At a time when a horde of stats indicates that the gap between rich and poor has widened into chasm--and when Congress and the White House are set to argue again later this year about whether to permanently extend the Bush tax cuts for the rich--it's well worth keeping this bigger picture in mind.

There is a chart you can refrence, if interested in facts vs political posturing.

http://news.yahoo.com/s/yblog_thelookout...burden-for-rich

So how is it that about 50% of the people don't pay any federal income tax?

Here is how: http://www.theatlantic.com/business/arch...come-tax/38627/

Tax the rich! That'll solve all our woes.

I've got a better idea. Keep three nuke subs roaming the globe and make public statements that any country that phucks with us will be immediately turned to glass. Keep a 100,000 man standing army in case the Canadians decide they feel like inhabiting a warmer climate. Then give the big middle finger to the military industrial complex that spends more tax dollars than the GDP of some European nations. Gas prices will drop $2.00 overnight since the world's largest user group will no longer be using it. Eliminate all that and we should be able to cut taxes to roughly half of what we pay now.

Even with that gov't "revenue" reduction we'll still have plenty of money to turn our country into the "free-handout", do nothing, rotten cess pool, everybody is equal, socialist utopia so many of you hope for.

Sound good?

While that is a "scary" sound-bite, what percentage of the nation's income do you think the top 20% earn? What percentage of the nation's wealth do you think those 20% have?

I'll gladly pay my "unfair" share if anyone wants to lob me into the top 20%.

Let's maintain the proper context, Chuck:

"The top one percent soaked up two-thirds of the income gains of the 2000s..."

It is obvious that we can eliminate the debt simply by taxing the wealthy at 1/2 the rate they paid in 1960. I do not consider that soaking the rich. Damn I wish I was in a higher tax bracket. PLEASE soak me!!!

If the republicans really cared about America as much as they do about their ultrarich sugar daddys we could eliminate the debt easily. Three steps put the tax rate back where they were when we had the Clinton era surplusses, cut corporate welfare, and cut the military down to a level where we only spend five times as much as China and Russia combined.

I don't think the top 20% is the appropriate demographic to study in gauging how much tax the richest Americans pay relative to others. The last figure I saw that I know was legit was from the '90s, when it was reported that 10% of Americans accounted for 90% of the wealth. I would venture to guess that gap has only widened since then, but I don't know the current numbers, so I'll stick with those.

If the top 10% account for 90% of the wealth, the other 10% of those being placed under the 20% "rich" umbrella are surely accounting for a much smaller percentage of wealth than the top 10%, yet they are being taxed at the same rate as the top 10%. If I were one of those people, I would be really upset with this tax structure. Being among the 30% that aren't called "rich" and still pay some amount of income tax, even I don't like seeing that 50% aren't paying any tax at all, but I think that top 10% is definitely getting over on the rest of us, especially the 10% immediately below them.

I think that second tier (top 11-20%) represents the folks who will tell you they worked hard for what they have and shouldn't be shouldering the burden of those who aren't contributing. For those folks, that argument makes sense to me. On the other hand, I'm pretty sure there are very few in the top 10% who have amassed their own wealth through hard work and dedication. Most of them were likely born into rich families and have never lifted a finger, except to make investments that earn them more money. To look at this from an honest perspective, I think we should only qualify the top 10% or so as "rich."

Chuck, choosing the quote you did first post post seemed inline with the meme that the rich are unfairly taxed, which is an OPINION I object to. I didn't disagree with the sentence itself, which is FACT.

Your most recent post is dead-on and you are really just reinforcing the article. "Tax breaks" are created by politicians to avoid the idea of RAISING taxes to pay for something. It would be much more honest to avoid giving tax breaks and just keeping the system simply tax and then spend. Irish Rogue has discussed this at length in the recent past in referencing things like "child deductions" and "mortgage deductions".

The fact remains that despite the loudest voices claiming otherwise, people are now taxed at a lower level than they have been in the last several decades.

-AP

Glad to see you and Dave back...

Flea,

While I don't fully endorse your model, I'm fully willing to go along with it. I'll leave the second 10% alone. Hell, I'd leave everyone alone except the richest 2%. Those people alone could solve our debt issues. What continues to amaze me is watching poor people fight for the interests of the rich. It is utter brilliance to have people so worked up about being "oppressed by the liberal elite" to realize they have a giant rich-person-penis in their ass.

-AP

Generally a wise decision.



+1. That's really what I was getting at. I just couldn't come up with anything as eloquent. Giant rich-person-penis in their ass... poetry, at its finest.

+1

Here's an indisputable fact: I've already paid the IRS $9,500 in 2010 and I get to send them another $4500 by April 15th. $14,000 IMO is plenty and that is with 2 kids and the mortgage deduction. I didn't even get dinner or a kiss first.

DB:

No one likes to pay taxes, but the fact remains our tax rates are quite low today compared to previous times. Assuming you had AGI of $100,000 in 2010, your incremental tax rate (The rate you would pay on amounts in excess of $100,000 would be 33%. If I'm reading the chart posted below correctly, had you earned that same amount in 1968 your incremental tax rate would have been 60% . In 1935 the incremental rate on amounts in excess of $100,000 was 56%.

It looks to me like your parents and grandparents had it much worse.


http://www.taxfoundation.org/publications/show/151.html

Our parents and grandparents had wars to pay for. The invasion of Iraq and the war in Afghanistan is the first time the United States has ever been in war and didn't pay for it by raising taxes -- significantly.

Goes to show you how much more the opinion of the wars would have been swayed if everyone's taxes had been raised to actually pay them.

Dave, there are way more people making over $100,000 today versus 1935 and comparing the tax rates from then and now probably isn't very effective. $1 in 1935 had the same buying power as $16 dollars in 2010. So, if I'm figuring this right, the $100,000 earned today would be equal to $6,250 back then. That $6,250 would put you in the 10% bracket, not 25% as today. I doubt that $625 was easy to swallow in 1935 as that was the depression, I do know that I'm not enjoying sending off $14k though. I would much rather stimulate the economy with about $5k of it on a new O/B bracket for my Olympic. Maybe next year.

One other thing to consider is that there are a lot more people to fleece now as compared to the 1970's and the 1930's too. You can drop the rate some and make up the difference in volume.

Productivity isn't up 80% because the workers are working 80% harder--- it's mostly because of innovations in equipment(usually replacing workers)
More goods produced by less workers equals more productivity.

Your points are well taken. And I do understand the lack of love for taxes. It has always been so. I paid about the same as you and would have liked to keep it all. But I also understand we need to pay for our wars, our highways, airports, etc. If not me, who?

If you look at a more recent year, say 1968, you see the tax rate on $6,000 was 25%. What I don't understand it how today so many are howling about their high taxes when that was not such a big thing back then. What has changed? Perhaps a continoue PR campaign by those who want the American dream but do not want to help pay for it?

I would imagine that in 1968 people definitely howled about how much they paid in taxes, they have been doing that since before there was a USA. There was no talk radio, cable news, or fishing boards on the internet to complain with , so it wasn't heard.