If you look at the richest 400 taxpayers in the 1960s, they paid an average individual federal income tax rate of around 40 percent. By the 1990s, that was 30 percent. By 2007, it was just over 16 percent. Warren Buffett actually said that he thinks that he thinks that his secretary pays a higher tax rate than he does.
“The rich are always going to say that, you know, just give us more money, and we’ll go out and spend more, and then it will all trickle down to the rest of you. But that has not worked the last 10 years. And I hope the American public is catching on.” Warren Buffett said.
If you look at just like the top one-tenth of one percent—so that’s the top one in a thousand taxpayers—their share of national income has quadrupled—actually, more than quadrupled—over the last 30 years. And that group, which is about one in a thousand taxpayers, in 2007 was earning one in eight dollars. And that’s the backdrop against which we should understand the deficit commission report.
If you look at the deficit commission proposals, they basically have three elements that are going to make things worse. They are basically going to start deficit reduction efforts very quickly, which could endanger a very fragile recovery. And we have, you know, millions of Americans who are out of work and millions more who are working part-time because they can’t find a full-time job. And that—we’re consigning our country, perhaps, to a very, very long period of great hardship if we don’t try to get the economy moving rather than immediately try to impose fiscal restraint.
they are focused overwhelmingly on cutting spending, which sounds good in principle, but if you look into the future, what that really means is that we’re talking about imposing most of the cost and the losses on middle-class and working-class Americans who rely more on programs like Social Security and Medicare and what the government does to encourage education and the like than do those higher on the ladder. And finally, the tax proposals that are in the deficit commission proposals are actually regressive. That is, they make the tax code even less fair. For the top—the top one percent would actually see an increase in their after-tax income of almost two percent due to these tax proposals, whereas the bottom 40 percent of Americans would see their income fall by three percent due to these proposals. It’s a remarkable remarkable story, that we’ve basically had this huge skew in income, and yet, right now, the leading calls are for extending tax cuts for the richest and for imposing a certain kind of fiscal restraint that will be hardest on middle- and working-class Americans.
Discussion with Jacob Hacker
Jacob Hacker, Professor of political science at Yale University and co-author with Paul Pierson of the new book Winner-Take-All Politics: How Washington Made the Rich Richer—And Turned Its Back on the Middle Class.
– from democracynow.org