In this post, Bruno commented and posted this link to reference this statement:
In 2005, the top 1 percent of tax returns paid 39.4 percent of all federal individual income taxes and earned 21.2 percent of adjusted gross income, both of which are significantly higher than 2004 when the top 1 percent earned 19 percent of AGI and paid 36.9 percent of federal individual income taxes.
I assume that the purpose of reporting the data in this way is to invoke a natural sense of fairness to people. That being that one’s share of B should reflect their share of A. That B became “significantly higher” suggests some unfairness. Oh for the humanity of it.
The report could have reported that the top 1%’s tax burden in dollars was 20% higher, however their share of income was 21.8% higher. Now is this fair? Is this fair of the report to have noted the rise of both income and taxes paid in a manor that makes the top1% look as if they are getting unfair treatment and not show that the bottom 99% ‘s income only went up 6.2% but their dollars paid in income taxes went up 7.9%?
How fair is this? All of it? 1980 to 2005 all? Adjusted incomes all?
Well, it turns out this report had a link to an exel file of their data. Perfect! As a dutiful AB’er I took it as my charge to see what that data was really showing. Turns out since 1980, the messing with the tax rates has had some strange effects. Fairness is missing in all of it, even the vaunted Clinton era.
Look at this chart. Notice how the income for the bottom 99% is continuously falling away from the total income. Of course, you can’t miss the top 1% line. Up, up and away (in my beautiful, my beautiful balloon…)
The next chart is of total taxes paid. Notice the similarity. The rising share of total income that becomes income taxes is certainly a function of one’s rising share of total income.
But, the income going up faster than the rise in taxes paid or the taxes paid rising faster than the income is a function of the rates.
This chart may not be to impressive unless you look real close. Look between 1991 and 2000 at the bottom 99%. Do you see that it is rising? This is a period that we are suppose to be considering a symbol of progressive taxation and yet income taxes paid as a percentage of income is rising for the bottom 99% while it is descending for the top 1%. The actual percentages for the 99%’ers start in 1992 at 10.9 and peaks in 2000 at 12.1%. Where as the top 1% go from 25.05% 1992 to 28.87% 1996 to 27.45 2000.
Update, forgot these 2 paragraphs:
Is this what we are to consider progressive taxation? No it is not. The covers blown. We have not had a progressive tax adjustment since we started playing with the code with Reagan. And it hurt more knowing that it was decidedly unprogressive during a term when the president ran as a progressive. It hurts even more because Clinton’s term is being pointed to as a time to emulate. A rise of share of income to the top 1% of 6 points in 8 years and now we see that the bottom got buffaloed in the income tax department too.
The highest total of income collected as income taxes in this series of data was 1981 at 15.76%. Being that Reagan hadn’t started blowing the budget, this could reasonably be considered the amount of money we have to pay to keep the budget in good shape. (That is assuming all other taxes stay the same as 1981. They didn’t.) But NOOOOOOOOOOO. We see us paying less each year until 1990. Only 23.25% was paid to take care of our house that year. The top 1% paid 25.1% of the house needs out of 14% of the income. The rest of us paid 74.9% of the house needs out of 86% of the income.
By 2000 we are paying 15.26% of our total income for the needs of the house. The top 1% is paying 37.4% of the need out of 20.8% of the income. The rest of us are paying 62.6 % of the needs out of 79.2% of the income. Ok, I guess there was some progressiveness here.
But! In 1992 the income per capita for the top 1% was $152,743 and $11,055 for the rest. By 2000 it’s $343,357 and $15,999 respectively. Now I ask you, is this progressive? A 124.8% increase for the 1%’ers and only a 44.7% increase for the rest of us. Remember, this is during the Clinton years!
Since that time, the house has really been starving for attention. In 2005, the year the top is or is not getting screwed (I think the numbers show they are not) we collectively only paid 12.45% of our income to the house needs. We have never paid so little. Well, except for 2003 when we paid 11.9%. Which just happens to be somewhere between the 1999 and 2000 percentage for the share of income paid by the bottom 99%. Yes folks, currently we are trying to fund the house on the same percentage of income that only the bottom 99% use to pay. Or, put another way, we are funding a 304.2% (BEA table 3.1 1981 to 2005) increase in house needs on only a 234.3% increase in payments to the house while the total source has increased 319.2%. That’s 260.2% (awfully close to the house needs rise) for the bottom 99 and 970.3% for the poor souls burdened with 39% of the house needs.
Let me be blunt: This all sucks. Just plain sick and tired of having my head played sucks.