Tax Whoppers the right likes to spread

[Dardedar]

A fellow named Dave on Betsy's face book was going on about corporate taxes being too high. I bumped into this article today so I thought I would take a moment to knock down some standard rightwing talking points regarding taxes. This is about eight years old but the point remains the same. Any claim of corporate taxes being too high should be considered in the context of:

a) what collection actually is (rather than just a rate corporations get around with loop holes)
b) what collection has been in the past

***


LINK

The big corporate tax cut bill just passed by Congress and signed by President Bush will slash corporate income tax payments this year to their lowest level as a share of the economy since the early Reagan administration. This will be the second lowest level in the past 60 years.

The latest data from the Congressional Budget Office and the Joint Committee on Taxation indicate that corporate taxes will plummet to only 1.3 percent of gross domestic product this year. That will be the lowest since fiscal 1983, when corporate taxes bottomed out at 1.1 percent of the GDP level on the heels of the huge corporate tax reductions enacted in 1981.

Despite the expected economic recovery, the continuing effects of the 2002 corporate tax cuts will keep next year’s corporate tax payments at only 1.4 percent of GDP, the third lowest level in the past 60 years.

In comparison, over the past 60 years corporate income taxes averaged:

* 5.6 percent of the GDP during World War II,
* 4.5 percent in the Truman and Eisenhower administrations,
* 3.7 percent under Kennedy and Johnson,
* 2.7 percent under Nixon and Ford,
* 2.4 percent under Carter,
* 1.6 percent in the Reagan and Bush I administrations, and
* 2.1 percent under Clinton.

More on corporate taxes in the US:

"As I reported in June, while it's technically accurate that America has the second highest corporate tax rate of the 30 mostly wealthy countries of the Organization of Economic Cooperation and Development, in practice it has the fourth lowest corporate tax revenues among those nations, because of all the special tax favors we currently dole out to corporations and because many corporations shirk their patriotic tax responsibilities and park profits overseas.

Today even more evidence comes out to debunk the conservative corporate tax myth. The Associated Press reports (link via ThinkProgress) that a new U.S. General Accountability Office study finds 68 percent of U.S. corporations do not pay any taxes at all.

Conservatives concocted the corporate tax myth to conjure up an excuse for more corporate tax cuts."

2nd highest corporate tax rate myth.

Regarding tax fairness, this is interesting also:

The Minnesota Department of Revenue released a report in 2007 entitled "2007 Minnesota Tax Incidence Study."... Also, the Joint Religious Legislative Coalition has put together a business card-sized chart from the report that shows a 2009 estimate for effective tax rates by population decile for all state and local taxes. Unfortunately, the results reveal that Minnesota's state and local tax system disproportionately impacts low-income households.

LINK

As I've mentioned before, let's look at Arkansas:

"When all Arkansas taxes are totaled up, the study found that:

* Arkansas families earning less than $15,000—the poorest fifth of Arkansas non-elderly taxpayers—pay 12 percent of their income in Arkansas state and local taxes.

* Middle-income Arkansas taxpayers—those earning between $26,000 and $42,000—pay 11.7 percent of their income in Arkansas state and local taxes.

* But the richest Arkansas taxpayers—with average incomes of $911,500—pay only 6.8 percent of their income in Arkansas state and local taxes."

LINK

See the state by state break down here.

Poor people and the middle class pay a *greater* percent of their income in state and local taxes than the wealthy. It's the same everywhere. Check your state and see.

[L.Wood]

.

Great Resource Dar, thank you!
.
LW

[Dardedar]

David Sheron wrote a response on facebook that very few are watching, so I'll respond to him here where it is much more spacious and we can post pictures etc. I'll even put his charts up for him.

David wrote:
"As usual Darrel you do not draw the right conclusions. In part it is because of your inherent socialist beliefs.

DAR
David spends the majority of his time calling those he disagrees with names. I'll ignore this because it's embarrassing behavior and a waste of time. Unfortunately, after extracting his baseless insults it leaves very little of his post left. I think he is trying to improve though.

DAV
You believe, as stated above, that property rights are limited to land

DAR
Of course I've never stated, and never would state that property rights are limited to land. For example my vehicles are my property and I have rights of ownership, etc.

DAV
- where I believe property includes my finances and the efforts of individuals and corporations.

For example:
You believe that the government can take a certain amount of money based on a GDP measure

DAR
Nope. I simply gave a chart showing that government taxing of corporations, as a measure of GDP, has decreased substantially over a long period of time. This provides a context, a reference point. There are other references points of course.
David quoted Paul Otellini (Intel CEO) who made the point that comparatively the US has a very high corporate tax rate. This is true but very misleading for these reasons (as shown in post above):

a) 68% of US corporations pay no corporate income tax
b) of the top 30 nations in the OECD the US is fourth from the bottom in revenue collected.

With this context we see that Otellini's point is wrong.

DAV
You obviously believe that the government should grow EXPONENTIALLY as long as it is tied to some objective measure.

DAR
Actually I don't. Best to respond directly to my points rather than make things up and then respond to that. Avoid the strawman fallacy.

DAV
that the government should have a finite amount of taxes in which to use REGARDLESS of how well private enterprise and its citizens prosper.

DAR
I think the government should tax enough to pay it's bills and conduct fiscally sound government. I think taxes should be progressive and those with more wealth should pay more. As shown above, and the Warren Buffet example, we haven't been taxing the wealthy enough. They have learned how to game the system. I think Warren Buffet should pay the same or a greater percentage of his earnings in taxes than his secretary does but he doesn't. Again, the Warren Buffet example which you complain about and attempt to dismiss with the genetic fallacy but consistently do not attempt to responding to directly:

"Warren Buffett, the famous investor known as the "Sage of Omaha", has complained that he pays a lower rate of tax than any of his staff - including his receptionist. Mr Buffett, who is worth an estimated $52bn (£25bn), said: "The taxation system has tilted towards the rich and away from the middle class in the last 10 years. It's dramatic; I don't think it's appreciated and I think it should be addressed."

During an interview with NBC television, Mr Buffett brandished an informal survey of 15 of his 18 office staff at his Berkshire Hathaway empire. The billionaire said he was paying 17.7% payroll and income tax, compared with an average in the office of 32.9%.

"There wasn't anyone in the office, from the receptionist up, who paid as low a tax rate and I have no tax planning; I don't have an accountant or use tax shelters. I just follow what the US Congress tells me to do," he said."
LINK

DAV
I believe we should have a safe environment for me to take care of myself. You believe that we should have a safe environment AND the government should take care of me....

DAR
Please cite where I have said I think the government should take care of you. Unfortunately, most of Dave's posts consist of repetition of vague slogans like these.

But let's look at a few numbers to support your position.

DAR
With no adjustment for inflation this is a rather useless and misleading chart.

DAV
Here we see budgets and deficits for the last 40 years...

What the government spends as a percentage of GDP

Average taxes as a percentage of GDP



Notice how Democrats controlled the HOUSE & SENATE for 40 years and this is what we got (budget wise)...

[See second chart above]

DAR
I was hoping Dave had a point in there somewhere but apparently he doesn't. It's not enough to just show pretty charts, do you have a point? Are you trying to say republicans have been more fiscally responsible then democrats? Well, then please address these two points I've made before and you've ignored:

Over the last 75 years, Republican administrations have had an average annual deficit of $83.4 billion. The average for Democratic presidents is one fourth of that, only $20 billion.
--George Mason’s University, History News Network LINK

Which party is better at “small government” and keeping federal spending down? Since 1959 federal spending has gone up an average $35 billion a year under Democratic presidents and $60 billion under Republicans. So it’s no surprise to find Republican presidents have increased the national debt much faster, more than $200 billion per year, versus less than a $100 billion per year under Democrats. And this is not even counting the second term of G.W. Bush.
--Michael Kinsley, Washington post

It's funny you see no balanced budgets until Newt Gingrich put pressure on Clinton, etc. in the mid 90's

DAR
Sorry, easy on the revisionism there cowboy. In 1993 Clinton passed his deficit reduction plan without a single republican vote. Republicans love to rail against responsible government yet when it is imposed upon them and turns out well, they want the credit. Pitiful.

CLINTON 2 YEARS AFTER CONTRACT WITH AMERICA - BLANCED BUDGET!

DAR
Yes, the fellow you guys smeared as a big spending big government socialist, slashed the welfare roles, shrank the government and balanced the budget. Gingrich got thrown out on his ass. I don't think Dave's charts are having his desired effect.

What you are in favor of in particularly (i.e. heathcare reform) is MANDATORY SPENDING which is arguably the single most costliest part of running our government.

DAR
This is just gibberish. Try to focus Dave. Be specific. With regard to healthcare I am for:

1) better outcomes,
2) all citizens covered, and
3) less cost/waste.

All of our peer countries, to varying degrees, manage to do this better than we do.

[Dave throws in another random chart]

DAR
Do notice how cutting taxes blew a hole in government revenue.

Defense versus discretionary spending

DAR
I am rather skeptical that there hasn't been some fudging on what is actual defense spending and what has been hidden off budget and in various budgets like the DoE etc. Regardless, the notion of a country spending over 50% of it's discretionary funds on the military, is rather obnoxious.

Snip insults and slogans

DAV
Read this... and then you will understand what I... and millions of others really know and you do not....

LINK

DAR
I am quite aware the US fiscally trajectory is unsustainable. I am a deficit hawk and have been preaching this song for years. When you say I don't, you just reveal again that you don't know what you are talking about. A couple years ago I played this video at our public library for a freethinker meeting (about 50 in attendance).

IOU USA. It makes this case rather well. Perhaps you should watch it.

DAV
You need to reassess your priorities and understand that our policies are similar to Greece and other countries that are having HUGE problems

DAR
Our fiscal problems are not similar to Greece.

DAV
I personally don't want my children to have smaller cars, smaller houses, fewer vacations, etc.

DAR
I do want our children to have smaller cars (and they will), and I also want the government to not spend to subsidize large vehicles for the wealthy as they did under G.W. Bush.

Fed Tax Break Encourages SUV Purchases

"Congress recently passed a tax bill, as proposed in President Bush's economic stimulus plan, that offers a $100,000 tax credit for business owners who purchase any vehicle weighing 6,000 pounds or more when fully loaded."

This cost the treasury tens of billions of dollars and rewarded stupidity. Thanks Bush.

DAV
I am not socialist like you so I don't believe you will ever understand the ideals of this country...
Liberals can never connect the dots..... They just want to claim CREDIT (Clinton) or blame (BUSH)"

DAR
It seems rather reasonable to me that liberals would claim credit for Clinton's successes and blame Bush for Bush's disasters. After all, Bush was the Worst President Ever and Clinton was quite successful contrary to the efforts to the right wing to destroy him.

Bush, he's your guy right?

D.
------------------
"Mr. Bush's final approval rating [22%] is the lowest final rating for an outgoing president since Gallup began asking about presidential approval more than 70 years ago."
--CBS.

[Dardedar]

David wrote: [snip insults]...
You say that Republicans did it when, for the first time in 40 years, Republicans took control of house and senate.

DAR
My referenced examination of the fiscal record goes back further than 40 years. As I remember, republicans get some credit for fiscal restraint in the 90's. They also get all of the blame of the fiscal stupidity during Bush's years when they controlled both houses. Again:

a) Over the last 75 years, Republican administrations have had an average annual deficit of $83.4 billion. The average for Democratic presidents is one fourth of that, only $20 billion.
LINK

b) Since 1959 federal spending has gone up an average $35 billion a year under Democratic presidents and $60 billion under Republicans. Republican presidents increased the national debt much faster, more than $200 billion per year, versus less than a $100 billion per year under Democrats. --LINK

1. What was happening that made Republicans run deficits? I.e Vietnam, Persian Gulf I., Iraqi Freedom., Slashing taxes ( Reagan, Bush II, continued by Obama ) to stimulate an economy going stale in an attempt to save jobs.

DAR
Excuses excuses. Address my data that shows that over a rather long period of time, republicans are found to be more fiscally irresponsible than democrats.

You could even say... That OBAMA will double the deficit in 5 years, triple it in 8 or so and create MORE debt than compared to what 43 other presidents did before him COMBINED.

DAR
You could say a lot of things, and some republicans say that. I am dealing with historical fact, not future speculation. There is a difference. Incidentally, Obama has lowered taxes on about 95% of the populace.

a. Unlike you I will not draw that wrong conclusion based solely upon who is in office.
b. The single most telling device of who is actually SPENDING more is seeing who is giving MORE and MORE entitlements.
c. Your argument is centered (as one graph dictates as a slope of a mountain ) that Democrats spend LESS. But the facts say that taxes AND spending are higher during the times of Democratic control. These programs are not one and done ( like war ) they GROW the government and then we get the " well taxes are still low when compared to the GDP "

DAR
a) mere assertion
b) vague assertion
c) vague assertion

So yes deficits may be smaller because why? Dems double the tax rate.

DAR
Please provide a reference showing that "Dems double the tax rate."

What social program have they slashed?

DAR
I already provided the link for you. Note:

"Under the Clinton-Gore Administration, the welfare rolls have dropped dramatically and are now the lowest since 1969. Between January 1993 and September of 1999, the number of welfare recipients dropped by 7.5 million (a 53 percent decline) to 6.6 million. In comparison, between 1981-1992, the number of welfare recipients increased by 2.5 million (a 22 percent increase) to 13.6 million people." ibid

Hell even Bush I slashed the Army in half giving us a "peace dividend" that helped Clinton attempt to balance the books.

DAR
Please show, with reference, which "Bush," "slashed the Army in half."

d. Dems TAX more AND SPEND more...

DAR
To try to focus Dave, and support your claims with something beyond mere assertion. You are spouting cliche's so vague there is nothing to debunk.

But the bottom line is if we reverted to Clintonesque government spending and taxation levels we would be headed in the right trajectory.

DAR
I wonder if Dave was a Clinton supporter when it would have mattered? Doubtful. The luxury of good times and good choices we had under Clinton were pissed away under the profound fiscal irresponsibility of the republican party under GW Bush. Time to grab a shovel and help dig us out of the ditch he dug us into.

You like to refer to Gingrich and the Contract with America. Let me quote a fellow who was a participating member of that group during the time:

"The White House's own numbers best illustrate how
shamefully the Party of Reagan has misspent our tax
dollars over the last ten years. When comparing its
fiscal record to that of the Clinton administration,
George W. Bush's White House loses in a landslide."
-- Republican Joe Scarborough, "Rome Wasn't Burnt in a Day, pg. 27 (2004)

"Using the Bush White House's own numbers, the federal
government under Bill Clinton grew at an annual rate
of 3.4 percent. But over the past four years under
George W. Bush and his Republican Congress, the
federal government has grown at a staggering rate of
10.4 percent. More damning is the fact that... George
Bush never once vetoed a congressional bill."
--Republican Joe Scarborough, "Rome Wasn't Burnt in a Day”, pg. 29 (2004)


"Three years ago the Congressional Budget Office
looked at the promising economic landscape and
projected a $5.6 trillion surplus for the next ten
years under Republican leadership. Today we are faced
with a $2.9 trillion deficit that will be add to the
[7.5 trillion] national debt over the same time
period. And for the first time since 1997, Americans
are again faced with deficits "as far as the eye can
see,..."
--Republican Joe Scarborough, "Rome Wasn't Burnt in a Day, pg. 100 (2004)

You can't do that with a 500 Billion shell game called Health Care ( with what? Higher spending and higher taxes )

DAR
More vague unsupported assertions. With regard to healthcare I am interested in three, specific things which I cited. You give me vague unsupported slogans.

Point made... Quit spending Americans money like you earned it and then comparing it to some number like GDP. You may not understand this - but it is OK for us, as a country, to quit growing the size of government and it's entitlement programs."

DAR
I was going to snip this last one but left it in to show, again, that Dave, rather than respond to my specific points directly (as I do his) he can only respond with vague, unsupported cliche's and slogans. Boring.

D.
-------------------
Bonus, regarding Clinton:

How soon they forget.

Clinton:

* cut the Federal Workforce by over 200,000 -- on the way to lowest level in 30 years.

* Got rid of 16,000 pages of obsolete regulations...

* Eliminated 284 federal advisory committees.

By 2000:

Smallest Government Workforce Since the 1960's... 375,000 fewer employees in the Federal government workforce than in 1993 -- ...the smallest Federal workforce since the Kennedy Administration.

Lowest Government Spending Since 1974. At 18.7 percent, Federal Government spending as a share of the Gross Domestic Product [was] at its lowest level since 1974.

And what do you have?

"big-government conservatism." The lines on every graph show the same pattern: Government -- whether measured by spending, the deficit, the number of employees, or earmarked appropriations -- expanded through the Nixon, Ford, Reagan, and Bush Senior administrations; declined steadily under Clinton; then shot rapidly northward after Republicans took control of the White House in 2001."

LINK.

[Dardedar]

Dave likes to complain about taxes a lot. This might be of interest (and note, this fellow not only has a Ph.D who won the Nobel Prize in economics, so we know David, who puts great import in such things, will want to listen carefully):

Down The Memory Hole

May 22, 2010

The blue line, left scale, shows median family income in 2008 dollars; the red line, right scale, shows the top marginal tax rate, a rough indicator of the overall stance of policy. Basically, US postwar economic history falls into two parts: an era of high taxes on the rich and extensive regulation, during which living standards experienced extraordinary growth; and an era of low taxes on the rich and deregulation, during which living standards for most Americans rose fitfully at best.



This does not, to say the least, make the case for free-market orthodoxy. So a large part of the right has invented an alternative history in which the good years came after, not before, the Reagan revolution. Hey, that’s what should have happened; who you gonna believe, the doctrine or your own lying eyes?
New York Times

Bonus:

The 'Tax and Spend' Myth: a Look at the Evidence

Ten Republican Tax Whoppers

[Dardedar]

A bit more from Dave. He says a few things but does not answer a single question directly, he doesn't back up a single claim that was asked of him and he responds to almost nothing. A few pokes and I think he's done:

Less Government is MORE Government but you still (as usual) under analyze the situation and causation...

DAR
Actually, less government is never more government, by definition.

Dav
Bushes unfunded prescription drug crap ( that went straight to the deficit and grew the guvmint) or how about the new healthcare plan and tell me who spends less on recurring or mandatory spending.

DAR
CBO says the healthcare plan will spend less. They could be wrong. No one ever pretended Bush's unfunded prescription plan would save money. And they lied about its size, by about $400 billion, to get it passed. Neat.

Dav
(traditionally) is Democrats who ENLARGE spending AND taxes.

DAR
Mere assertion + wishful thinking does not address my points and the data that support them.

Dav
BTW You can't keep hopping on the Buffet table if I can't serve Otellini...

DAR
I don't believe things because of who says them, I believe things because they can be shown to be true. Here is the difference between our methods. I have responded to your claim from Otellini directly, and refuted it. You have not even attempted respond to Mr. Buffett's observation about paying a lower rate on his income than his secretary. And with good reason, you can't. Incidentally, he backs up his claim with this challenge:

I’ll bet a million dollars against any member of the Forbes 400 who challenges me that the average (federal tax rate including income and payroll taxes) for the Forbes 400 will be less than the average of their receptionists.

So far, no-one has taken him up on this bet." LINK

Dav
(fastest growth of government spending is when Dems control both houses - smallest growth? When Repubs control both houses) LINK

DAR
Not exactly. Your own source refutes you. And the clue was right in the heading:

"Most people believe that Democrats are big spenders and that Republicans are tight-fisted. The evidence leads to a very different conclusion."

Note, as the fellow (your source) admits, his sample is too short to be meaningful (unlike mine). A couple cherry picks from your source:

"In the twelve years that a Democrat has sat in the White House, spending has increased at an average rate of 1.29% per year; during the 22 years of Republican presidencies, government spending has risen at an average rate of 2.12%. In other words, spending has grown 64% faster when a Republican sits in the White House than when a Democrat does."

And: "When Democrats controlled the White House plus both houses of Congress, spending grew at 1.70% per year, slightly below the average growth rate of 1.83% for the entire period."

Oops, your source just said that Demos running all branches of government results in lower than average spending. Thus he concludes:

"All this must come as a shock to the overwhelming majority of Americans who believe that Democrats are spenders and Republicans want to cut government spending. The simple fact is that during the past 34 years, government spending has grown significantly faster when a Republican has sat in the White House."

Nice source you have there. Are we learning anything yet Dave?

Your source also shows some different arrangements that produce slightly different results. Republican in the WH with demos in Congress is worse for spending but again, this sample is far to short to be meaningful.

Dav
This is my last post as I have been asked to refrain from engaging the mindless any further. I bid farewell and I hope you serve your master well."

DAR
After shooting himself in the foot with his own squirt gun, and one more canned insult for good measure, I do believe Dave has decided to tuck tail and run. Oh well, he lasted longer than last time. Come on back if you ever want to try again.

I do wish I could someday find a conservative with the courage and talent to defend their beliefs.

D.
----------------------
Excerpt from Dave's source above:

"Consider the case of Ronald Reagan. He called for cutting back government, but presided over a massive increase in the size and power of government, at least as measured by government spending per capita. Government spending during his administration grew at an average rate of 2.28%, nearly three times as fast as during the administration of Democrat Bill Clinton.
Similarly, Richard Nixon was elected based on his promises to cut back government, but spending increased during his administration at a faster rate than during any subsequent administration except that of George W. Bush."
The Politics of Presidential Spending

[Dardedar]

From Perrspectives

"New data from the nonpartisan Joint Committee on Taxation show that households earning more than $1 million a year
would reap nearly $31 billion in tax breaks under the GOP plan in 2011, for an average tax cut per household of about $100,000."



The price tag for Americans' largesse for the wealthiest who need it least? $36 billion in 2011 alone, and $700 billion over the next decade.

[kwlyon]

From Perrspectives

"New data from the nonpartisan Joint Committee on Taxation show that households earning more than $1 million a year
would reap nearly $31 billion in tax breaks under the GOP plan in 2011, for an average tax cut per household of about $100,000."

.........

The price tag for Americans' largesse for the wealthiest who need it least? $36 billion in 2011 alone, and $700 billion over the next decade.

Darrel, you shouldn't talk about things you don't understand. You sound like an idiot. Let me explain this to you in simple language that you can understand. You see, we cut taxes for the rich as this stimulates their business interest. This excess capital will then "trickle down" to everyone else as the expenditures of these large corporations increase. This is exceedingly solid economic policy. It has never failed us in the past so long as we all squeeze the turnkey testicles while chanting to the full moon preceding the 15th of April.

[Dardedar]

This excess capital will then "trickle down" to everyone else as the expenditures of these large corporations increase.

DAR
Yes, in fact we have a picture from one of those parties where they were discussing this:

[Dardedar]

The bottom 50% pay no taxes?

Regarding the claim, made by SFA on NWAonline: [note: he later changed his name to "commonsense"]

SFA: "It is clearly documented that close to 50% of citizens do not pay taxes,"

This is one of the most popular rightwing talking points, so let's dismantle it:

Do the poor really pay no taxes?

"The following graph comes from a report (pdf) by Citizens for Tax Justice. It compares the share of the total tax burden -- that means income taxes, payroll taxes, state and local taxes, capital gains taxes, and so forth -- with the share of the total income for different groups. It's the single most important graph to understand our tax system."



Washington Post

And:

The ‘50 percent pay no tax’ fraud, Part II

"...the actual number of taxable units (households and individuals) that earn enough to file tax forms but pay no federal income tax is actually 38 percent, not 50 percent. --source: factcheck

And of course, income taxes are just one of several forms of federal taxation — you’ve got gasoline taxes, payroll taxes, etc. The Congressional Budget Office has analyzed total effective federal tax rates by income, and comes up with the following (2005 numbers):

—————-Average income ————Effective fed tax rate

Lowest 20 percent………$15,900 ……………………4.3 percent

Second 20 percent…….. $37,400…………………… 9.9 percent

Middle 20 percent……….$58,500………………….. 14.2 percent

Fourth 20 percent……….,$85,200………………….. 17.4 percent

Top 20 percent…………..$231.300…………………..25.5 percent

Top 1 percent…………..$1,558,500………………….31.2 percent

LINK

Regarding state taxes, observe:

Who Pays? A Distributional Analysis of the
Tax Systems in All 50 States

"This study assesses the fairness of each state’s tax system, measuring the state and local taxes paid by different income groups in 2007 (including the impact of tax changes enacted through October of 2009) as shares of income for every state and the District of Columbia... The study’s main finding is that nearly every state and local tax system takes a much greater share of income from middle- and low-income families than from the wealthy. That is, when all state and local income, sales, excise and property taxes are added up, most state tax systems are regressive."

Institute on Taxation & Economic Policy

Let's look at Arkansas specifically:

"When all Arkansas taxes are totaled up, the study found that:

* Arkansas families earning less than $15,000—the poorest fifth of Arkansas non-elderly taxpayers—pay 12 percent of their income in Arkansas state and local taxes.

* Middle-income Arkansas taxpayers—those earning between $26,000 and $42,000—pay 11.7 percent of their income in Arkansas state and local taxes.

* But the richest Arkansas taxpayers—with average incomes of $911,500—pay only 6.8 percent of their income in Arkansas state and local taxes."

See the state by state break down here:

http://www.itepnet.org/wp2009/statespecific.html

Poor people and the middle class pay a *greater* percent of their income in state and local taxes than the wealthy. So stop this nonsense about the poor not paying taxes. They pay bigtime.

UPDATE and further roast:

Commonsense: "...the bottom 50% not pay any federal income taxes...">>

You never really have recovered emotionally from the demise of this cherished talking point. It might work in your circles, but it's not going to fool any adults. Let's kick it one more time, thoroughly.

Consider how dishonest it would be if I were to cherry pick for instance the lone category of "payroll" tax, which generates the exact same revenue for the government:

http://tinyurl.com/3gzgoby

...and then exclude all other taxes. I would never do that of course, because it would be absurd and transparently dishonest, a complete distortion. Yet this is precisely what you have no trouble engaging in continuously, even after your rudimentary slight of hand is revealed ten different ways and simplified to grade school level. That's rather telling I think.

Let's detail the ways it fails and misleads:

"Misconceptions and Realities About Who Pays Taxes"

http://www.cbpp.org/cms/index.cfm?fa=view&id=3505

Excerpt:

1) The 51 percent figure is an anomaly that reflects the unique circumstances of 2009, when the recession greatly swelled the number of Americans with low incomes and when temporary tax cuts created by the 2009 Recovery Act — including the “Making Work Pay” tax credit and an exclusion from tax of the first $2,400 in unemployment benefits — were in effect. Together, these developments removed millions of Americans from the federal income tax rolls. Both of these temporary tax measures have since expired.
In a more typical year, 35 percent to 40 percent of households owe no federal income tax. In 2007, the figure was 37.9 percent.

2) The 51 percent figure covers only the federal income tax and ignores the substantial amounts of other federal taxes — especially the payroll tax — that many of these households pay . As a result, it greatly overstates the share of households that do not pay any federal taxes... only about 14 percent of households paid neither federal income tax nor payroll tax in 2009,....

3) This percentage would be even lower if federal excise taxes on gasoline and other items were taken into account.

cont...

4) Most of the people who pay neither federal income tax nor payroll taxes are low-income people who are elderly, unable to work due to a serious disability, or students, most of whom subsequently become taxpayers.

5) Moreover, low-income households as a whole do, in fact, pay federal taxes. Congressional Budget Office data show that the poorest fifth of households as a group paid an average of 4 percent of their incomes in federal taxes in 2007 (the latest year for which these data are available), not an insignificant amount given how modest these households’ incomes are — the poorest fifth of households had average income of $18,400 in 2007. [4] The next-to-the bottom fifth — those with incomes between $20,500 and $34,300 in 2007 — paid an average of 10 percent of their incomes in federal taxes.

6) Even these figures understate low-income households’ total tax burden, because these households also pay substantial state and local taxes. Data from the Institute on Taxation and Economic Policy show that the poorest fifth of households paid a stunning 12.3 percent of their incomes in state and local taxes in 2010.

7) When all federal, state, and local taxes are taken into account,the bottom fifth of households paid 16.3 percent of their incomes in taxes, on average, in 2010. The second-poorest fifth paid 20.7 percent.

Regarding your EITC distortions, observe:

8.) The majority of EITC recipients receive the credit for only one or two years at a time, such as when their incomes drop due to a temporary layoff; they pay federal income tax in other years. In fact, EITC recipients pay much more in federal income taxes over time than they receive in EITC benefits. A leading study of this issue found that taxpayers who claimed the EITC at least once during an 18-year period paid a net $473 billion in federal income tax over that period (in 2006 dollars).

Bottomline: "The federal tax system is progressive overall, but state and local tax systems are regressive and undo a significant share of that progressivity."

Much more here:

http://www.cbpp.org/cms/index.cfm?fa=view&id=3505



The 51% Zombie Lie

[Doug]

Job creation by the wealthy is mostly a myth

We hear it continually; it is the mantra of conservatives: "We must give tax breaks to the wealthy so they can create more jobs … and higher taxes will stifle economic growth … because the rich are the job creators. … " It is the basis of all the tax breaks given the top income groups in recent years, including the contentious extension of the Bush tax cuts to top brackets, last year. It is the common subject of conservatives on the talk shows.

Just last weekend, Paul Ryan, now the architect of the new Republican budget, reaffirmed his proposal to cut the top tax rate to 25 percent, claiming in his plan: … advancing pro-growth tax reforms, this budget is a jobs budget. It sends signals to investors, entrepreneurs, and job creators that a brighter future is still possible.

There is only one thing wrong with this premise and theory: It is not true! There is absolutely no empirical evidence to support such a claim. None! Yet, those who purport it continue to glibly make the claim as though it were fact. And for good reason: It gives them cover for avoiding the charge that they are merely attempting to make the rich richer; it also permits them to focus on deficit reduction through smaller government rather than having to address the revenue side of the equation as well.

Indeed, there is actually evidence that there is not only no correlation between granting the wealthy tax relief to "grow the economy," there is even some evidence that the contrary is frequently true.

See here.

[Dardedar]

Are we taxing the rich too much?

***
Billionaires' guide to U.S. taxes shows Top 400 pay lower rates than you

BLOOMBERG NEWS

"The 400 U.S. taxpayers with the highest adjusted gross income paid income taxes at an actual, or “effective,” rate of just under 17 percent in 2007, down from almost 30 percent in 1995, according to the Internal Revenue Service. The effective rate for the 1.4 million people in the top 1 percent of taxpayers dropped to 23 percent in percent the year before. That means the top 400 pay a lower rate than the next 1,399,600 or so, Bloomberg Businessweek reports in its April 11 issue."

Miami Herald

[Dardedar]

How the rich pay no taxes

"For the well-off, this could be the best tax day since the early 1930s: Top tax rates on ordinary income, dividends, estates, and gifts will remain at or near historically low levels for at least the next two years. That's thanks in part to legislation passed in December 2010 by the 111th Congress and signed by President Barack Obama.

"This is clearly far and away the most generous tax situation that's existed," says Gregory D. Singer, a national managing director of the wealth management group at AllianceBernstein (AB) in New York. "It's a once-in-a-lifetime opportunity."

For the 400 U.S. taxpayers with the highest adjusted gross income, the effective federal income tax rate -- what they actually pay -- fell from almost 30 percent in 1995 to just under 17 percent in 2007, according to the IRS. And for the approximately 1.4 million people who make up the top 1 percent of taxpayers, the effective federal income tax rate dropped from 29 percent to 23 percent in 2008. It may seem too fantastic to be true, but the top 400 end up paying a lower rate than the next 1,399,600 or so.

That's not just good luck. It's often the result of hard work, as suggested by some of the strategies in the following pages. Much of the top 400's income is from dividends and capital gains, generated by everything from appreciated real estate -- yes, there is some left -- to stocks and the sale of family businesses. As Warren Buffett likes to point out, since most of his income is from dividends, his tax rate is less than that of the people who clean his office."

LINK

[Dardedar]

Supply side roast.

"Federal revenue is lower today than it would have been without the tax cuts. There's really no dispute among economists about that," said Alan D. Viard, a former White House economist under George W. Bush, in a 2006 Washington Post article.

Robert Carroll, deputy assistant Treasury secretary for tax analysis, also said that no one in the administration believes tax cuts created a surge in revenue. "As a matter of principle, we do not think tax cuts pay for themselves," Carroll said.

Bruce Bartlett, a Reagan economist who became a strong critic of the Bush administration's policies, used data from the Office of Management and Budget in a blog post last year to illustrate how "the Bush tax cuts reduced revenue rather significantly."



http://www.huffingtonpost.com/2011/04/1 ... 50192.html

***
Also:

"January 16, 2008

Question: "Have tax cuts always resulted in higher tax revenues and more economic growth as many tax cut proponents claim?

Answer: No. In fact, economists say tax cuts do not spark enough growth to pay for themselves.

This economic theory is what George H.W. Bush called “voodoo economics.” We called it “supply-side spin” when we wrote about Republican presidential contender John McCain’s claim that President George W. Bush’s tax cuts had increased federal revenues. We found that a slew of government economists – from the Congressional Budget Office, the Treasury Department, the Joint Committee on Taxation and the White House’s Council of Economic Advisers – all disagreed with that theory, saying that tax cuts may spur economic growth but
they lead to revenues that are lower than they would have been if the cuts hadn’t been enacted."

http://www.factcheck.org/askfactcheck/h ... igher.html

Note the date. Those "White House’s Council of Economic Advisers" are GW Bush's people.

[Dardedar]

Regarding those high US corporate tax rates.

Analysis: 12 Corporations Pay Effective Tax Rate of Negative 1.5%on $171 Billion in Profits; Reap $62.4 Billion in Tax Subsidies

"The non-profit Citizens For Tax Justice (CTJ) has put out their findings revealing that twelve of the nations largest Fortune 500 companies, while making $170 billion in profits during the period of The Great Recession, paid an effective tax rate of negative 1.5%.

Yes, you read that correctly.

Not only have these twelve companies paid zero in taxes for the years 2008-2010, they actually received tax subsidies that added $62.4 billion to their bottom lines.The companies were chosen by the CTJ to represent a range of industries, including manufacturing, energy, services, transportation and high tech and include – in alphabetical order – American Electric Power, Boeing, Dupont, Exxon Mobil, FedEx, General Electric, Honeywell International, IBM, United Technologies, Verizon Communications, Wells Fargo and Yahoo.

Here are the bullet points presented by the report:

-From 2008 through 2010, these 12 companies reported $171 billion in pretax U.S. profits. But as a group, their federal income taxes were negative: –$2.5 billion.
All but two of the dozen companies enjoyed at least one no-tax year over the 2008-10 period, despite reporting substantial pretax U.S. profits in those no-tax years.

-Eight of the twelve companies reported net tax benefits over the full three-year period.

-According to the study, not a single one of these companies paid an amount even close to the 35% statutory tax rate."

LINK

*corporate

[Dardedar]

Misconceptions and Realities About Who Pays Taxes

Executive Summary

A recent finding by Congress’ Joint Committee on Taxation that 51 percent of households owed no federal income tax in 2009 [1] is being used to advance the argument that low- and moderate-income families do not pay sufficient taxes. Apart from the fact that most of those who make this argument also call for maintaining or increasing all of the tax cuts of recent years for people at the top of the income scale, the 51 percent figure, its significance, and its policy implications are widely misunderstood.

The notion that “half of Americans don’t pay taxes” not only overstates the share of households that do not pay federal income taxes in a typical year. It also ignores the other taxes people pay, including federal payroll taxes and state and local taxes. ...

The reality is that the income tax is one of a number of types of taxes that individuals pay, both over the course of their lifetimes and in a given year, and it makes little sense to treat it as though it were the only one that matters. Some 86 percent of working households pay more in payroll taxes than in federal income taxes. In fact, low- and moderate-income people pay a much larger share of their incomes in federal payroll taxes than high-income people do: taxpayers in the bottom 20 percent of the income scale paid an average of 8.8 percent of their incomes in payroll taxes in 2007, compared to just 1.6 percent for taxpayers in the top 1 percent of the income distribution. ...

Low-income families also pay substantial state and local taxes. Most state and local taxes are regressive, meaning that low-income families pay a larger share of their incomes in these taxes than wealthier households do. The bottom fifth of taxpayers paid 12.3 percent of their incomes in state and local taxes in 2010, according to the Institute on Taxation and Economic Policy (ITEP) model. That was well above the 7.9 percent average rate that the top 1 percent of households paid."

Misconceptions and Realities About Who Pays Taxes

Much more at the link.

[Dardedar]

Ten Charts that Prove the United States Is a Low-Tax Country

Our Citizens and Corporations Pay Much Less Than They Once Did and Much Less Than in Most Other Countries

The United States is a low-tax country. That’s true for individuals and for corporations, and it’s true whether you compare us to other countries or the America of the past. No matter how you slice it the conclusion is the same. Conservatives like to claim that our budget deficits are purely a “spending problem.” Said Senate Minority Leader Mitch McConnell (R-KY): “We don’t have this problem because we tax too little. We have it because we spent too much.”

It’s a popular talking point, but it simply isn’t true. Deficits do not stem from spending levels alone. They are the product of a mismatch between spending and revenue. And when revenue is as low as ours is, you end up with big deficits.

demonstrating the simple, clear truth that federal taxes in the United States are very low.

[url=http://www.huffingtonpost.com/2011/06/10/ten-charts-showing-how-low-american-taxes_n_875067.html#s290495&title=2_US_Taxes]Also, this Huff Po excerpt:

"Among the 30 nations included in studies by the Organization For Economic Co-Operation and Development, the United States ranks among the countries with the lowest effective tax rates. At an average of 26.9 percent of America's gross domestic product from 2004 to 2008, the effective federal tax rate is significantly lower than in Denmark, for example, whose average effective tax rate was the highest of the countries studied, at 49.3 percent of its GDP. Similarly, the United States taxes corporations at lower rates than other countries. American corporations enjoy a rate of 13.4 percent of their profits. Compare that to Australia, whose corporations cough up 30.5 percent of what they make.

...American taxes have decreased significantly over the last half-century. In 1945, for example, the highest possible tax rate was 94 percent of income. Today, the highest rate is only 35 percent. Federal tax revenue today accounts for only 14.8 percent of America's gross domestic product. In 2009, the most recent year with data available, the average ratio of tax revenue to GDP of OECD nations was 33.7 percent."



"Recently, President Obama met with a group of House Republicans to discuss the federal budget and the national debt. During the course of that meeting, the president noted, correctly, that taxes today are even lower than they were under President Ronald Reagan. This fact was met with “a lot of ‘eye-rolling’” from the Republicans. They didn’t believe him.

This anecdote suggests that perhaps the reason conservatives think we don’t have a revenue problem is because they don’t know the facts. Taxes today are lower than they were under President Reagan. They’re lower today than they’ve been in 60 years. And they’re lower than they are in most developed countries.

We do have a debt problem coming down the road. That debt problem is the result of an aging population, rising health care costs, and, yes, revenue levels that are too low."

American Progress

[Dardedar]

Critics Still Wrong on What’s Driving Deficits in Coming Years

Economic Downturn, Financial Rescues, and Bush-Era Policies Drive the Numbers



http://www.cbpp.org/cms/index.cfm?fa=view&id=3036

[Dardedar]

The 400 Richest Americans Pay An 18% Tax Rate

Jul. 25 2011

The 400 richest Americans used to pay 30% of their income on the average to Uncle Sam. Today, they pay 18% on the average, according to Steve Rattner, a Wall Street financier, who just presented these figures on Mornings With Joe, MSNBC.

The main reason for the drop in their tax rate of some 40% is the tax cuts by George Bush in 2003, taking the rate paid on dividends and capital gains down to 15%."

Forbes

[Dardedar]

One chart to inform them all:



White House