Yes, There’s Real Money at the Top
http://www.offthechartsblog.org/yes-there%e2%80%99s-real-money-at-the-top/
Posted by: Chuck Marr
Posted in: 2001/2003 Tax Cuts, Congressional Action, Deficits and Projections, Federal Budget, Federal Tax, Individuals and Families, Recession and Recovery, Taxes and the Economy
When billionaire investor Warren Buffet recently called on policymakers to “get serious about shared sacrifice” by raising taxes on the nation’s wealthiest people, some critics claimed that this wouldn’t make a serious dent in our budget problems. Nonsense.
IRS data show that the top 1 percent of taxpayers had a combined income of $1.7 trillion in 2008, the most recent year available. This is fully 20 percent of the nation’s total adjusted gross income — and much more than the bottom half of the population had (around 13 percent).
Moreover, the tax burden at the top of the income scale has fallen dramatically in recent decades. IRS data show that the top 1 percent of taxpayers paid an average of about 23 percent of their income in federal income taxes in 2008. That’s far below what they paid prior to the Bush tax cuts, and about a third less than they paid back in 1980 (see graph).
Returning the average tax rate on the top 1 percent of taxpayers to its 1996 level of 29 percent could raise about $100 billion a year, or $1 trillion over the next decade.
By itself, of course, that wouldn’t solve the country’s long-term fiscal problems. Spending restraint, particularly in the health area, will also be needed, and taxes on other Americans will have to go up as well. But $1 trillion over ten years is real money and would make a real dent in the deficit.
More About Chuck Marr
Chuck Marr is the Director of Federal Tax Policy at the Center on Budget and Policy Priorities.
Full bio | Blog Archive | Research archive at CBPP.org
“Spending restraint, particularly in the health area, will also be needed, and taxes on other Americans will have to go up as well.”
If by spending restraint one means regulate fraud and abuse, that goes without saying and surely applies to all spending. However, if one means some autocratic, discriminatory, undemocratic messing with America’s healthcare industry, all bets are off. Many Americans want what we want and are willing to pay fair taxes to get it…and we will vote for those who will help us.
I have deep gratitude for Mr Marr’s work. It’s due to men like him that give the middle class a fighting chance in this country. Yet I find myself in a quandary over how the Republicans get away with referring to taxes as something evil. When will the Democrats present a sensible message campaign to ignite the portion of society most likely to benefit from renunciation of the ‘Tax Curtain’fraud the GOP hides behind? Take away the tax myth and they’re dead in the water.
Warren Buffett really started the ball rolling & he had about 40 wealthy people agree with him. Pres Franklin Roosevelt knew the problems in World War II, so he taxed as high as 90% on the wealthy to pay for the war. The problem nowadays is, we can’t run our economy with only the middle class carrying the load, while the richest 2% just sit back and keep BUYING OFF POLITICIANS, to keep their individual federal income taxes at a low rate, so they can keep racking up higher profits.
LaVern Isely, Overtaxed Independent Middle Class Taxpayer & Public Citizen & AARP Members
Returning the average tax rate on the top 1 percent of taxpayers to its 1996 level of 29 percent could raise about $100 billion a year, or $1 trillion over the next decade.
Hi Chuck,
How much would tax rates need to rise on the bottom half of income earners to generate that $100 billion?
Steve
Short but perhaps as informative as anything I’ve seen on the deficit debate. Your conclusion should be prominent on the walls of every Congressman:
“By itself, of course, that wouldn’t solve the country’s long-term fiscal problems. Spending restraint, particularly in the health area, will also be needed, and taxes on other Americans will have to go up as well. But $1 trillion over ten years is real money and would make a real dent in the deficit.”
Precisely!
Might we not also eliminate the cap on payroll taxes? Or institute the long-overdue tax on financial transactions? Both of these follow directly from Buffet’s observation that nobody has refused to invest because of taxes, and yet the take from investing is favored over working.