Of course, I’m assuming this is for real; that is, that he will actually act on it:
Obama, “I will not support any plan that puts all the burden for closing our deficit on ordinary Americans,” he said. “And I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans and biggest corporations to pay their fair share.
What do you think?
And I like this comment from a reader on the Republicans cry of “class warfare”:
When 400 people own more than the bottom 150,000,000 Americans COMBINED, we OUGHT to have class warfare!
15 thoughts on “Finally!”
We should certainly have a class war–against the white working class, the lower 2/3 of Americans who have been bamboozled to promote conservative economic policies and who promote detestable, reactionary religiously-motivated conservative social agendas. Of course we shy away from “blaming the victim”–but the white working class has destroyed our country. This is war!
Where’s the _like_ button on this thing?
These are complicated issues. For one thing, what constitutes a “fair share” of taxes? In the States (according to the most recent available government data) the top 1% of income-earning households earn 20% of the income, but contribute 38% of the country’s total income tax revenue. The bottom 50% of households earn only 12.75% of the total income, but then again pay collectively only 2.7% of the country’s total income tax revenue. Yes, I realize that capital gains income figures disproportionately in the gross income of the very wealthiest, but still, those are some eye-opening statistics.
For another thing, what’s the best way to assess the true burden of any plan on “ordinary Americans” (compared to “wealthiest corporations”)? For example, I believe more than 50% of the equity capital of the 1,000 biggest U.S. corporations is actually owned by retirement pension funds – i.e. for the benefit of people who are also Medicare recipients.
Deficit-cutting plans, whether in the U.S. or elsewhere, need to take factors like these into account, but it’s difficult.
Um, Harriet, I really don’t think those are the people we should be attacking.
Nemo: Those figures count federal income taxes only. In addition to the capital gains taxes that you mention, it ignores state income taxes, as well as the most regressive aspects of our tax system: payroll taxes and sales taxes. There are also numerous “fees” (e.g. driver’s license fees) that fall disproportionately on the poor.
Yes, when the Wall Street Journal, the Atlantic and the Urban Institute all agree, you’ve got consensus that an unprecedented number of Americans pay more payroll taxes than ever before:
@jdkbrown: I’m aware of that, though the extent of the impact of those items could be individually debated. I don’t think it materially detracts from the fact that the US. federal tax code is very progressive relative to other developed countries, even if marginal rates are lower (or from my more general point that it’s difficult to say what a “fair share” is). Just to use the same percentiles. The approximate effective federal tax rate (including income, payroll, estate, excise etc.) for the top-earning 20% has been around the 26% range in recent years, and for the bottom half under 10%.
Also, by the most recent data the top 1% still contributes more than 28% of the total federal taxes of all kinds paid by U.S. households, and the bottom half less than 10% of those taxes. So even when you factor in more regressive kinds of federal taxes (I’d have to ask a colleague for pointers to state data), it’s still relatively progressively distributed. At any rate, it’s not distributed in a way that makes it quite obvious exactly how much change, if any, and in which direction, would be needed in order to arrive at “fair shares”.
From Kristof, Nov 2010, NY Times:
Yes, the tax code of the USA is progressive, with higher incomes having higher federal income tax rates.
But that “total federal taxes” number that the top 1% pays is misleading, since it includes all corporate income taxes (which of course the rest of us don’t pay, since we’re not so much wealthy corporations) and only includes 4% of federal social insurance taxes (Social Security and Medicare), which come largely from the payroll taxes all of us working Americans pay, which is a huge chunk of the middle-class federal tax burden, and which count against our liability for income tax (and which are not nearly as “progressive” in rate or in return).
Neither Nemo nor I are actually using the MOST recent data, which on the most timely sites takes into account the significant differences posted in 2009.
Nice point, Kate.
@Kate: It’s true that that effective tax rate includes corporate income taxes, but you seem to be implying that the bottom 99% aren’t paying that (within the allocation framework of this data) because we’re not wealth corporations. But none of the top 1%, or the other 99%, are corporations – all the tax units there are households. Corporate income tax is just allocated to the households, for purposes of calculating the overall effective rates, based on capital income – which does mean that most of that burden is shouldered by the most well-to-do people. So 57% (2007) – not 100%, as you seem to be suggesting – of that corporate tax allocation is borne by the top 1% of families by income. I say this for the sake of clarification. But what I don’t understand is why you think the blended figure is “misleading”.
With regard to the social insurance taxes, you’re correct that the top 1% are paying about 4% (i.e., they are still contributing disproportionately), and it goes without saying that social insurance taxes are less progressive than personal income taxes (which is why I cited the effective rate in the first place (since it was objected that I hadn’t taken into account less progressive taxes). But again, it’s not clear to me why that made the data misleading. So in both cases, I’m not sure what your point was there.
I’m using the most recent CBO figures (for 2007, from the 2010 CBO report). If another site using actual Treasury data and CBO methodology has figures for the 2009 taxable year, it’s worth a look.
Remember Obama’s campaign? Let’s not be fooled by his faux-populism again. Greenwald captures it here:
“[A]fter 2 1/2 years — we suddenly see an outburst of “fighting for jobs” and, now, a call to raise taxes on the rich. He does that precisely because everyone — especially the rich — knows it will not and cannot happen. We’re now formally in (re-)election season, so it’s time again to haul out the progressive music. Some Democrats are honest and cynical enough to acknowledge that Obama is doing all these things purely for political gain and — because his re-election is their top priority — to celebrate it even while acknowledging it will never become reality (see here and here as examples). From that perspective, I suppose having him give speeches where he advocates for jobs and taxes on the rich is preferable to his endorsing austerity and Reaganomics as he had been doing for months But whatever else is true, none of this presages an actual change in how the government functions or, especially, on whose behalf it labors. That’s precisely why he feels free to advocate such things without alienating his funding base. It’s still the government of Tim Geithner and his bosses/owners; election season (combined with rising elite fear of social unrest) just requires a bit more pretense to obscure that fact.”
Jonathan, that is the worry!
Yeah. Sadly, I wouldn’t even consider it an uncertainty. Why would investment banks donate so much to Obama’s campaign if he was genuinely advocating redistributionary economic policies? And why would Obama have appointed investment bankers to his cabinet? Sighhhh
I remembered this conversation when I saw Washington Post’s Reality Check today (on taxes, as well as related topics):
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