In recent weeks we’ve been confronted by a slew of tax proposals from GOP presidential candidates, ranging from Herman Cain’s “9-9-9″ plan to Rick Perry’s “Cut, Balance and Grow Plan.” For many voters, the details of those various proposals can no doubt get a little hazy and confusing.
To address that problem, I’ve been wanting to put together a comprehensive post addressing all of the plans at once. Thanks to the release of Rick Perry’s plan and a new report on household incomes released Tuesday by the Congressional Budget Office, I finally have the analytical data I needed to pull it all together.
Before we go further, let’s review the CBO findings:
1.) The overall federal tax system became less progressive between 1979 and 2007, thanks largely to the greater relative impact of payroll taxes.
2.) The share of federal transfer payments going to poor Americans also fell sharply, from more than 50 percent to 35 percent. According to CBO, “that shift reflects the growth in spending for programs focused on the elderly population (such as Social Security and Medicare), in which benefits are not limited to low-income households.”
3. The study also documents the ongoing concentration of national income among the richest 1 percent of U.S. households. It found that the share of after-tax income going to the lowest-income 20 percent of Americans fell between 1979 and 2007, dropping from 7 percent to 5 percent. In fact, income share fell by 2 to 3 percent for almost every income group. It rose only among the most affluent 1 percent. Their share of national income more than doubled, from 8 percent in 1979 to 17 percent in 2007.
(Although those percentage shifts may not sound like much, in real terms it is quite large. For example, the 7 percent shift in household income from the middle 60 percent of Americans to the richest 1 percent represents a shift of $539 billion a year from the 60 percent to the 1 percent. Overall, the CBO reports that income of the highest-earning 1 percent rose by 275 percent in that time frame, after inflation.)
Anyway, as promised the final exhaustive package on GOP tax-reform plans is available HERE. I’ve put it in the form of an info-graphic. Take a look and if you think I’m missing anything, or if you think of a way to make it clearer, let me know.
– Jay Bookman