Tax cuts for all but the almost-rich

ah yes, fun with charts!

How about posting the percentage of after-tax income charts? I just did them, and there is a fairly steady upward trend for the top quintile (and all the top percentages) and an equally steady downward trend for everyone else.

To me, those are far more important number than "tax rates", because they show that despite the rich are getting a bigger slice of the pie, and everyone else's slice is getting smaller...

You just can't argue with stupid.

Yes, the wealthy received tax cuts because the top ten percent of income earners pay more than 50% of the taxes.

It is good when anyone gets a cut in taxes. Every tax cut result in more and not less money coming into the federal coffers. This is simply the fact.

But the whiny losers hate the harshness of capitalism. The free markets makes everyone work for their money. The losers refuse to accept that they must either adapt or perish in the labor market just as any and every company must adapt or die.

It is good when the so-called rich have their tax bite lowered. Sometimes, they put some of that money in a financial institution. This increases the supply of money for borrowers and lowers the cost of credit.

Sometimes the so-called rich buy stocks and bonds. This money is used by corporations and municipalities to build, modernize, and expand. All of this creates jobs and means higher demand for skilled labor and higher wages for the same.

Some of the money kept by the so-called rich is simply spend. This money goes back into the economy where it benefits both skilled and unskilled labor. Nothing is wrong with any of this.

But if the federal government gets it, much of it will best wasted or lost in the bowels of a bloated bureaucracy.

Some ignoramus complains that his tax dollars are going to tax cuts for the rich. How utterly absurd. Buddy, your tax dollars are going to the so-called poor. A large percentage of our population gets tax refunds when they never paid any tax dollars in and are very unlikely to do so any time soon. The earned income credit is the hallmark of this idiotic system. Many families receive thousands of dollars from the fedgov in this way having not contributed a single shiny scheckel in taxes.

If you do not have a job, retrain, move, clean up your act, or stop complaining.

If you have received your economics training from ABCNNBCBS or the DNC, you have no education whatsoever. If you are complaining about the unfairness of life, you need to know that the only fair you can count on will be showing up next fall at your county seat. Please look for the ferris wheel.

If you think that you are underpaid, then quit and find someone who appreciates your skills. Better yet, start your own company and prepare for all of that easy money you are sure will come your way.

But please, stop your bitching.

To add to p_luk's point, the "rich" make greater use of the commons than do the "poor." Courts, banking services, the market...they all are used to a greater extent by the rich compared to the poor (and middle class).

To p_lukasiak - in the recent times we have a lot of cheap immigrant labor in two lowest quintilles.

There is one good thing about current tax system - it is practically impossible to change.

To Alex,

You probably not aware of what a quintile is...statistically speaking...otherwise you'd know what you said is wrong.

Basically, a quintile means you divide your data into 5 sections with an equal number of datapoints in each section. If your conjecture is correct, then the quintile cut-off points would drop for *all* 5 groups. However as p_luk notes, it drops for everyone else and increases for the top quintile.

To Corey - quintiles we are talking about are per population count, so you assumption is that there is a roughly equal percentage of recent immigrants in all income groups - wow.

@Alex:

Not to ad hom, but do you take me for blind and stupid?

Here's what you wrote: "in the recent times we have a lot of cheap immigrant labor in two lowest quintilles."

So YOU said it's increased cheap immigrant labor in the lowest quintiles, as if to explain lower wages. I'm telling you that doesn't explain why the rich quintiles get more real income faster than other quintiles.

To Corey. I am glad you agreed with me so fast on the case of two lowest quintiles - the impact of the high number of lower paid new immigrant workers is the most natural cause to investigate.

And about the rich quintiles.

1. I did not said a word about them.

2. Average income in the fourth quintile is $85k per household which is not rich in my view. And there are only 5 quintiles in existence.

The top ten percent of income earners most certainly do not pay 50% of all taxes. That is an often repeated lie. The truth is that they pay 50% of all *income* taxes. They only pay about 20% of all payroll taxes and even less of sales, state, property and other local taxes.

The rest of Yadgyu's post is similar nonsense, but that one is the most obvious blarney.

Actually, according to the CBO data, the top 10% of the income distribution paid 54.7% of all federal taxes (including payroll taxes) in 2005, up from 40.7% in 1979. They paid 72.7% of federal income taxes, up from 48.1% in 1979. But again, this is not because their tax rates have gone up but because their slice of the income pie has grown. The top 10%'s share of pretax income went from 30.5% in 1979 to 40.9% today. After-tax: 27.6% to 37.4%.

And yeah, the CBO does not include state and local taxes in these calculations.

To SanFrancisoJim - yes this is how Democrats look "without masks": they tax waitresses and talk about soaking the rich.

BTW, it is understandable - there are too few really rich people in the US. Around 2000 I made an exercise - what level of income confiscation would be required would it be the only source of federal and local government revenue - it proved to be that confiscating everything above $58k would not be enough. I still have it somewhere on one of my computers.

Looking at the numbers again: second and middle quintiles posted 9.2 and 9.5 % for payroll tax.

It seems like the data a heavily skewed by the presence of retirees in those quintiles. So, working households in these quintiles pay way more in taxes comparing to the raw numbers in the tables.

I'm late, but a few quibbles:

1. The graph doesn't show trends in national income, an increasing portion of which goes to the rich. When a minority of people are taking the vast majority of the wealth created, they should be paying more in taxes, but as we see, they've managed to lower their tax burden even as they take more national income.

2. As others noted, it's important to consider state and local taxes, since they are much more regressive (some states have only a sales tax, e.g.) and so disporportionately tax the poor.

3. The graph doesn't reflect a key tax change that will grow to benefit the wealthy: dividends and cap gains are now taxed at a much lower rate than salary income, at 15%. The wealthy have much more investment income, and since this type of income grows faster than salary income (which has stagnated for most), this cheaply-taxed income source will only grow as a percentage of the rich's overall income.