The Rich: Taxes Paid, Polls, and Reality

We have all heard from President Barack Hussein "kill list" Obama that "the rich don't pay their fair share."  While polling data reaffirms that view with the U.S. population, there are polls, and then there is reality.

On August 28, 2012, at Iowa State University, Obama, speaking about taxes and tax rates, said, "We tried this for 10 years before I was elected.  It didn't work out so well.  It didn't work out then; it won't work now."  Isn't it rather ironic that Obama, with his massively failed economic track record, would make such a statement?  His economic policies have not even come close to working.  Yet he continues to say that "the rich don't pay their fair share." 

Polls indicate that the U.S. public agrees with him.

A Pew Research Center poll said that 58 percent of the U.S. population say the rich don't pay enough in taxes.  Twenty-six percent believe that the rich pay their fair share of taxes, while 8 percent say they pay too much.  Further, "[t]he poll found that many Americans believe rich people to be intelligent [43%] and hardworking [42%] but also greedy [55%] and less honest [34%] than the average American."

What follows shows that Obama is lying:

This 2004 study by the Congressional Budget Office (CBO) offers this view of reality.  And let's not forget that Obama was a senator in 2004 so that all this data was available to him.

  • Taxes paid by highest incomes
  • The top 1% [of income-earners] pay 22.7% of taxes.
  • The top 10% pay 50% of taxes.
  • The top 20% pay 65.3% of taxes
  • The top 40% pay 84.3% of taxes.
  • Taxes paid by lowest incomes
  • The bottom 20% [of income-earners] pay 1.1% of taxes.
  • The bottom 40% pay 6.1% of taxes.

The bottom 40% pay about 6% of taxes, while the top 40% pay about 85% of taxes -- or about 14 times more than their counterparts in the lower brackets.  But in light of the constant droning that "the rich don't pay their fair share," how many expected the distribution reported in the CBO paper?

Here are some facts from Stephen Moore, who wrote "The U.S. Tax System: Who Really Pays?" in August 2012.  Interestingly, Moore begins his study with a 1963 quote from John F. Kennedy (emphasis mine):

It is a paradoxical truth that tax rates are too high today, and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the tax rates. ... [A]n economy constrained by high tax rates will never produce enough revenue to balance the budget, just as it will never create enough jobs or enough profits.

Isn't it ironic that Kennedy got it in 1963, but Obama doesn't get it today?

Figure 1 in Moore's study illustrates how the income tax share paid by the richest 1 percent of income-earners has risen while the top marginal income tax rate has fallen.  The tax rate has fallen from 70 percent in 1970 to 35 percent in 2006.  Meanwhile, during the same period, the percent of taxes paid by the top 1 percent of earners rose from 16 percent to 40 percent.  That, in itself, is enough to disprove Obama's assertions.

But the really damning facts to Obama's claims are in figures 3 and 4 of Moore's study:

Figure 3: Who Paid How Much In Taxes (2007)

Earners by percentile

Share of Income

Share of Federal Income Tax Paid

Top 1% Earned

22% of National Income

Paid 40%

Top 5% Earned

37% of National Income

Paid 61%

Top 10% Earned

48% of National Income

Paid 71%

Top 25% Earned

68% of National Income

Paid 85%

Bottom 50% Earned

12% of National Income

Paid 3%

Please note in Figure 3 the percentages of taxes paid versus income earned.  Fair?

Figure 4: Impact of All Federal Taxes (2009)

Cash Income Percentile

Percent of All US Federal Tax Paid

Average Effective Tax Rate

Poor

-0.2

-0.9

Working Class

3.1

6.6

Middle Class

10.5

13.4

Upper Middle Class

19.2

17.2

Wealthy

67.2

22.9




Top 10%

52.0

23.9

Top 5%

40.3

24.8

Top 1%

22.9

26.1

Top 0.1%

10.8

27.9

Please note in Figure 4 the effective tax rates for the top income earners.  Fair?

Dr. Walter E. Williams, reacting to Moore's study, asks: "What standard of fairness dictates that the top 10 percent of income earners pay 71 percent of the federal income tax burden while 47 percent of Americans pay absolutely nothing?"

Obama's "rich don't pay enough" claim is based on anecdotal evidence, such as his claim that Warren Buffett pays a lower tax rate than his secretary.  It is now up to Mitt Romney to educate the U.S. population (at least 58 percent of them), to present facts (and there are plenty of them) to call and raise Obama on this issue, such as with Moore's study findings.  And he should loudly point out the facts so that the MSM cannot continue to ignore them.

Dr. Beatty earned a Ph.D. in quantitative management and statistics from Florida State University.  He was a (very conservative) professor of quantitative management specializing in using statistics to assist/support decision-making.  He has been a consultant to many small businesses and is now retired.  Dr. Beatty is a veteran who served in the U.S. Army for 22 years.  He blogs at rwno.limewebs.com.

We have all heard from President Barack Hussein "kill list" Obama that "the rich don't pay their fair share."  While polling data reaffirms that view with the U.S. population, there are polls, and then there is reality.

On August 28, 2012, at Iowa State University, Obama, speaking about taxes and tax rates, said, "We tried this for 10 years before I was elected.  It didn't work out so well.  It didn't work out then; it won't work now."  Isn't it rather ironic that Obama, with his massively failed economic track record, would make such a statement?  His economic policies have not even come close to working.  Yet he continues to say that "the rich don't pay their fair share." 

Polls indicate that the U.S. public agrees with him.

A Pew Research Center poll said that 58 percent of the U.S. population say the rich don't pay enough in taxes.  Twenty-six percent believe that the rich pay their fair share of taxes, while 8 percent say they pay too much.  Further, "[t]he poll found that many Americans believe rich people to be intelligent [43%] and hardworking [42%] but also greedy [55%] and less honest [34%] than the average American."

What follows shows that Obama is lying:

This 2004 study by the Congressional Budget Office (CBO) offers this view of reality.  And let's not forget that Obama was a senator in 2004 so that all this data was available to him.

  • Taxes paid by highest incomes
  • The top 1% [of income-earners] pay 22.7% of taxes.
  • The top 10% pay 50% of taxes.
  • The top 20% pay 65.3% of taxes
  • The top 40% pay 84.3% of taxes.
  • Taxes paid by lowest incomes
  • The bottom 20% [of income-earners] pay 1.1% of taxes.
  • The bottom 40% pay 6.1% of taxes.

The bottom 40% pay about 6% of taxes, while the top 40% pay about 85% of taxes -- or about 14 times more than their counterparts in the lower brackets.  But in light of the constant droning that "the rich don't pay their fair share," how many expected the distribution reported in the CBO paper?

Here are some facts from Stephen Moore, who wrote "The U.S. Tax System: Who Really Pays?" in August 2012.  Interestingly, Moore begins his study with a 1963 quote from John F. Kennedy (emphasis mine):

It is a paradoxical truth that tax rates are too high today, and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the tax rates. ... [A]n economy constrained by high tax rates will never produce enough revenue to balance the budget, just as it will never create enough jobs or enough profits.

Isn't it ironic that Kennedy got it in 1963, but Obama doesn't get it today?

Figure 1 in Moore's study illustrates how the income tax share paid by the richest 1 percent of income-earners has risen while the top marginal income tax rate has fallen.  The tax rate has fallen from 70 percent in 1970 to 35 percent in 2006.  Meanwhile, during the same period, the percent of taxes paid by the top 1 percent of earners rose from 16 percent to 40 percent.  That, in itself, is enough to disprove Obama's assertions.

But the really damning facts to Obama's claims are in figures 3 and 4 of Moore's study:

Figure 3: Who Paid How Much In Taxes (2007)

Earners by percentile

Share of Income

Share of Federal Income Tax Paid

Top 1% Earned

22% of National Income

Paid 40%

Top 5% Earned

37% of National Income

Paid 61%

Top 10% Earned

48% of National Income

Paid 71%

Top 25% Earned

68% of National Income

Paid 85%

Bottom 50% Earned

12% of National Income

Paid 3%

Please note in Figure 3 the percentages of taxes paid versus income earned.  Fair?

Figure 4: Impact of All Federal Taxes (2009)

Cash Income Percentile

Percent of All US Federal Tax Paid

Average Effective Tax Rate

Poor

-0.2

-0.9

Working Class

3.1

6.6

Middle Class

10.5

13.4

Upper Middle Class

19.2

17.2

Wealthy

67.2

22.9




Top 10%

52.0

23.9

Top 5%

40.3

24.8

Top 1%

22.9

26.1

Top 0.1%

10.8

27.9

Please note in Figure 4 the effective tax rates for the top income earners.  Fair?

Dr. Walter E. Williams, reacting to Moore's study, asks: "What standard of fairness dictates that the top 10 percent of income earners pay 71 percent of the federal income tax burden while 47 percent of Americans pay absolutely nothing?"

Obama's "rich don't pay enough" claim is based on anecdotal evidence, such as his claim that Warren Buffett pays a lower tax rate than his secretary.  It is now up to Mitt Romney to educate the U.S. population (at least 58 percent of them), to present facts (and there are plenty of them) to call and raise Obama on this issue, such as with Moore's study findings.  And he should loudly point out the facts so that the MSM cannot continue to ignore them.

Dr. Beatty earned a Ph.D. in quantitative management and statistics from Florida State University.  He was a (very conservative) professor of quantitative management specializing in using statistics to assist/support decision-making.  He has been a consultant to many small businesses and is now retired.  Dr. Beatty is a veteran who served in the U.S. Army for 22 years.  He blogs at rwno.limewebs.com.