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Thursday, April 4, 2013

Tax time in America: it's the rich vs. poor (guest post)



It's them vs. us, folks:

"It's tax time, if you hadn't noticed, and regressives are once again fulminating about how Americans in the bottom half of the income ladder pay little or no income taxes while the top 1 percent accounts for over 25 percent of total income tax revenues. They're also talking about "tax reform" as a means of rectifying this.

Watch your wallets.

The truth is:

(1) The top 1 percent takes in over 20 percent of total income, so in a progressive tax system we'd expect them to pay at least 25 percent of total income tax revenues, if not far more. (

2) The bottom half pays far more in Social Security taxes, which are regressive (income above $113,700 is exempt), and which account for almost as large a share of federal revenues as federal income taxes.

(3) Sales taxes and user fees have soared in recent years, taking a far larger share of the paychecks of the middle class and the poor than they do of the very rich.

(4) A significant portion of the earnings of the wealthy aren't subjected to income taxes at all, but to capital gains taxes, which are substantially lower (which is why Mitt Romney pays some 13 percent of his $20 million a year earnings in taxes), and

(5) Tax-free benefits such as employer-provided health care and pensions have skyrocketed for those at the top, but low-income Americans receive little or none of these tax-free benefits. Add it all up and it turns out our tax system is regressive overall, taking a larger portion of the pay of lower-income Americans than of those with high incomes. The rich should be paying far more."

--Robert Reich, American political economist, professor, author, and political commentator

Links:

Robert Reich


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