Sorry, Obama: The tax code is already more progressive than pre-Reagan
Given the discussion about President Obama’s desire to raise taxes on “the rich” — i.e., families earning more than $250,000 a year — it’s rather convenient that the Congressional Budget Office yesterday published its latest look at earnings and taxes paid by income level. It tells us a couple of worthwhile things.
First, as I mentioned in a comment yesterday evening, it tells us the U.S. tax code is already rather progressive. Here are the numbers I posted yesterday in chart form; note that “federal taxes paid” includes not only income taxes but social-insurance taxes, corporate taxes (which, after all, are ultimately paid by individuals) and excise taxes for 2009, the most recent year the CBO has examined:
So, even when we include the payroll taxes for Social Security and Medicare, which disproportionately hit lower-income workers, the U.S. tax code is already sharply progressive. What liberal/progressivists have yet to tell us is exactly how much more progressive they think it should be.
Well, sort of. We do have an idea of what they think it should be, at least for starters, in the form of Obama’s raise-taxes-on-the-rich proposal. Part of his usual argument for raising taxes on the rich is that we’ve been going down the wrong path for the past three decades — which is shorthand for: since Ronald Reagan was elected and sharply lowered marginal income-tax rates.
Conveniently, the CBO’s report includes data going all the way back to 1979. So, how did things change over the course of 30 years?
One of the ways the Organization for Economic Cooperation and Development (or OECD, the Paris-based club of industrialized nations) measures tax-code progressivity is by calculating the ratio of the tax burden to income earned for each income group. For example, if one quintile earns 20% of the income and pays 10% of the taxes, its ratio would be 10/20, or 0.50. The higher the ratios for the upper-income groups, and the lower the ratios for the lower-income groups, the more progressive the tax code. By this measure, the OECD has determined the U.S. has the most progressive tax code in the industrialized world.
When we compare the 2009 ratios for these income groups to the 1979 ratios, this is what we get:
So, by this measure used by the OECD, the U.S. tax code has gotten significantly more progressive, from top to bottom, since the days of Jimmy Carter.
For another comparison, I looked at 2000 (the peak of the Clinton years) and 2007 (the peak of the Bush years). Despite the Bush tax cuts, the ratios for 2007 were almost identical to those of 2000: just three-thousandths of a point less progressive for the top 1%, and more progressive for all the other income groups.
If there is a problem with income inequality in this country, it’s not the tax code’s fault.
– By Kyle Wingfield
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565 comments Add your comment
Uh Oh
July 11th, 2012
5:39 pm
Have a tissue Barry, take two
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
July 11th, 2012
5:41 pm
Uh Oh: Guess that’s why K street cronies spend billions. They don’t know they didn’t even have to because government does it all.
——————-
First correct thing you’ve said all day, even if by accident. Lobbyists spend tons of money lobbying…GOVERNMENT. Why? Because it is government that rigs the game.
Less government = Less corruption
@@
July 11th, 2012
5:42 pm
Mitt Romney met with boos in NAACP speech
Oh well…it was worth a try.
Uh Oh
July 11th, 2012
5:42 pm
off topic
House voted to repeal Obamacare.
That was a great use of time and like the last 30 votes will prove to be fruitful.
DOA
AmVet
July 11th, 2012
5:44 pm
The corruption and game-rigging are facilitated by and flat out committed by government.
Of course!
But you love it that Washington DC is corproate owned territory.
You love it that there is an army of over 10,000 lobbyists who ply them with goodies and actually write the legislation. (Because they are the experts!)
You love it that our elected representatives work for the super-wealthy and the mega-corporations instead of for you and me we the people – like they used to.
YOUR candiate actually said Corporations are people, my friend! How perverted is that???!!!
The giant companies used to be our servants and they served us well.
They are now our masters.
Which explains why 70% (and growing) of Americans think they have too much control over our government and our lives.
And why a tiny few number of men are getting staggeringly rich most Americans by far are no better off than we were in 1973.
And why Tiberius went berserk when I posted that amazing quote from Thomas Jefferson. You know the one.
But alas, our sovereignty (look it up if you are not exactly sure of the definition) is being sold off each and every year. To the highest bidder, whether on Wall Street or in Beijing.
I’m just thankful that I am old enough that I will not live long enough to see these works come to their fruition.
Long live the United Corporations of America.
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
July 11th, 2012
5:44 pm
DOA–Like Obozo’s budgets.
Uh Oh
July 11th, 2012
5:45 pm
“Less government = Less corruption”
Oh yeah. White collar criminals who are caught all the time scamming, stealing, etc are only doing it because of the laws and regs in place. Otherwise they are decent people.
Too bad, that wasn’t the smartest thing you said all day
Uh Oh
July 11th, 2012
5:46 pm
Barry
Money is allocated and spent via appropriations bills. But you can tout those talking points until you are blue in the face.
Nice try
DannyX
July 11th, 2012
5:47 pm
Speaking of hypocrisy check out this teleprompter blunder! End of quote! Lol!
http://www.youtube.com/watch?v=6ubsRRAADTg&feature=player_embedded
Get him Barry!
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
July 11th, 2012
5:47 pm
AmVet: But you love it that Washington DC is corproate owned territory. You love it that there is an army of over 10,000 lobbyists who ply them with goodies and actually write the legislation. (Because they are the experts!)
——————–
A little thought experiment for you. The government spends $3.6 trillion every year. Would there be more lobbyists, fewer lobbyists, or the same amount of lobbyists if the government spent $0 per year?
Uh Oh
July 11th, 2012
5:48 pm
Are lobbyist not crawling and welcome to some degree in every state capital in states run by Republicans, Democrats or both?
@@
July 11th, 2012
5:48 pm
San Bernadino filed for bankruptcy????
So far, that’s Stockton, Mammoth Lakes and now San Bernadino. The beginning of the end for the Golden State.
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
July 11th, 2012
5:50 pm
Same goes for the states, Uh Oh. Less government spending, fewer lobbyists. Less government, less corruption.
getalife
July 11th, 2012
5:50 pm
Germany is doing a green energy project not living the moon.
We should follow their lead.
md
July 11th, 2012
5:50 pm
“Mitt Romney met with boos in NAACP speech”
That’s because he laid out the numbers and the truth was scary……unemployment in the black community is higher than in any other group, with young blacks around 50%, yet they will vote for more of the same.
Even knowing that Obama made their plight worse by unilaterally granting amnesty to illeagals and giving them the opportunity to obtain work permits…….yep, that should help.
getalife
July 11th, 2012
5:51 pm
not living on the moon.
My bad.
Uh Oh
July 11th, 2012
5:52 pm
Danny X
How fitting that Romney would quote MLK. After all he did see his dad march with him.
md
July 11th, 2012
5:52 pm
“YOUR candiate actually said Corporations are people, my friend! How perverted is that???!!!”
Not perverted at all but you just don’t like the facts.
We already went over all that……have you come up with something a corp can do on it’s own yet???
getalife
July 11th, 2012
5:54 pm
@@,
The mayor of Scranton proposed min. wage for his government.
DannyX
July 11th, 2012
5:54 pm
“After all he did see his dad march with him.”
You mean Mitt the teleprompter candidate is going to release his last 12 tax returns?
Uh Oh
July 11th, 2012
5:56 pm
“Same goes for the states, Uh Oh. Less government spending, fewer lobbyists. Less government, less corruption.”
Well if you live here in GA you might want to stop worrying about DC and head down to the capital. It is crawling with lobbyists and I know this will hurt, but many are ex Republican legislators lobbying Republicans.
If you are going to cry, cry about all of it.
I know two lobbyists. One who has been at it for sometime and makes a pretty penny. Says games and fun are as good and even better for him now that Republicans are in charge.
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
July 11th, 2012
5:56 pm
Our President Romeny offers the opportunity for folks to work for a living at a decent job. Obozo offers a topped-off EBT card and easier qualification for SSI.
Americans will choose Our President Romney.
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
July 11th, 2012
5:57 pm
Uh Oh: Well if you live here in GA you might want to stop worrying about DC and head down to the capital.
————————-
Why are the lobbyists at the capital?
md
July 11th, 2012
5:58 pm
“So far, that’s Stockton, Mammoth Lakes and now San Bernadino.”
Unfortunately, somebody has to eat those loses…….and since Wells Fargo is based out there, it may be some of their customers around the country……
Scranton, Pa may be next now that the unions are suing the mayor. I guess it makes sense to someone to sue for what isn’t there…….100% employed at minimum wage or 40% employed at regular wage…….that is the question.
Uh Oh
July 11th, 2012
5:58 pm
President of the Glee Club, but I doubt the USA
But keep HOPE ALIVE
AmVet
July 11th, 2012
5:58 pm
So you do love the corporatocracy, BB?
That is why you Republicans hate any form of government that stands up for you and me – the little guys – and against the fat cats on Wall Street and elsewhere.
The depraved and insanely greedy men who came within an eyelash of destroying our republic back in 2008 in their attempted corporate destruction of capitalism.
But hell, you don’t even hold them responsible. AT ALL!!
This is why we are well and royally screwed.
They know that they can get away with it again. Sooner or later.
I just hope I’m pushing up daisies when the next one comes…
AmVet
July 11th, 2012
6:01 pm
“After all he did see his dad march with him.”
He reminds me of Herman, who actually said that he was too young to get involved with the Civil Rights movement.
These guys will lie about ANYTHING!
md, I think you should go out on the campaign trail and be Mitt’s frontman with the black folks! You can set them straight about how Mitt and the GOP are their best friends!
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
July 11th, 2012
6:04 pm
AmVet: So you do love the corporatocracy, BB?
————————-
No, I love freedom, free-market capitalism, and private property.
Government’s job is to safeguard those things so they can continue to provide the highest standard of living for the most people possible, as has been the case in the U.S.
Government’s job is not to distribute those things. Governments that try to do that inevitably fail.
Obozo ignores all that history, thinking that he is the one, the messiah, who is smart enough to do totalitiarianism right.
If you support Obozo, you’re OK with totalitarianism.
You might not be pushing up daisies when that comes, if Obozo gets four more years and if so-called “Americans’ continue to vote for that.
md
July 11th, 2012
6:04 pm
“The mayor of Scranton proposed min. wage for his government.”
And just so the info is clear, he’s also a dem and he also paid himself min wage.
It’s what happens when the gov’t gets bigger than the private sector can support……look for it to occur more often and maybe even on a national scale since we just added another unaffordable entitlement program to what we already couldn’t afford………..
Gimme Gimme Gimme
July 11th, 2012
6:06 pm
I really didn’t mean to hurt Tiberius’s feeling at 5:04. I feel a little bad now.
Uh Oh
July 11th, 2012
6:06 pm
“If you support Obozo, you’re OK with totalitarianism.”
Rhetoric, hyperbole and lie ALERT!!!!!!!!!!!
Rhetoric, hyperbole and lie ALERT!!!!!!!!!!!!!!!
Thought there was some drama posted earlier. Get this man an Emmy and an Oscar for the best bs on a political blog
md
July 11th, 2012
6:06 pm
“md, I think you should go out on the campaign trail and be Mitt’s frontman with the black folks! You can set them straight about how Mitt and the GOP are their best friends!”
That would be like arguing with you about corporations or the cause of stagnant wages…..
I’ll save that energy thanks
Uh Oh
July 11th, 2012
6:08 pm
Gimme Gimme Gimme
Tiberius will be back.
td
July 11th, 2012
6:09 pm
Just finished a Hart foundation poll. After taking this Democratic poll I can most confidently announce that within the next couple weeks the Obama Campaign will be trying to attack Romney for wanting to do away with Medicare and Social Security to balance the budget and give tax cuts to the rich.
fair and balanced
July 11th, 2012
6:10 pm
Glad to see nobody on the right in this blog has any Republican solutions to the trillion dollar plus health care deficit created by Reagan, George W. and Romney with Romneycare as explained above.
Just keep passing those unfunded mandates and blame the consequences on the other party when you are out of office. And if the other party passes a fix to the mess Republicans created in healthcare by all means vote it down. Very productive. Glad to see everyone is having so much fun ducking the real issues.
Uh Oh
July 11th, 2012
6:12 pm
td
That could be true. But lets not forget some of the tried and true Repub election tactics. Democrats want your guns, abortion, school prayer, gays.
Both use the same crap each election. Only difference is what one wants to call out and what bs one will accept
Nothing new
getalife
July 11th, 2012
6:13 pm
md,
Minimum wage is a great idea for our congress.
They vote to end ACA, they deserve to lose their benefits too.
@@
July 11th, 2012
6:14 pm
Getalife:
Past litigations prompted by unions has cost the city dearly. So what do the unions do when wages are reduced?
Sue.
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
July 11th, 2012
6:17 pm
If Republicans can’t do away with Obozocare, reality will.
getalife
July 11th, 2012
6:17 pm
@@,
Nah, it is the pols setting up their pensions.
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
July 11th, 2012
6:21 pm
Thousands fled Canada for health care in 2011
A Canadian study released Wednesday found that many provinces in our neighbor to the north have seen patients fleeing the country and opting for medical treatment in the United States.
Read more: http://dailycaller.com/2012/07/11/report-thousands-fled-canada-for-health-care-in-2011/#ixzz20M5A0rbA
——————————–
I guess that happens because Canada’s health care system is better than ours.
getalife
July 11th, 2012
6:22 pm
lil bar,
If ACA fails, you get Canadian health care.
Is that what you want?
AmVet
July 11th, 2012
6:22 pm
If Republicans can’t do away with RomneyCare, reality will prove how they are complete nutjobs on the matter..
Matt Miller in today’s Washington Post. “Because Obamacare WAS the Republican alternative. It was the conservative-designed mandate and subsidy approach….
Only in America could a Democratic president pass Mitt Romney’s health plan and fund it partly through John McCain’s best idea from the last campaign (taxing some employer-provided plans) and be branded a ’socialist’.”
Speaking of John McCain, Mitt will be the second coming of that RINO…
MarkV
July 11th, 2012
6:43 pm
What Kyle’s table and arguments carefully avoid is that in comparison with the other countries with “less progressive tax codes,” most of those countries spend much more than the US on social programs.
td
July 11th, 2012
6:50 pm
MarkV
July 11th, 2012
6:43 pm
“most of those countries spend much more than the US on social programs.”
Spend more raw dollars or spend a larger % of their GNP?
MarkV
July 11th, 2012
6:52 pm
td @6:50 pm
Greater percentage of GDP.
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
July 11th, 2012
7:15 pm
getalife: If [Obozocare] fails, you get Canadian health care. Is that what you want?
————————–
I’d prefer freedom. Freedom to choose my own health insurance plan, doctor, and medical decisions.
Responsible, competent adults don’t fear freedom. Democrats do.
Uh Oh
July 11th, 2012
7:29 pm
Barry
Even for matters like gay marriage and abortion, right?
Hillbilly D
July 11th, 2012
7:33 pm
Dusty
If I went over to my neighbors and opened the doors on his broiler houses, he’d probably shoot me. If he did, I deserve it, if I did that.
@@
I know about conservation trusts and they will reduce your taxes but still, you have to pay the taxes, even if they’re reduced. Of course, you could be like a politician in the Hills who got it fixed were he paid $0, on his home. Me. I ain’t got that kind of pull.
Fred
Sometimes posts on here just disappear. It’s happened to me most everywhere, at some time or another but for whatever reason, I seem to have more trouble with it at Mark Bradley’s than anywhere else. Don’t think it’s anything MB does; it’s just a flaw in the system.
You’re correct. If the buyer agrees to the conservation use, the discount continues. If not, the taxes owed are usually worked out in the sale.
At my county office, they told me otherwise. They told me that if you sell the land, the conservation agreement is nullified, you pay the back taxes and penalties. Happened to somebody I know, here, and he paid out the wazoo.
If the sidewalks have already been rolled up here, maybe y’all will see this in the morning.
md
July 11th, 2012
7:34 pm
“Glad to see nobody on the right in this blog has any Republican solutions to the trillion dollar plus health care deficit created by Reagan, George W. and Romney with Romneycare as explained above.
Just keep passing those unfunded mandates and blame the consequences on the other party when you are out of office.”
What a weak argument…..especially when the dems had total control from 08-10…..do you think others don’t know that or what?