The charts from the NYT’s are irrefutable, showing a shocking change in how much taxes have been cut on the rich over the past 70 years so now the middle class pay a higher rate than the rich.
The Tax Rate on the Rich is Now Lower than On the Middle Class
There is a phrase, a picture tells a thousand words. The graphs that follow the quote below do precisely that….and more.
Almost a decade ago, Warren Buffett made a claim that would become famous. He said that he paid a lower tax rate than his secretary, thanks to the many loopholes and deductions that benefit the wealthy.
His claim sparked a debate about the fairness of the tax system. In the end, the expert consensus was that, whatever Buffett’s specific situation, most wealthy Americans did not actually pay a lower tax rate than the middle class. “Is it the norm?” the fact-checking outfit Politifact asked. “No.”
Time for an update: It’s the norm now. “NY Times: The Rich Really Do Pay Lower Taxes Than You
Tax Rate in 1950 by Income Group
Each succeeding chart shows the rates at which we tax each income bracket. The most obvious trend is the inexorable decline in taxes on the wealthiest Americans, but you will also note a significant increase in taxes imposed on the poor and working poor. Keep in mind, the poorest Americans paid only 15% in taxes in 1950 and pay 25% now. When you are earning $10/hour, working two jobs that 66% increase is punitive.
The neo-liberal argument has been that reducing taxes will circulate more money into the economy and increase private investment. The unspoken consequence is the gutting of our government’s ability to invest in us.
Instead we get the private investment promised from tax cuts, private investment in anything that turns a quick profit or results greater shareholder returns, instead of a health system, an infrastructure, a transition to renewables, a strong public education system, and anything else that might actually benefit the rest of us. How is this tax policy working for you?
Tax Rate in 1961 by Income Group
It is important to note that this shift in policy has occurred under EVERY administration, no matter who is President or who is the majority in Congress. There are no heroes here.
Tax Rate in 1980 by Income Group
Reagan was the King of Tax cuts and the inventor of “trickle down” economics, but the continued erosion of our tax base through various tax incentives, cuts and other 1% and corporate giveaways continued through Bush, Clinton, Bush, and Obama until Trump …..
Tax Rate in 2018 Income Group
From the NY Times:
By the middle of the 20th century, the high-tax advocates had prevailed. The United States had arguably the world’s most progressive tax code, with a top income-tax rate of 91 percent and a corporate tax rate above 50 percent.NY Times: The Rich Really Do Pay Lower Taxes Than You
But the second half of the 20th century was mostly a victory for the low-tax side. Companies found ways to take more deductions and dodge taxes. Politicians cut every tax that fell heavily on the wealthy: high-end income taxes, investment taxes, the estate tax and the corporate tax. The justification for doing so was usually that the economy as a whole would benefit.
The justification turned out to be wrong. The wealthy, and only the wealthy, have done fantastically well over the last several decades. G.D.P. growth has been disappointing, and middle-class income growth even worse.
The American economy just doesn’t function very well when tax rates on the rich are low and inequality is sky high. It was true in the lead-up to the Great Depression, and it’s been true recently. Which means that raising high-end taxes isn’t about punishing the rich (who, by the way, will still be rich). It’s about creating an economy that works better for the vast majority of Americans. “
Click here to review the full NY Times piece. Click here to read an article debunking the myth that tax cuts generate economic growth. And while the neo-liberals all presume that economic growth is good, ponder whether it isn’t time to stop producing more of most everything we don’t need.
The Impact of the Gutting a Once Just Tax Policy
You have to wonder how for the last 70 years, American voters have supported Presidents and Congresses that have systematically crafted policy that has eroded any sense of justice to our tax policy.
This has been an entirely bipartisan effort with Democrats only rarely summoning the courage to face down their major donors and do what is right for the American public.
Tax policy and budgets are both moral documents. They capture very precisely the values driving policy. Over the past 70 years, we have abandoned our infrastructure and unraveled our social safety net, leaving tens of millions of Americans inexcusably vulnerable. When we had a choice to bail out banks or the millions of Americans who had lost their homes, Democratic leadership chose the banks.
Where does it end? Your thoughts? But before you comment below, take a look at this most revealing video. It shows the impact that our tax policy has had feathered the nest of the 1%. It will come as no surprise that the wealthy have accumulated obscene levels of wealth, while the middle class has gained nothing and the working poor and the poor have been utterly decimated.
In solidarity, Paul & Roxanne