While I fully agree about the lack of wisdom in increasing taxes on the top earners, we have to be honest and admit that the poor pay other, regressive taxes besides the income tax. The excess of revenue over current Social Security disbursements does flow into the general Treasury for example. Sales taxes on the state level and federal excise taxes are also relatively regressive.

The overall tax payments by income class is much more complicated than commonly presented. The general theme of "don't overtax the rich" is still supported but the statistics we proclaim about income taxes is not the whole story.

The problem is, how do we put the whole story out in a succinct blog posting?

Wax Dummy?

Luddite.

I automatically assumed Photoshop.

I'll go register right away.
================================

OT: Here's a fun bit from a screaming Lefty - a list of Superheroes and who they'd vote for!

Stop on over to Zeke's place and set him straight...

- MuscleDaddy

Joe the Plumber 250,000 fantasy tax: Now there's something every wall streeter hopes McCain can sell between now and election day to save their collective socialist "I'll take the money from the govt." _____es from the fire
Well, I've got some news for those who feel Joe's been picked on for having his dreams taxed: Wall Street Repubs(Please, don't tell me Dems Unionist sympathisers were running the street.) have mnanaged to wipe out a third of my property value, a substantial portion of many friends 401 K retirememnt funds, and turned George Bush into a socialist on a scale Stalin and Lenin could only dream of. How have they doen for Joe?
While it is arguable lax GOVERNMENT! regulation of Fannie Mae and Freddie Mac allowed Wall Street access to money that shouldn't have been used the way the it was, the point is that, contrary to the views of repubs, held by the editors of this blog, the principal market actors that brought the house down could not resist temptation.
Wall Streeters, given access to the money, failed to use it in a way that would best protect their assets, both personal and corporate, from the ruin that has come upon them. Nobody FORCED! them to take it. They could have refused, for their own long term good, and the good of their clients.
Recent e-mails dug up by Congressional investigators looking at ratings company "Moodys" include the following e mail commments from employees in 2006 "We sold our soul for pay." refering to to the giving creditworthy ratings for "dubiously valued" mortgage backed securities. and "Let's hope we're all retired, and wealthy when this house of cards falters."
Mr. Whittle has written about a time when CEO's will be lauded as heroes, leaving considerable wealth in the wake of their personal fortune building.
Sorry, Mr. Whittle, that time is not now. Whatever fortunes they have helped others build have recently come tumbling down, while they get multimiliion dollar retirement packages for their billion dollar failures.
More important to Mr. Whittles critique of captalism is the failure of the markets principal actors to restrain themselves when offered the easy money by Freddie Mac, and Fannie Mae. actors.
But that's only one side of Mr. Whittles erroneous critique of capitalism American style that contributed to the casino economy that has recently come tumbling to the ground.
The other is the fantasy, fostered by the repubs, that everyone will be making 250,000 dollars or more. Joe won't make that kind of money...ever.
Most people never, in the headiest days of the bull market in stocks and real estate, were never making that kind of money. There's a difference between having assets valued at a certain price, and having that much cash. There's a difference between making that kind of money, and being able to obtain a loan, no matter how reasonable the rate. I'm not sure Mr. Whittle has a firm grasp of that fact. His Wall Street CEO's that he wanted to laud as heroes certainly didn't.
Joe the plumber never even got close. I've gotten closer than he'll ever hope to get, even if the RNC decides to give him the 150,000 they gave to dress up Sarah palin and her family.
We've got to stop living in a fantasy world of 250,000 INCOMES! being accessible to everyone. They aren't.
Failing that, marketing asset values, and cheap loans they were once able to afford many as incomes has also failed...miserably. The repub fantasy is dying right in front of you.
When Warren Buffet says it's a shame that he pays less, as a percentage of his income, than his secretary who makes 60,000 a year, what he's really saying is, "You people are dumb enough to offer me the money, I'll be smart enough to take it."
The repub experiment in giving the Wealthy access to trillions in hopes that they use it responsibly has failed. The wealthy in this country have no one to blame but themselves. And just as the wealthy haven't been able to protect their grossly overvalued assets from the devaluation from the market forces that have overtaken them, they haven't been able to protect the political value of their patron, John McCain.
Look forward to your responses.

"We've got to stop living in a fantasy world of 250,000 INCOMES! being accessible to everyone. They aren't."

Oh! Well then - I'll just have to close up my side-business, take a pay cut @ the day-job & quit that damnable "inching" toward the $250K-mark like I've been doing!

Then I'll just sit back and wait for the Obama administration to swoop in and take care of me...

...since the futility of dedication, inspiration and hard-work are just a matter of proven, concrete reality and all.

hmmm...

(dare I say it...well, of course I do...)

"BLLEEAARRGHH!!!"

- MuscleDaddy

Muscledaddy,

Your inching toward the 250,000 has not been helped by the Wall Street repubs. While you may hit that income level, most of us won't.
I've doing well, don't get me wrong, but 250,000 income is something I will never realize in my life, and if I do, I doubt that any job that nets me that kind of income will be done soley for the pay. And if it is, then what, exactly, am I being paid for? Taking milion dolar golden parachutes for multi billion dollar failures.
These people have accountability cushions any politician would envy.
Most Americans haven't had to live soley on their incomes and savings since the Reagan era. Now, they'll have to. Thirty years of no income growth is going to hurt.
Nobodies going to swoop down and save you. Not Obama. Nor wil the socialist conservatives lead by Bush/McCain who believe anyone intheir income bracket is too big to fail or be taxed.
Finally, if the wealthy want their position of leadership back in this society, their going to have to forego golden parachutes for their failures. I doubt
that they will let go of their entitlement programs anymore than any other welfare queen.
And they have no one blame but themselves for their problems.

Trying to substitute aset values for income and savings has proven a miserable failure.

Just Another Rufus,
"Nobody FORCED! them to take it."
As a matter of fact they (Congress) did.
By Federal mandate, banks that did not approve a percentage of "at risk" loans were subject to penalty. Those loans were bought by Fannie and Freddy and sold to investors "with the full faith and credit" of the US government.
Then, when there was a call for oversite, it was called racism, classism, another ism.
I don't disagree that D.C. is inbred and, like all inbreeding, has led to genetic defects. I disagree with the notion that the cure is to take from the healthy (those that have succeeded) and give to the unhealthy (those that have not).
I'm still miles away from making 250k a year. But, do you know what they call those people?
They call those people, "Boss"
Those are the people that hire other people and for every 1% you raise their taxes count another 100,000 positions they won't hire.
It really is very simple. Corporations don't pay taxes: People do.

Oh, GHS! Clean up on aisle 5.

Great commentary.

But ~ I miss the long essays that took a season or two to gestate...

Love you man!

Obama's "tax cuts" are going to cause people to lose more money, not make more money.... and the unemployment rate to rise higher than it's ever been before! His left wing illuminati thoughts are going to get this country into trouble!

The commentary was good, but incomplete. Just saying that the top 1% of taxpayers paid 40% of the taxes isn't enough--the automatic rebuttal (which we will no doubt hear) is that they made all the money, so of course they paid all the taxes.

In fact, the top 1% of earners made 22% of the income but paid 40% of the taxes. The top 50% of earners made 87.5% of the income and paid 97% of the taxes, while the bottom 50% made 12.5% of the income and paid only 3% of the taxes.

http://www.taxfoundation.org/taxdata/show/250.html

But that's not all. According to the Congressional Budget office, in 2005 the bottom 40% of earners actually paid NEGATIVE federal taxes, meaning they got all the money they paid into taxes back, plus extra. This is thanks to the lower tax rate and the variety of credits available to low income earners. The bottom 20% of earners paid -2.9% in taxes, and the next 20% paid -0.9% in taxes.
Effectively, a huge chunk of the American wageearning population is not paying ANY federal taxes.
And they want to raise taxes on the "wealthy"? Bill's right, if these guys have finally had enough and take themselves elsewhere, the country is screwed.

http://www.atr.org/content/pdf/2008/August/081408ot-federalincometaxandwhattheypay.pdf.

So what about the 1.7 million Households that make more than 250,000 in the US?

Daddyquatro,

Who are you kidding? Wells Fargo, and many other smaller regional banks avoided exposure to subprime mortgages mess.
How do you explain their refusal to participate in the activities that lead up to this mess? How do you explain why many people were talked into more expensive loans they couldn't afford when less expensive loans were available to the same customers. Lenders got themselves into this mess.
Were "Moodys" and the other rating agencies forced to inflate the value of mortgage backed securities they knew were worthless?
And, of course with the likes of Rush shouting "racism" from the rooftops over Powells endorsement of Obama, when, daady, have Wall Streeters socialist conservatives ever
been afraid of being called racist? The only thing any socilaist conservative defended here is worried about is not having a steady stream of OPM (Other Peoples Money) to spnge off of.
Don't try to defend or minimize the part Wall Street the part Wall Street Repubs played in this mess.
They may pay 40% of all taxes, but that's only because they've managed to work out an economy where the bottom 3/4 of the populatiobn has seen no real job income increase since Reagan took office.
However, at the same time, it must be noted the total tax burden has been eased with the Bush tax cuts. The wealthy in this country aren't suffering. Not from taxes anyway.
Clearly, leaving them with that money has not helped the middle class which has lost property value, and pension value due to the activities of these oner percenters who recieve million dollar golden parachutes for their billion dollar failures.
These people are not heroes, nor are they ever likely to help you ever to help you realize 250,000 a year income.
Most Americans understand this. That's why McCains value as a candidate is dimishining by the day.
Best of luck.

Chris,

So what about them. How has their wealth building helped "Joe the Plumber", you, or the 75 million households that will never realize 250,000 incomes?
They aren't industrialists, adiing value to raw materials. Their financiers, using OPM to make feather their own nests, sometimes knowingly, at the expense of the borrowers and 401 K holders who expect these people know what they're talking about.
They wanted the leadership position in our society their money afforded them. Now, they'll have to pay, literally, for their failure as individuals and as a class.
Best of Luck.

Bill said:
"And that’s up from thirty four percent in 2002, so they are not getting tax breaks, they are actually paying more now than they did when Bush took office."
They could be paying a smaller percent individually and at the same time a larger percent collectively, though, if tax rates were cut for everyone, but more for the higher payers. So I think your statement was a bit unclear.

Great post!

Would you like a Link Exchange with our new blog COMMON CENTS where we blog about the issues of the day?

http://www.commoncts.blogspot.com

Whittle!, and others, there's something a'brewin' and we need your help.

If you consider yourself, a 'Remnant,' you'll roll up your sleeves and jump in gladly.

http://littlegreenfootballs.com/showc/99/6094124

Thanks,

Noam

Noam, I'm sayin' that I love me some Zombie... nearly as much as I love me some Whittle. And I think, in legitimate, registered, honestly cast votes, the polls are wrong to the point of 56-42 McCain... because America is not gonna put this racist, socialist douchebag in the White House.

But then I wonder about ACORN... and the military votes being suppressed in Virginia. Tens of Millions in illegal campaign contributions. And the media, complicit and in the tank to a degree never possibly even *imagined* before... the Dems this time have raised their nefarious art to a level unheard of, and I wonder...

What can we do in the face of such coordinated, desperate fraud...? Really; I want to know what I can do,and like Bill, I am deep in the heart of Blueness (although being in the OC, the lovely tinge of Red gives me momentary comfort). Where do we go from here...? And although I think The One will still be making that concession speech, what happens if his fraud and deceit is enough to carry the day?

Well, hindmost, it's about the people who could do something; the people who could make a difference, no matter how small.

There was a time when a small man, a former leader of a now very productive nation, decided that an area of land rightfully belonged to their country. He decided to move a contingent of soldiers there - just to test the waters. His cohorts agreed amongst themselves that if the neighboring country defended that land, they'd remove him from his position. The neighboring country didn't, so they didn't.

Small gestures can still large outcomes, and relieve the world of unbelievable torment.

Because small gestures are sometimes not expended - because they are small gestures - the result can be an incredible interruption of love and faith and creativity and humanity, not to mention the destruction of centuries of love and faith and creativity and humanity.

There's a reason you're here, hindmost. You're a Remnant.

Follow the link, read on.

There are no small ideas.

Sorry, Bill - much as I love you, you still look like Mr Tracy.

Don't try to defend or minimize the part Wall Street the part Wall Street Repubs played in this mess.

This is actually a common situation in heavily-regulated industries. The people who work in those sectors have a powerful incentive to pay protection money. Over time, they often come to regulate their regulators ("regulatory capture"). Once this has been achieved, they can use the power of the regulators to deny entry to potential competitors, rather than facing them in a free market.

You say that the liquidity crisis was caused by "deregulation"? Quelle simplisme! I can see a couple of points where regulations that were on the books simply were not enforced (like naked shorts), but the nuanced truth includes far more:
1) The CRA provisions that forced banks to make risky loans
2) The willingness of Fan/Fred to buy up those loans and repackage them as arcane securities implicitly backed by the USGOV
3) Outright fraud at those same quasi-governmental entities
4) The Fed pumping money into the economy in order to stimulate it (rather than keeping the value of the dollar stable) then soaking up money in open market activities
5) The Mark-to-market accounting rule that forced companies that had invested in the esoteric instruments to drastically reduce their book value, even when the underlying mortgages were still being paid on schedule
6) Whenever the Bush Administration or Congressional Republicans tried to rein in Fan/Fred (run by "Wall Street Democrats") their defenders, like Barney Frank and black members of his committee, played The Race Card, claiming that Franklin Raines was being lynched. The mere suggestion of "racism" caused enough Republicans to back off, so that with the Democrats voting as a solid block, nothing was done.

As is usually the case, the "free market" gets the blame when most of the causes are directly traceable to government actions, or to nominally private entities that are well connected to government, and receive from it special treatment. In this situation, many bad regulations were involved.

The most important regulations in the financial sector are those that protect investors from fraud. Investors who know they are buying high risk securities will want to diversify that risk, and expect higher returns from those that pay off, to compensate for those that lose value. And all the players will benefit when the value of the dollar is stable, reducing a major element of the uncertainty inherent in all long-term financial decisions.

Exactly, Monster. Big buisiness doesn't hate regulations, small or aspiring buisinesses do.

He, nor we should have to share our wealth. These socialist illuminati need to go elsewhere with this thinking, because it's not the right policy.

Your discussion of who is paying the most in taxes conveniently leaves out the fact that the total income of the top 1% has INCREASED, and the tax rate on those high-income individuals has actually DECREASED since 20 years ago. Additionally, part of their income has come from substantial returns on investments, which are taxed at a LOWER rate than salary income. One could argue that since this group has received the lion's share of benefits from our society, they should pay the lion's share of the costs. I see no disconnect here. By the way, Joe the Pumber would benefit MORE from Obama's tax policies.

The media is so one-sided towards Obama.... they conveniently forget to "follow the money" of the Obama Campaign...... Are Hugo Chavez and Iran contributors?

This all comes down to > When you tax Peter to pay Paul. Paul will always vote for you!

Just Another Taxpayer;

I may be wrong, but I believe Wells Fargo is a credit union, and therefore, works by slightly different rules than banks. In fact, to my knowledge, the nation's credit unions are all doing just fine right now. That's right folks, credit is just as available now as in the past, just not from the banks.

I haven't been in here in a looooooooooong time, so, regardless of if you all remember me or not, I'd just like to say, "Hey, how's it hanging?"

Nice to see you back
G dot W dot C dot
Join us in The Lounge some evening.
We're throwing an election watch party.
Virtual beer is on the house!

D4

You know, when you put it like that, I kinda sound like an amalgamation of the Georgia, Washington, and Colorado Departments of Transportation. LOL.

Matthew et al,

Wells Fargo is no Credit Union. It's a commercial bank, working under the same rules as B of A.
They simply elected not to take Fannie Mae or Freddie Macs money or offer no doc, nothing down, ARM's to anyone. The markets prinicpal actors screwed themselves. Period.
Alan Greenspan said the free market was the free market ideology was flawed as recent events have proven. Further, he said govt regulation would have to be a part of any long term solution to the crdit crisis.