Fair Share

This summary of 2010 tax data poses some awkward questions for the Demagogue in Chief who insists that Millionaires and Billionaires are simply not paying their fair share of taxes.

 


Turns out that the top 0.1 percent of income earners (118,000 households with almost $6MM in average income) paid more in personal income tax than the bottom 80 percent did. That’s despite the fact that the bottom 80 percent collectively earned more than six times as much money as the top 0.1 percent did.

The President never seems to ever tell us what arrangement he thinks is "fair", but apparently those 118,000 pikers in the top 0.1% need to cough up even more than 139 Million of the rest of us.

Dishonesty About the Buffet Rule

President Obama wants tax reform to adhere to his newly formulated “Buffett Rule” which states: Families and small businesses making more than $1 million should not pay a smaller share of their income in taxes than a middle income family.

Okay, let's look at the data for 2009 (most recent IRS data):

Income Level                   Taxes % Taxable Income    Taxes % Adjusted Gross Income
$1,000,000-1.5MM                  29.4%                                    25.3%
$10,000,000+                           26.3                                        22.6

$50,000-75,000                        11.6                                         7.7
$75,000-$100,000                    12.3                                         8.5
$100,000-200,000                    16.3                                        11.9

I did this in ten minutes using publicly available data from the IRS. Which conclusion should I draw here:

a) The President isn't smart enough to do the research that I did?
b) The President knows fully what the data shows and is being intentionally misleading?

The Myth of the Middle-Class Squeeze

Economist Bruce Meyer of the University of Chicago publishes research showing (once again) that what "everybody knows" is wrong. Pundits and politicians repeat over and over: The poor are getting poorer. The middle class is shrinking. The economy is worse for families than ever before. Except it's not true.

His research paper demonstrates widespread improvement over the last thirty years in the
material well-being of American families. Improvement is seen in the middle of the distribution
and among those near the bottom. After appropriately accounting for inflation, taxes, and
non-cash benefits, he shows that median income rose by more than 50 percent over the past three
decades. This increase is considerably greater than the gains implied by official statistics—
official median income rose by only 14 percent between 1980 and 2009.

Figure 3: Median Income and Consumption, 1980-2009