The Boston Globe
August 8, 2012 -- Are Americans eager for higher taxes on the affluent? Barack Obama and his allies clearly think so. The president who came to office vowing to "spread the wealth around" by raising taxes on individuals with incomes above $200,000 is doubling down, making a tax hike on the rich the centerpiece of his campaign for reelection.
"We should ask the wealthiest Americans to pay a little more," he urged a White House audience
last week. "We're talking about folks like me going back to the tax
rates that existed under Bill Clinton.… And here's the thing -- there
are a lot of well-to-do Americans, patriotic Americans, who understand
this and are willing to do the right thing, willing to do their part to
make this country strong." An Obama campaign ad
summarizing "President Obama's plan" drives the point home succinctly.
"Wealthy Pay More," the on-screen title says; "Middle Class Pays Less."
Meanwhile, the union-funded activist group Americans United for Change is out with a quarter-million-dollar ad blitz
denouncing Republicans who won't "make the richest 2% pay their fair
share in taxes." Adding to the class-warfare clamor is Senate Majority
Leader Harry Reid, with his preposterous accusation
that Mitt Romney "has not paid taxes for ten years," thanks to the
"many tricks" for avoiding taxes that "people who make as much money as
Mitt Romney have … at their disposal."
Few
things get liberal Democrats salivating like populist red meat. But if
voters generally shared the left's weakness for soak-the-rich nostrums,
Nancy Pelosi would be speaker of the House, the Occupy movement would be
riding high -- and Republicans would still wince at the memory of
Ronald Reagan losing the White House to Walter Mondale in a 49-state
landslide.
But voters, by and large, don't yearn to see the wealthy stripped bare by the tax collector. In a new nationwide poll,
Gallup asked Americans to rank a list of policy proposals for the next
president to address. Respondents gave highest priority to "creating
good jobs," "reducing corruption in federal government," "reducing the
federal budget deficit," "dealing with terrorism and other international
threats," and "ensuring the long-term stability of Social Security and
Medicaid." Raising taxes on the wealthy placed last. Even among Obama
supporters, no issue on Gallup's list was deemed less important.
Blasting the wealthy for not paying their "fair share" in taxes may rev up what Howard Dean called "the Democratic wing of the Democratic Party." But measured by any reasonable yardstick, rich Americans pay their fair share. And then some.
One
reasonable yardstick might be the average rate paid when all federal
taxes -- including not just income taxes but also payroll taxes -- are
considered. The Congressional Budget Office
reported last month that in 2009, the top 20 percent of taxpayers paid
an average of 23.2 percent of their income in federal taxes -- more than
double the 11.1 percent paid by the middle quintile, and 23 times the 1
percent paid by the lowest quintile. Even within the top 20 percent,
average tax rates rose with income: The richest 1 percent paid 28.9
percent of their earnings in federal taxes.
In
2009, more than 90% of individual income taxes were paid by just 20% of
Americans. When all federal taxes (including Medicare, Medicaid, and
Social Security taxes) are accounted for, the top 20% paid 68% of the
total.
Or
perhaps a more reasonable yardstick would compare the share of federal
taxes paid with the share of national income earned. The CBO ran those
numbers too. In 2009, the bottom 20 percent of taxpayers earned
approximately 5 percent of the nation's income but paid just 0.3 percent
of all federal taxes. Households in the middle quintile, which earned
almost 14.7 percent of national income, paid only 9.4 percent of federal
taxes. Yet Americans in the top quintile, who earned 51 percent of the
nation's income, paid a whopping 67.9 percent of all federal taxes. And
the much-demonized 1 percent? They took in 13.4 percent of all income
in 2009 -- and shelled out 28.9 percent of all federal taxes.
Reasonable
minds can debate whether income inequality is good, bad, or neutral;
whether "fair" tax rates should be flat or graduated; whether
income-redistribution is a legitimate function of government. But what's
clear is that wealthy Americans pay plenty -- far more than plenty --
in taxes. Maybe that's why voters aren't clamoring to make them pay even
more.
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