Thursday, July 10, 2008

Tax Cuts for the Rich

Here are the new figures on the distribution of income taxes for 2007. Ever wonder why Republicans continue to propose "tax cuts for the rich?" Maybe it's because they are the only ones paying taxes.

In case you can't read the graph, the top 1% pay 39% of all income taxes, 2%-5% pay 20%, 6%-10% pay 11%, 11%-25% pay 16%, 26%-50% pay 11% and the bottom 50% pay just 3%. The top 50% pay 97% of income taxes! What is there to stop the majority who pay little in income tax from voting to increase taxes on those making more? Politicians then use that money to transfer it to the bottom 50%, effectively paying them for their votes.

Whenever the media talks about tax cuts they show how much top earners save compared to the pittance received by the low earners, but they never show how much those people pay to begin with. Bush's tax cuts reduced the middle fifth's effective tax rate from 5% to 2.9%. They got a much larger percentage cut than the richer tax payers, but the total amount saved was much smaller.

Bottom line: to cut taxes, you have to cut taxes for the rich (who provide almost all the jobs, by the way) or you won't have much of a tax cut.

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