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Do secretaries usually pay more in taxes than their rich bosses?

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From ABC News.

Excerpt:

Treasury Secretary Geithner yesterday declined to answer a key question about the president’s proposed “Buffett Rule”:  How many millionaires and billionaires pay lower tax rates than middle-income families?

The answer: not that many.

The nonpartisan Tax Policy Center has crunched the numbers and found that Warren Buffett and his secretary are the exception to the rule.  For the most part, the wealthy pay a significantly higher percentage of their income in taxes than middle-income workers.

The key numbers:  this year those earning over $1 million will pay, on average, 29.1 percent on federal taxes.  Those earning between $50,000 and $75,000 will pay 15 percent.

That’s not to say that there aren’t wealthy people who are even better than Buffett at avoiding taxes.  In 2009, 1,470 people with incomes over $1 million a year paid absolutely no taxes.  But that represents less than 1 percent of those earning over $1 million a year.  Raising their taxes may be the fair thing to do, but it will not bring in much revenue.

The Cato Institute has a lovely graph of income tax rates by income earned.

Well, how much revenue can we generate if we take 100% of everything that people making over earn? (Assuming that they keep working solely for the government, of course, which Democrats would assume)

The Tax Foundation explains.

Excerpt:

So taking half of the yearly income from every person making between one and ten million dollars would only decrease the nation’s debt by 1%.  Even taking every last penny from every individual making more than $10 million per year would only reduce the nation’s deficit by 12 percent and the debt by 2 percent.  There’s simply not enough wealth in the community of the rich to erase this country’s problems by waving some magic tax wand.

Finally, to put everything in perspective, think about what would need to be done to erase the federal deficit this year:  After everyone making more than $200,000/year has paid taxes, the IRS would need to take every single penny of disposable income they have left.  Such an act would raise approximately $1.53 trillion.

George W. Bush’s last deficit, with a Republican House and Senate, was 160 billion. But Obama’s deficits are about TEN TIMES that amount.

See:

Obama Budget Deficit 2011
Obama Budget Deficit 2011

But Obama’s current annual budget deficits exceed 1.53 trillion. So taxing the rich at 100% isn’t enough to pay for All of Obama’s spending. That’s how big a hole Barack Obama has got us into.

By the way, Warren Buffett’s blathering about wanting to pay more taxes is a load of garbage. His company is currently in a dispute with the IRS to avoid paying as much as ONE BILLION DOLLARS in back taxes. You would not have heard of this if all you watched was Jon Stewart and Stephen Colbert on the Comedy Channel, or Chris Matthews and Rachel Maddow on MSNBC.

Videos

Are the poor getting richer in America?

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From Bill Whittle.

Here’s a write up of the video from Hot Air.

Excerpt:

Have the rich gotten richer? Indeed they have, Bill Whittle says in his latest Afterburner — but so have the poor. As wealth expands, living standards rise, and Whittle shows just exactly how it did over the last 40 years in the US. In fact, he argues that the better comparison is not between the rich and the poor in this country, but between the American poor and the average citizen in Europe, Asia, and Africa…

The ultimate arguments are this: what exactly does “poor” mean, and what is the best way to alleviate poverty? If poor in the US is defined such that 97.7% of those households have televisions, 98% have refrigerators, almost 40% have computers, and 78% have air conditioning, then we’re defining “poverty” rather loosely — and that’s the point. The Left wants the definition as wide as possible in order to keep more Americans on public-subsidy rolls, which then incentivizes them to support larger and more intrusive government.

What is the best way to alleviate real poverty?  The data Whittle presents shows that a dynamic economy based on private property and capital choice lifts the living standard for everyone.  Europe went in the nanny-state direction, and now their average qualifies as our poor, at least by living-standard metrics.  That’s something to keep in mind while we debate the nature of safety nets, government spending, and fiscal reform.

Addendum: The data here comes from the Heritage Foundation, so be sure to check it out.

This could be useful when getting into debates with leftists.

Commentary

Are the rich paying their fair share of taxes?

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Do the rich pay their fair share of taxes?
Do the rich pay their fair share of taxes?

The Hoover Institute at Stanford University tweeted this article.

Excerpt:

The Democrats’ position in the negotiations to raise the debt limit and deal with runaway government debt can be summarized in one mantric phrase: the rich must “pay their fair share” in taxes. White House communications director Dan Pfeiffer, for example, said a day before the Obama’s Sunday summit with Congressmen that any deal requires a “balanced approach that asks the very wealthiest and special interests to pay their fair share.” Earlier this year, Illinois Congressman Jan Schakowsky introduced legislation called the Fairness in Taxation Act, which she justified by saying “It’s time for millionaires and billionaires to pay their fair share.” Clearly, the Democrats think this is a winning formula going into the critical 2012 elections, despite the historically verified fact that raising tax rates on top earners will not over time generate more tax revenues.

Some political Socrates needs to challenge this formula by asking for a definition of “fair.” Clearly, having the top 10% of taxpayers pay 70% of all income taxes––while nearly half of taxpayers pay nothing––isn’t considered “fair” by those who want to increase taxes on high earners. So what would be fair? Having the top 10% pay 80%, or 90%, or 100%? The U.S. already has the most progressive tax system among 24 OECD countries, ahead of socialist heartthrobs like Sweden and Norway, so what more do Democrats want?

It might be a good idea to send this article to your friends, and bookmark it in case you get into a debate.