Wednesday, April 07, 2004

No Tax Cut For The Rich

Sounds like a left-wing protest, doesn't it? You know, where prags walk around with Palestinian flags and socialist rags.

From econopundit this morning we have a nice graph displaying those supposed tax cuts for the rich

Money Quote:
So far there appears no evidence whatsoever of the "tax cut for the rich" charge. Changing regulations have reduced the burden of each income quintile except that at the very top. From the standpoint of all federal taxes, 2001 represents increased income progressivity as compared with the previous decades.

In fact, from 79-01, the top quintile has increased its mammoth share almost 15% to a whopping 65.3%, while those in the bottom 4 quintiles have enjoyed a nice 20% decline in their burden (numbers are rounded to nearest whole number) to 34.7%. Remember folks, this means that 20% is carrying almost DOUBLE the tax burden of the other 80% of the country.

The next time someone spouts "No Tax Cuts For The Rich", you can respond "Damn Straight!!!! They carry a larger burden than ever before, those poor bastards!!" In fact, if you happen to run into a rich person, don't beg for a loan (they've already indirectly given you one), just say "Thanks for paying your taxes".

Final Note: I haven't seen the most recent numbers on this, but last time I checked (2001), the cutoff for being part of the top 5% was $93,300. Now honestly, if that's the top 5%, where do you think the top 20% income falls? As Bruce Bartlett said back in 2001: "They probably don't realize that when liberals talk about "the rich," they mean them."

UPDATE: i received a reply stating that if percentage of national income has increased for the top quintile, it naturally makes sense that their burden of taxation has gone up, although this doesn't mean effective tax rates have increased for those individuals. when share of income (pre-tax) changes are computed, we see a 15.16% (45.5% to 52.4%) increase for the top quintile, with a 12.66% (54.5% to 47.6%) decrease in the bottom four quintiles. so, the burden HAS kept pace with the relative increase in share of income for the top quintile, while the burden has DECREASED (on the aggregate) for the bottom four quintiles. interesting outcome, but still supports the claim that there have been NO tax breaks for the 'rich' as their burden has matched their increased share of national income, while all others have enjoyed a nice decline in their burden that surpasses their increasing percentage of national income.

have fun with the numbers here if you are so inclined.