WSJ: How to Soak the Rich (the GWB way)

[iheartskins]

COMMENTARY

http://online.wsj.com/article/SB114670305012743294.html?mod=opinion_main_commentaries

Supply Side

How to Soak the Rich (the George Bush Way)

By STEPHEN MOORE

May 4, 2006; Page A14

With the House and Senate preparing to vote on extending George W. Bush's investment tax cuts, it's no surprise the cries against "tax giveaways to the rich" grow increasingly shrill. Just yesterday Senate Minority Leader Harry Reid charged that the Bush tax plan "offers next to nothing to average Americans while giving away the store to multi-millionaires" and then fumed that it will "do much more for ExxonMobil board members than it will do for ExxonMobil customers."

Oh really. New IRS data released last month tell a very different story: In the aftermath of the Bush investment tax cuts, the federal income tax burden has substantially shifted onto the backs of the wealthy. Between 2002 and 2004, tax payments by those with adjusted gross incomes (AGI) of more than $200,000 a year, which is roughly 3% of taxpayers, increased by 19.4% -- more than double the 9.3% increase for all other taxpayers.

Between 2001 and 2004 (the most recent data), the percentage of federal income taxes paid by those with $200,000 incomes and above has risen to 46.6% from 40.5%. In other words, out of every 100 Americans, the wealthiest three are now paying close to the same amount in taxes as the other 97 combined. The richest income group pays a larger share of the tax burden than at anytime in the last 30 years with the exception of the late 1990s -- right before the artificially inflated high tech bubble burst.

Millionaires paid more, too. The tax share paid by Americans with an income above $1 million a year rose to 17.8% in 2003 from 16.9% in 2002, the year before the capital gains and dividend tax cuts.

The most astounding result from the IRS data is the deluge of revenues from the very taxes that were cut in 2003: capital gains and dividends. As shown in the nearby chart, capital gains receipts from 2002-04 have climbed by 79% after the reduction in the tax rate from 20% to 15%. Dividend tax receipts are up 35% from 2002 to 2004, even though the taxable rate fell from 39.6% to 15%. This is as clear evidence of a Laffer Curve effect as one will find: Lower rates produced increased revenues.

Click link for the rest of the article.

WSJ.com is free this week, so the link should work.

[Prosperity]

yes, but is this because the wealthiest Americans are also becoming more wealthy a lot faster relative to the rest of the population? This is such a simple topic how can you leave out one side? I mean is it so incredibly hard to point out both that the rich are paying mroe relative to the rest of the country, but also that they are making more in relation to others now, and their equivalents of the past?

[DCsportsfan53]

Where's the link?

[DeanCollins]

$200,000 annual is not that much money these days, especially in large metro areas. The average combined incomes (of the married) in Fairfax county, Va probably exceed $200k. King George and company don't care about that braket. It's the $500,000 and up crowd that are getting the biggest breaks

[stevenaa]

yes, but is this because the wealthiest Americans are also becoming more wealthy a lot faster relative to the rest of the population? This is such a simple topic how can you leave out one side? I mean is it so incredibly hard to point out both that the rich are paying mroe relative to the rest of the country, but also that they are making more in relation to others now, and their equivalents of the past?

The percentage increased, an increase in income doesn't affect the percentage. It just increases the total amount paid. The percentage went up over previous years.

Great article, Iheart

[stevenaa]

$200,000 annual is not that much money these days, especially in large metro areas. The average combined incomes (of the married) in Fairfax county, Va probably exceed $200k. King George and company don't care about that braket. It's the $500,000 and up crowd that are getting the biggest breaks

The percentage increased for millionaires as well.

[DCsportsfan53]

$200,000 annual is not that much money these days, especially in large metro areas. The average combined incomes (of the married) in Fairfax county, Va probably exceed $200k. King George and company don't care about that braket. It's the $500,000 and up crowd that are getting the biggest breaks

Indeed, them and the corporations. I have no problem with tax cuts, believe me, it's just that it seems whenever a Republican does one (especially this president) it doesn't go to the people who deserve it. We get token gestures such as the $300 check from a few years ago while the rich and corporations save billions. That's the whole problem with the conservative tax cuts, for me, they're always ending up in the back pockets of those who are already filthly rich, they don't really give a **** about middle class americans.

[gchwood]

Indeed, them and the corporations. I have no problem with tax cuts, believe me, it's just that it seems whenever a Republican does one (especially this president) it doesn't go to the people who deserve it. We get token gestures such as the $300 check from a few years ago while the rich and corporations save billions. That's the whole problem with the conservative tax cuts, for me, they're always ending up in the back pockets of those who are already filthly rich, they don't really give a **** about middle class americans.

Don't the people that pay the most taxes deserve the most breaks? would seem silly if we gave more breaks to those who paid the least taxes thus increasing the load on those who already sholder the majority of the load. That being said if we document these workers we will have 10 million more workers to tax, thus truely allowing us to give tax breaks to everyone

[GrimReefa]

The percentage increased, an increase in income doesn't affect the percentage. It just increases the total amount paid. The percentage went up over previous years.

Great article, Iheart

It DOES increase the percentage.

If the poor have less money, they pay less in income taxes. Meanwhile, the rich have more money, so they're paying more in income taxes.

Therefore, the % of money the poor is paying is going down, while the % the rich pay is going up.

The article didn't say the rich were paying a higer % of income - it said they were paying an increasing share of the "tax burden".

The Wall St Journal article is misleading, as is anything you'll find in the op-ed section of that paper.

[GrimReefa]

Don't the people that pay the most taxes deserve the most breaks? would seem silly if we gave more breaks to those who paid the least taxes thus increasing the load on those who already sholder the majority of the load. That being said if we document these workers we will have 10 million more workers to tax, thus truely allowing us to give tax breaks to everyone

The people who poay the most in taxes have the most money. They are shouldering the load because they have the resources with which to shoulder it.

You see that guy who gave himself a 400 million dollar severance package from Exxon at the same time we're filling up at 3.00 a gallon? You really think HE is the one who needs a break???

These fat cats have got you convinced that there being crushed by this tax burden, meanwhikle they're walking around with more money than you or I could even ponder.

What has you feeling sorry for these people?

[DCsportsfan53]

Don't the people that pay the most taxes deserve the most breaks? would seem silly if we gave more breaks to those who paid the least taxes thus increasing the load on those who already sholder the majority of the load. That being said if we document these workers we will have 10 million more workers to tax, thus truely allowing us to give tax breaks to everyone

Ummmm.....no, not at all. 5% of this country owns 95% of the wealth. They get the most out of this country and I don't feel sorry for anyone who whines that he only made 40 mil this year instead of 55 mil because of his huge tax "burden". The oil companies are turning in record profits, ex-ceos getting 400 million dollar severance packages while I pay $3.30 a gallon at the pump, **** no do I feel sorry for that guy. I just don't understand the greed of those people. They can never have enough, they can never take enough and their always, always paying too much to support others. Boo-freakin-hoo, I would love to have the problems that an oil executive has.

[PleaseBlitz]

I just dont understand why people are up in arms about a tax cut for people investing their money back into OUR economy. That helps EVERYONE.

[chomerics]

Liberty was pretty much spot on in the first post in this thread. It is very convienient how he uses numbers skewed to one side without showing the entire story, astonishing that this editorial is passed off as journalism today. . .

As for the Laffer curve working? :laugh: Take a look inside the numbers, look at government growth, economic growth, and look at tax revenues. This is a completely lame attempt to make the dooh nibor politicians good, and make no bones about it, the person writing this article is in the top income bracket, so of course he has an added incentive to dupe the rest of the public. . .

[chomerics]

I just dont understand why people are up in arms about a tax cut for people investing their money back into OUR economy. That helps EVERYONE.

No it does not, if the money is given to the top income earners, the money just goes back into the stock market, and into rich CEOs hands, which shows how some chairmen get $400+ million dollars at retirement.

If you want it to benifit everyone, you give the benifits to the middle class, because they are the consumers, and they will spend the money in places that benifit ALL Americans. That's why "trickle down" economics does not work, it doesn't "trickle down". All the middle class get is dust, while the upper crust get fillets.

[gchwood]

The people who poay the most in taxes have the most money. They are shouldering the load because they have the resources with which to shoulder it.

You see that guy who gave himself a 400 million dollar severance package from Exxon at the same time we're filling up at 3.00 a gallon? You really think HE is the one who needs a break???

These fat cats have got you convinced that there being crushed by this tax burden, meanwhikle they're walking around with more money than you or I could even ponder.

What has you feeling sorry for these people?

first it was only 97 million :doh:

Second most of these people did work to earn their money, my grandfather is worth over $100 million dollars (he currently owns 2000 acres in PW county and 45 houses through out NOVA) and my stepfather is worth more than 20 million, I have seen these men toil to make their money, going through some very very bad times, now they are blessed, Why should they pay more taxes to support social programs for people who don't work?

[PleaseBlitz]

The most astounding result from the IRS data is the deluge of revenues from the very taxes that were cut in 2003: capital gains and dividends. As shown in the nearby chart, capital gains receipts from 2002-04 have climbed by 79% after the reduction in the tax rate from 20% to 15%. Dividend tax receipts are up 35% from 2002 to 2004, even though the taxable rate fell from 39.6% to 15%. This is as clear evidence of a Laffer Curve effect as one will find: Lower rates produced increased revenues.

No it does not, if the money is given to the top income earners, the money just goes back into the stock market, and into rich CEOs hands, which shows how some chairmen get $400+ million dollars at retirement.

If you want it to benifit everyone, you give the benifits to the middle class, because they are the consumers, and they will spend the money in places that benifit ALL Americans. That's why "trickle down" economics does not work, it doesn't "trickle down". All the middle class get is dust, while the upper crust get fillets.

Do you own a house? I do. Any investments? Mutual Funds? Stock? I do.

A tax on capital gains was stupid in the first place. They taxed me on money I earned on investments that I bought with money I had ALREADY been taxed on.

But thats cool, you look out for the have-nots and keep your high moral ground. Im going to look out for myself. Im not going to *****, im going to try to get rich.

[Destino]

The percentage increased, an increase in income doesn't affect the percentage. It just increases the total amount paid. The percentage went up over previous years.

Great article, Iheart

That isn't true. If income levels greatly increase at the top the real amount of taxes paid by that level increases and the total percent paid overall increases as well.

[Major Harris]

im going to try to get rich.

or die tryin', right, pb? :high5:

[PleaseBlitz]

or die tryin', right, pb? :high5:

Or end up wasting all my time on this goddamn site. :doh:

Alright, time to hit the phones.

[G-Prime]

I see a lot of grumbling about the article, but I'm not seeing any facts about why it's wrong. Just speculation

[HOF44]

The real number I'd like to see is actual percentage of income paid as tax. In other words the effective tax rates.

[chomerics]

Do you own a house? I do. Any investments? Mutual Funds? Stock? I do.

A tax on capital gains was stupid in the first place. They taxed me on money I earned on investments that I bought with money I had ALREADY been taxed on.

Get real, capitol gains tax is money that is made on INVESTING, and it is taxed at 15%!!! It is at a LOWER tax rate then a person making $20K a year. Tell me again why some fat cat can sell a piece of paper and pay LESS in taxes then someone who works 80 hours a week for a living, because I would like to know the answer. Again, if you sold your house for PROFIT, you have to pay a capitol gains tax, you were not "already taxed on that money".

When you invest, and you make a PROFIT, you have to pay taxes, and the tax rate is LOWER then someone working 3 jobs, at minimum wage. . .fair? I think not!!! Just because you have the money to invest does not give you the right NOT to pay taxes, which is what you are advocating.

I used to own a house, and yes, I know the difference on taxable income, and how paying for intrest allows you to deduct a LOT of your income for taxes. It was the difference in me receiving back over $6k to getting back $1.5K.

But thats cool, you look out for the have-nots and keep your high moral ground. Im going to look out for myself. Im not going to *****, im going to try to get rich.

Good for you, but just because you play the game doesn't mean the rules are set up for everyone to benifit. Just wait until; you pay an AMT tax, then tell me that they are looking out for everyone :doh:

[SkinsHokieFan]

Good article there, had plenty of good information

The money floods down to the middle class, I have hated the term trickle down forever

And why people can't see it is beyond me. Since the 2003 dividend tax cut, the economy has flourished, unemployment is down, and people are making money

The middle class does and has recieved tax cuts along with the top 1 percent. People somehow conviently forget that concept. Until we are handing out welfare checks of 2,000 dollars a month to anyone making less then 30,000 a year, liberals will never be happy.

With more cash in my hands, my business has continued to grow, as has the amount I can save in my IRA so I am not relying on the government to pay for my ass in the future. Also just the amount of "stuff" I can get has gone up and money I have made off of investments off money I was taxed on in the first place, as PB said

The capital gains tax may be the dumbest thing ever. I was taxed on the income already I used to purchase land, and then taxed again on what I sold it for? Nonsense

Good move again, now these things need to be made really permanent, beyond January 1st of 2011. Another good move would be to reduce the payroll taxes taken out of our checks, but that requires SSI reform, and clearly nobody has the balls to do that in Congress or in the WH

And to add on to Chom's post, yes the AMT needs major changes to it, i.e get rid of the damn thing

Or, scrap the income tax totally and change the system, and watch the economy soar. But we have to continue to play tax warfare in this country and hold back our progress

[Midnight Judges]

The real number I'd like to see is actual percentage of income paid as tax. In other words the effective tax rates.

Theresa Heinz Kerry pays 12% income tax and she is a billionaire. Anybody who thinks every other billionaire doesn't take advantage of all the loopholes she does is kidding themselves.

[chomerics]

The real number I'd like to see is actual percentage of income paid as tax. In other words the effective tax rates.

They don't want to show you that, because the effective tax rate is DECREASING for the top. In other words, he picked statistics to try and paint a picture that the top is taxed "so much" when in effect, the % they are paying is decreasing, and the % the low income earners is increasing. I'll try to dig up the statistice for you, because that one statistice blows holes right therough the middle of this article.