{"id":249,"date":"2010-01-26T19:20:05","date_gmt":"2010-01-26T19:20:05","guid":{"rendered":"http:\/\/mixermuse.com\/blog\/?p=249"},"modified":"2014-11-15T10:12:02","modified_gmt":"2014-11-15T17:12:02","slug":"poor-rich-folks","status":"publish","type":"post","link":"https:\/\/www.mixermuse.com\/blog\/myths-exposed\/poor-rich-folks\/","title":{"rendered":"Poor Rich Folks"},"content":{"rendered":"

Republicans, the home of many wealthy corporations and individuals, control public perception through the media.\u00a0 They are very good at it \u2013 much better than Democrats.\u00a0 Maybe the media is liberal if you listen to them but voters fall in line like zombies to their beckoning call.\u00a0 The Heritage Foundation, a very conservative \u201cthink tank\u201d (I prefer to call them a propaganda tank), stated during the 2008 campaign that, \u201cSenator Obama’s new tax rate would give the United States one of the highest tax rates among developed countries.\u201d<\/strong>\u00a0 They went on to state, \u201cThe top marginal rate would exceed 60 percent with the inclusion of state and local taxes\u201d<\/strong>.\u00a0 The article would have us believe that the US under President Obama will have the highest taxes in the world.<\/p>\n

http:\/\/www.heritage.org\/Research\/Taxes\/wm1973.cfm<\/a><\/p>\n

I have found the Heritage Foundation to be in the big time business of deception and public manipulation (the US Chamber of Congress as well).\u00a0 Both of these groups are private and bought and paid for by wealthy Republicans.\u00a0 So where is the deception in the article cited above?<\/p>\n

It is in the small phrase \u201cmarginal rate\u201d.\u00a0 The fact is that there is something called \u201ceffective tax rate\u201d.\u00a0 Marginal rate does not include pre-tax dollars.\u00a0 Marginal rate is the rate\u00a0before all the tax loop holes.\u00a0 Tax loop holes are spread more generously with the wealthy (individuals and corporations) and less generously with middle income to low income groups.\u00a0 The effective tax rate is what individuals and corporations pay after their tax loop holes are taken into account.\u00a0 Effective tax rate is the rate after all the tax loop holes \u2013 what they really pay.\u00a0 The Congressional Budget Office has generated data on the effective tax rate ever since 1979.\u00a0 Here is the latest one from 2006:<\/p>\n\n\n\n\n\n\n\n\n\n\n
Distribution of Federal Taxes and Household Income, 2006<\/strong><\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nLow<\/td>\n\u00a0<\/td>\nMiddle<\/td>\n\u00a0<\/td>\nHigh<\/td>\nAll<\/td>\nTop 10%<\/td>\nTop 5%<\/td>\nTop 1%<\/td>\n<\/tr>\n
Average Pre-tax Income<\/td>\n17,200<\/td>\n39,400<\/td>\n60,700<\/td>\n89,500<\/td>\n248,400<\/td>\n90,700<\/td>\n366,400<\/td>\n564,200<\/td>\n1,743,700<\/td>\n<\/tr>\n
All Federal Taxes<\/td>\n4.3<\/td>\n10.2<\/td>\n14.2<\/td>\n17.6<\/td>\n25.8<\/td>\n20.7<\/td>\n27.5<\/td>\n29<\/td>\n31.2<\/td>\n<\/tr>\n
Individual Income Taxes<\/td>\n-6.6<\/td>\n-0.8<\/td>\n3<\/td>\n6<\/td>\n14.1<\/td>\n9.1<\/td>\n16<\/td>\n17.5<\/td>\n19<\/td>\n<\/tr>\n
Social Insurance Taxes<\/td>\n8.5<\/td>\n9.2<\/td>\n9.4<\/td>\n9.6<\/td>\n5.8<\/td>\n7.5<\/td>\n4.6<\/td>\n3.4<\/td>\n1.6<\/td>\n<\/tr>\n
Corporate Income Taxes<\/td>\n0.5<\/td>\n0.6<\/td>\n0.8<\/td>\n1.2<\/td>\n5.4<\/td>\n3.4<\/td>\n6.6<\/td>\n7.9<\/td>\n10.4<\/td>\n<\/tr>\n
Excise Taxes<\/td>\n1.9<\/td>\n1.2<\/td>\n0.9<\/td>\n0.8<\/td>\n0.4<\/td>\n0.7<\/td>\n0.4<\/td>\n0.3<\/td>\n0.2<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/p>\n

http:\/\/cbo.gov\/ftpdocs\/100xx\/doc10068\/effective_tax_rates_2006.pdf<\/a><\/p>\n

The chart shows by average income level what individuals and corporations are really paying in taxes.\u00a0 The social insurance tax is basically what is taken out of your pay check for Social Security and Medicare.\u00a0 Excise taxes are, \u201ctaxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product. There are also excise taxes on activities, such as on wagering or on highway usage by trucks. Excise Tax has several general excise tax programs. One of the major components of the excise program is motor fuel.\u201d<\/strong><\/p>\n

http:\/\/www.irs.gov\/businesses\/small\/article\/0,,id=99517,00.html<\/a><\/p>\n

The \u201cAll Federal Taxes\u201d row is the sum of all the taxes listed below that row (income, social, corporate, excise).\u00a0 The \u201cAll\u201d column shows all income categories (i.e., our 2006 average, not medium, pre-tax income for the US was $90,700) \u2013 how the US fares in general.\u00a0 The last three columns show the top income categories (10%, 5%, 1%).<\/p>\n

If you read Heritage Foundation literature you are lead to believe that corporations and rich people are paying for everyone else.\u00a0 What they do not tell is that wealthy groups in this country are paying more because they make a WHOLE lot more.\u00a0 Percentage wise they are paying much less than they would have you believe.\u00a0 The top 10% of wealthy corporations are paying a real tax rate of 6.6% of its income.\u00a0 People making an average of $248,400 a year are paying a real income tax rate of 14.1% of their income.\u00a0 Contrary to the Heritage Foundation lies, these are not the highest real tax rates in the world and appear to be very reasonable to me.\u00a0 These folks are living lives of luxury and would have us crying for them at the voting booth \u2013 come on folks \u2013 think about why they would have you believe this \u2013 they want to have more at your expense and they want you to be grateful for this when you vote \u2013 is this insanity or what????<\/p>\n

If you have median income, here is what has happened to your real income tax rate since 1958.\u00a0 Median income tax rate is defined as, \u201cthe exact middle of the income distribution–half of families are above and half are below\u201d:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Year<\/strong><\/td>\nRate<\/strong><\/td>\n<\/tr>\n
1958<\/td>\n6.96<\/td>\n<\/tr>\n
1959<\/td>\n7.49<\/td>\n<\/tr>\n
1960<\/td>\n7.77<\/td>\n<\/tr>\n
1961<\/td>\n7.94<\/td>\n<\/tr>\n
1962<\/td>\n8.3<\/td>\n<\/tr>\n
1963<\/td>\n8.68<\/td>\n<\/tr>\n
1964<\/td>\n7.56<\/td>\n<\/tr>\n
1965<\/td>\n7.09<\/td>\n<\/tr>\n
1966<\/td>\n7.48<\/td>\n<\/tr>\n
1967<\/td>\n8<\/td>\n<\/tr>\n
1968<\/td>\n9.21<\/td>\n<\/tr>\n
1969<\/td>\n9.92<\/td>\n<\/tr>\n
1970<\/td>\n9.35<\/td>\n<\/tr>\n
1971<\/td>\n9.27<\/td>\n<\/tr>\n
1972<\/td>\n9.09<\/td>\n<\/tr>\n
1973<\/td>\n9.45<\/td>\n<\/tr>\n
1974<\/td>\n8.99<\/td>\n<\/tr>\n
1975<\/td>\n9.62<\/td>\n<\/tr>\n
1976<\/td>\n9.89<\/td>\n<\/tr>\n
1977<\/td>\n10.42<\/td>\n<\/tr>\n
1978<\/td>\n11.07<\/td>\n<\/tr>\n
1979<\/td>\n10.84<\/td>\n<\/tr>\n
1980<\/td>\n11.42<\/td>\n<\/tr>\n
1981<\/td>\n11.79<\/td>\n<\/tr>\n
1982<\/td>\n11.06<\/td>\n<\/tr>\n
1983<\/td>\n10.38<\/td>\n<\/tr>\n
1984<\/td>\n10.25<\/td>\n<\/tr>\n
1985<\/td>\n10.34<\/td>\n<\/tr>\n
1986<\/td>\n10.48<\/td>\n<\/tr>\n
1987<\/td>\n8.9<\/td>\n<\/tr>\n
1988<\/td>\n9.3<\/td>\n<\/tr>\n
1989<\/td>\n9.36<\/td>\n<\/tr>\n
1990<\/td>\n9.33<\/td>\n<\/tr>\n
1991<\/td>\n9.3<\/td>\n<\/tr>\n
1992<\/td>\n9.18<\/td>\n<\/tr>\n
1993<\/td>\n9.18<\/td>\n<\/tr>\n
1994<\/td>\n9.17<\/td>\n<\/tr>\n
1995<\/td>\n9.28<\/td>\n<\/tr>\n
1996<\/td>\n9.33<\/td>\n<\/tr>\n
1997<\/td>\n9.32<\/td>\n<\/tr>\n
1998<\/td>\n7.98<\/td>\n<\/tr>\n
1999<\/td>\n7.88<\/td>\n<\/tr>\n
2000<\/td>\n8.02<\/td>\n<\/tr>\n
2001<\/td>\n6.71<\/td>\n<\/tr>\n
2002<\/td>\n6.53<\/td>\n<\/tr>\n
2003<\/td>\n5.34<\/td>\n<\/tr>\n
2004<\/td>\n5.38<\/td>\n<\/tr>\n
2005<\/td>\n5.69<\/td>\n<\/tr>\n
2006<\/td>\n5.85<\/td>\n<\/tr>\n
2007<\/td>\n5.91<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/p>\n

http:\/\/www.forbes.com\/2009\/04\/16\/tax-tea-party-opinions-columnists-protest.html<\/a><\/p>\n

In spite of this, the rich have certainly become much richer with Republicans than Democrats.\u00a0<\/p>\n

\u201cCensus Bureau data reveal large, consistent differences in patterns of real pre-tax income growth<\/strong><\/p>\n

under Democratic and Republican presidents in the post-war U.S. Democratic presidents have<\/strong><\/p>\n

produced slightly more income growth for poor families than for rich families, resulting in a<\/strong><\/p>\n

modest decrease in overall inequality. Republican presidents have produced a great deal more<\/strong><\/p>\n

income growth for rich families than for poor families, resulting in a substantial increase in<\/strong><\/p>\n

inequality. On average, families at the 95th percentile of the income distribution have<\/strong><\/p>\n

experienced identical income growth under Democratic and Republican presidents, while those<\/strong><\/p>\n

at the 20th percentile have experienced more than four times as much income growth under<\/strong><\/p>\n

Democrats as they have under Republicans. These differences are attributable to partisan<\/strong><\/p>\n

differences in unemployment (which has been 30 percent lower under Democratic presidents, on<\/strong><\/p>\n

average) and GDP growth (which has been 30 percent higher under Democratic presidents, on<\/strong><\/p>\n

average); both unemployment and GDP growth have much stronger effects on income growth at<\/strong><\/p>\n

the bottom of the income distribution than at the top. Similar partisan differences appear in the<\/strong><\/p>\n

distribution of post-tax income growth of households since 1980, despite the fact that the<\/strong><\/p>\n

corresponding pre-tax income growth data for that period show little evidence of partisan<\/strong><\/p>\n

differences.\u201d<\/strong><\/p>\n

http:\/\/www.russellsage.org\/publications\/workingpapers\/bartels\/document<\/a><\/p>\n

Another important point to be made here is about the tax burden or who is taking on more of the tax responsibilities under Republicans. \u00a0Check this out from 2004 to get an idea of what happened to the middle class during the Bush administration:<\/p>\n

\u201cSince 2001, President Bush’s tax cuts have shifted federal tax payments from the richest Americans to a wide swath of middle-class families, the Congressional Budget Office has found, a conclusion likely to roil the presidential election campaign.<\/strong><\/p>\n

The CBO study, due to be released today, found that the wealthiest 20 percent, whose incomes averaged $182,700 in 2001, saw their share of federal taxes drop from 64.4 percent of total tax payments in 2001 to 63.5 percent this year. The top 1 percent, earning $1.1 million, saw their share fall to 20.1 percent of the total, from 22.2 percent.\u201d<\/strong><\/p>\n

http:\/\/www.washingtonpost.com\/wp-dyn\/articles\/A61178-2004Aug12.html<\/a><\/p>\n

The 64.4%, 63.5%, 20.1% and 22.2%\u00a0quoted here are not marginal or effective tax rates.\u00a0 They are the percentage of total taxes these folks are shouldering.\u00a0 These values are also shown for 2006 and 2005 in the section of the CBO chart mentioned above under the heading of \u201cShare of Tax Liabilities\u201d.<\/p>\n

Here is another chart:<\/p>\n\n\n\n\n\n\n
Change in Real Family Income by Quintile and Top 5%, 1979-2005<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0Bottom 20%<\/td>\nSecond 20%<\/td>\nMiddle 20%<\/td>\nFourth 20%<\/td>\nTop 20%<\/td>\nTop 5%<\/td>\n<\/tr>\n
Less than $25,616<\/td>\n$25,616-$45,021<\/td>\n$45,021-$68,304<\/td>\n$68,304-$103,100<\/td>\nabove $103,100<\/td>\nabove $184,500<\/td>\n<\/tr>\n
-1%<\/td>\n9%<\/td>\n15%<\/td>\n25%<\/td>\n53%<\/td>\n81%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/p>\n

http:\/\/www.demos.org\/inequality\/numbers.cfm<\/a><\/p>\n

So, the point is that there are many groups that spend a lot of time and money making sure you act and think they way they want you to \u2013 even against your own interests.\u00a0 This is why so many are alarmed at the Supreme Court\u2019s decision to, in essence,\u00a0allow no campaign finance reform, the wealthy will have no limits on the money they can spend to manipulate you.\u00a0 My solution is to educate folks so no matter how many dollars are spent by the wealthy it will not be worth their time and money at the voting booth.\u00a0 Folks, we need to grow up and quit believing every spam we come across.\u00a0 Otherwise, history has shown time and time again that revolution will be the inevitable outcome and that has never worked out in most cases for the long run. \u00a0Here is what I think we, as the electorate, need to do:<\/p>\n

\u00a0-do the research<\/p>\n

-think about the vested interest of who is trying to convince you of something<\/p>\n

-vote wisely<\/p>\n

Do I have a vested interest?\u00a0 Did you pay for this?\u00a0 Are you going to pay for this?\u00a0 Read this post if you want to know my real interest:<\/p>\n

\u00a0http:\/\/mixermuse.com\/blog\/2010\/01\/19\/the-criminal-and-the-human-a-rational-approach-to-liberalism\/<\/a><\/p>\n

I am probably upper middle income with the best health insurance money can buy, federal government health insurance.\u00a0 My wife retired from the GAO.<\/p>\n

I am a small business owner.\u00a0 My business is doing well.<\/p>\n

I am liberal or left of liberal but I am also a believer in true conservatism defined as:<\/p>\n

-Taxes and government\u2026genuine conservation has the goal of conserving precious resources not for selfishly, perceived goals but for the good of society; so that suffering is addressed efficiently and effectively.<\/p>\n

-Military\u2026Non-intervention in other sovereign nation\u2019s affairs<\/p>\n

-Equality is constitutional (Abraham Lincoln)<\/p>\n

-Separation of church and state<\/p>\n

All these are the best of conservatism and have been lacking in the Republican Party in recent years.\u00a0 If I am wrong, show me. \u00a0I will change my mind (not saying it is easy but I have done so many times in the past).\u00a0 Otherwise, I will live, act and vote in the meager amount of integrity that I have been given.<\/p>\n","protected":false},"excerpt":{"rendered":"

Republicans, the home of many wealthy corporations and individuals, control public perception through the media.\u00a0 They are very good at it \u2013 much better than Democrats.\u00a0 Maybe the media is liberal if you listen to them but voters fall in line like zombies to their beckoning call.\u00a0 The Heritage Foundation, a very conservative \u201cthink tank\u201d […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[12,16,18],"tags":[79,130,169,240,189,211],"class_list":["post-249","post","type-post","status-publish","format-standard","hentry","category-myths-exposed","category-politics","category-republicans","tag-effective","tag-marginal","tag-poor","tag-republicans","tag-rich","tag-taxes"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.mixermuse.com\/blog\/wp-json\/wp\/v2\/posts\/249","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mixermuse.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mixermuse.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mixermuse.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mixermuse.com\/blog\/wp-json\/wp\/v2\/comments?post=249"}],"version-history":[{"count":2,"href":"https:\/\/www.mixermuse.com\/blog\/wp-json\/wp\/v2\/posts\/249\/revisions"}],"predecessor-version":[{"id":3391,"href":"https:\/\/www.mixermuse.com\/blog\/wp-json\/wp\/v2\/posts\/249\/revisions\/3391"}],"wp:attachment":[{"href":"https:\/\/www.mixermuse.com\/blog\/wp-json\/wp\/v2\/media?parent=249"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mixermuse.com\/blog\/wp-json\/wp\/v2\/categories?post=249"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mixermuse.com\/blog\/wp-json\/wp\/v2\/tags?post=249"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}