By Doug Ford
10/18/2010
As we approach the expiration date at the end of the year for the worst of the Bush Administration tax cuts for the rich, the misinformation mills are operating at full blast.
An enormous amount of money is being spent to try to convince us that the rich pay more than their share in taxes while we lazy folks down below reap all the benefits. They would have us extend the tax benefits that have produced the greatest redistribution of income and concentration of wealth in our history
But investigative reporter David Cay Johnston provides some facts that tell the real story in "Tax Rates for Top 400 Earners Fall as Income Soars, IRS Data," available at TAX.com. In his chart summarizing IRS data from 1992 to 2007, he shows that in 2001, the 400 highest income Americans had an average income of $158,812,000 on which they paid an effective tax rate of 22.85 percent. In the same year, the average gross income for the bottom 90 percent of Americans was $34,000.
Six years later, in 2007 after the Bush tax cuts, the average income of the top 400 had more than doubled to $356,722,000, but their effective tax rate had been cut to 16.62 percent. In the same six years, the average gross income of the bottom 90 percent had decreased to $33,546. While the lower 90 percent enjoyed a very modest reduction in their income taxes over the period, Social Security, Medicare and unemployment taxes combined, added up to more than their income taxes, so they
paid a much larger proportion of their income to the federal government than did the 400 highest income Americans, who pay only a tiny fraction of their income for these other taxes.
One result of the Bush tax policies was the near collapse of our entire economic system in 2008. To continue the current tax system, that so greatly benefits the ultra-wealthy at the expense of the rest of us, would ensure the breakdown of our economy and could produce the darkest times ever in world history -- even worse than the wars and revolutions of the past century.
Our tax picture in California is similarly hazardous to our economic health. According to Robert S. McIntyre of the Citizens for Tax Justice in a presentation to the California Commission on the 21st Century Economy Regarding Tax Fairness and Economic Growth, the lowest income 20 percent of Californians pay 11.1 percent of their income in state taxes while the top 1 percent pay only 7.8 percent (after federal tax offsets).
Most of the Republicans that I know of, who are running for state and federal offices in the coming election, would have us continue or accelerate our movement down the road to disaster. Although I was a Republican for more than 35 years, I'll be voting for Democrats this year.
The author is retired from the U.S. Air Force, lives in Dixon and serves on the Solano County Board of Education.