Sharing the Tax Burden
Then Edwards’ analysis:
1990 was before the Clinton tax increases of 1993. 2000 was after the modest tax cuts of 1997, but before the Bush tax cuts of 2001. 2005 was with the Bush tax cuts in place.
Folks at the top pay about 25% of their income in federal income taxes, which compares to less than 5% for half of the population at the bottom end.
The Bush tax cuts substantially reduced tax rates for people in every income group. Indeed, those at the bottom had the largest relative reductions in their tax rates.
Those at the bottom have paid little, and now they pay even less, due to legislation under both Clinton and Bush. Indeed, these data do not include the tens of billions of dollars sent to lower-income families as a result of the earned income tax credit, and thus it overstates taxes paid by the bottom group.
Then we hear from James Pethokoukis that Wall Street (Goldman Sachs, to be precise) is predicting tax increases when (not if) a Democrat is elected President. Some of what they say, as reported by Pethokoukis:
Marginal tax rates on high-income earners are likely to increase…through a combination of allowing the 33 percent and 35 percent brackets to revert back to 36 percent and 39.6 percent respectively, and increasing the rate paid under the alternative minimum tax for higher income earners, which is currently set at 28 percent. The tax rate on dividends is likely to rise. The capital gains rate will rise as well, but may be lower than the dividend rate once again. The long term capital gains rate looks likely to rise from its current level of 15 percent. … An increase past 20 percent is possible but less likely. If it were to increase further, the next natural stop would be 28 percent, which was the rate that applied to long term capital gains before President Clinton and Congress agreed to lower it in 1997. Tax changes could become effective in 2009, but are more likely in 2010 or 2011. Although it seems fairly clear that an all-Democratic government is likely to let some of the expiring tax rates expire, it is much less clear that they will proactively raise tax rates before they are scheduled to reset at the end of 2010. … A tax hike in 2010 is more likely, but could also present political problems.
I’d guess that the Democrats will try to pin the tax rates of the highest 10-25% of wage earners back to 2000 levels. And they’ll still excoriate these highly taxed, high-earners for not paying their “fair share.” The class-warfare game plan seems to work, after all.
Then again, maybe “over paid executives” will welcome higher taxes.