Let's Get Real On Tax Reform

 

Summary

Row 1 includes the 36 Million filers with adjusted gross incomes between $50,000 and $499,999.  Row 2 has the stats on the 239 thousand people who have incomes of $1,000,000 or more.  Row 3 has the data on the 93 Million with incomes between $0 and $49,999.

Mean 1976 1976-2000
2000

Percent

Adjusted Percent 2000 After Tax 1976-2000 Percent of
Row Income of all Gross of  Tax After Tax Income After Tax After Tax

#

Range Taxpayers Income Decrease Income (in 2000 $s) Income Gain Income Gain

1

$50,000 to $499,999

27.74%

$96,461

-2.6%

$81,248

$62,951

$18,248

29.1%

2

$1,000,000 or more

0.19%

$3,410,368

43.7%

$2,466,127

$356,261

$2,109,866

592%

3

No AGI to $49,999

71.77%

$19,567

10.4%

$18,142

$19,105

-$962

-5%

The TAX RATE for Row 3 DECREASED by 10.4%, costing the government $14 BILLION in lost revenues. Despite this tax decrease, 93 Million Americans had their AFTER TAX INCOME SHRINK by 5%.   The TAX RATE for Row 1 INCREASE by 2.6%, which gave the government $14 BILLION in additional revenues. This reinforces the popular misconception that any tax relief for poorer Americans comes at the expense of the rich, unless we look at what happened to the super rich. The TAX RATE for Row 2 DECREASED by 43.7%, costing the government $127 BILLION in lost revenues. This tax cut helped the super rich have an AFTER TAX INCOME INCREASE of 592%. 

Why have the bulk of the tax breaks gone to those who need it the least.  If just $56 BILLION had gone to the tax payers in ROW 1 instead, their taxes could have been reduce by 10%.  This would have given all 36 Million taxpayers in the $50,000 to $499,999 income group an average tax cut of $1,500.

Anyone who balks at more tax cuts for the super rich is accuse of fomenting in class warfare.  There has been class warfare going on for years.  How else did half of the growth of the economy end up in the hands of the top 1/5 of 1%?  There is a difference between tax cuts that help American families save, and tax cuts that allow a tiny fraction hoard great wealth.  In 1976, the richest 240,000 controlled 3% of the total income.  After 20 years of sweetheart tax breaks their share of the national income has increased to 13% or $817 Billion of the $6,365 Billion year 2000 national paycheck. Those waging the war for the super rich prefer to keep their actions hidden under a cloud of platitudes.

The 36 million of you in the $50,000 to $499,999 income range have been the voting block who have allowed the current tax cut climate to flourish.  Have you considered that tax cuts favoring the super rich come out of your pocket?  The bottom 72% of tax filer only get 29% of the national paycheck. When divided among 93 million filers, many with families, there isn't much left for more taxes. Even if you get modest short term relief, once the bill comes due you will have to pay most of it. 

It has been said Americans vote their pocketbook.  If you are one of the 99.5% of the population who has an income of $500,000 or less, why do you allow the bulk of tax cuts to be given to the super rich?  Last year's tax cut and the current proposed legislation will give the privileged few an even greater advantage.  Isn't it time to demand Congress stop these giant gifts and treat the rest of us fairly? 

 

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Copyright 2003 Stephen Rodnesky                                                                  Last modified: February 07, 2003