New York Times, The Rich Can Afford to Pay More Taxes, by Bruce Bartlett:
Conservative groups such as the Tax Foundation pooh-pooh the idea of raising tax rates on the rich, asserting that there isn’t enough money available to bother with. On Friday, however, the respected Tax Policy Center published estimates showing that the potential revenue would have a significant impact on projected deficits. ….
The larger question is how much the well-to-do should pay. According to the IRS, in 2008, those in the top 1% of the income distribution, with incomes over $380,000, had an effective tax rate of 23.3%. In 1986, a year when the real gross domestic product grew a healthy 3.5%, their effective tax rate was 33.1%. It has been much lower every year since.
If this group were still paying 33.1%, federal revenue would have been more than $166 billion higher in 2008 alone. That would be enough to reduce the budget deficit by about 10 percent this year. If the top 1% of taxpayers had continued to pay the same effective tax rate they paid in 1986 every year from 1987 to 2008, the federal debt today would be $1.7 trillion lower. ….
It is not class warfare to suggest that the richest 1% of people in society pay one-third of their income to the federal government, as they did under Ronald Reagan. … Higher effective tax rates on the rich could even be achieved without raising the top tax rate bracket to 50%, as it was under President Reagan. There are many tax preferences that largely benefit the well-to-do that could be scaled back to avoid raising marginal rates.
The important thing is for people to accept that we can no longer afford such low effective tax rates on those with the greatest capacity to pay at a time when total revenues as a percentage of G.D.P. are at their lowest level in 60 years and we are facing a debt crisis. The issue is not whether the rich should pay more, but how best to accomplish it.
8 responses to “Bartlett: The Rich Can Afford to Pay More Taxes”
That would be fine and dandy if the increased revenue was used to reduce the debt. But the evidence shows that when revenue increases spending increases, unfortunately not at the same rate.
For all the rich begging to pay more taxes, I will listen to you the day that you stop using schedule A deductions and take the standard deduction. That tells me that you are serious.
What the “rich” (a term the definition of which is highly subjective, most frequently being defined as anyone who has more than the definer) can “afford” to pay really isn’t the issue. “From each according to his ability, to each according to his needs,” is an economic model that has proven to be a failure. The issue is how to get our economic house in order, and raising taxes so that we can continue to spend beyond what is rational is at best a highly suspect approach.
On a more technical note, comparing marginal rates from different times is less than honest unless you also adjust for the differences in the calculation of taxable income. The reduction of rates in the 1980’s was accompanied by the elimination of numerous deductions.
I’ve seen many people argue that the rich (such as Buffet) should just pay more taxes if they want to or write a check to the Treasury. I personally think that the current Social Security system is similar to a Ponzi scheme, as benefits have little relation to the amount of money that you put in and it depends on the expansion of the pyramid’s base. I believe that many of my fellow conservatives feel the same way, but I don’t expect any of us to not cash those checks from the SS adminstration when we retire. You can rail about how change is needed without unilaterally lowering your own quality of life.
I do agree that increased revenue will almost certainly lead to even larger spending increases, although that’s hard to imagine given our current deficit.
Perhaps the “rich” could pay a higher effective marginal rate, especially on unearned income. However, how can you have a “fair” system when more than half of all taxpayers pay no income tax (granted, many are paying employment taxes), and of this half, 40% actually receive money back in some form of entitlement (SSBs, Medicare, Medicaid, refundable tax credits, etc.)?
Tag the funds to pay the deficit- then tax the top 1%- not an income tax but a NET WORTH tax. The income tax is too easy to dodge and they really pay capital gains tax at 15%. The top 1% own 40% of the assets, they need to own 40% of the debt.
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Bruce Bartlett, the Denethor of the Right, has concluded that against the power that has arisen in the Welfare State,…
The rich guy still won’t be picking up the tab, revisited
Bruce Bartlett, the Denethor of the Right, has concluded that against the power that has arisen in the Welfare State,…
The rich guy still won’t be picking up the tab, revisited
Bruce Bartlett, the Denethor of the Right, has concluded that against the power that has arisen in the Welfare State,…
The rich guy still won’t be picking up the tab, revisited
Bruce Bartlett, the Denethor of the Right, has concluded that against the power that has arisen in the Welfare State,…
The rich guy still won’t be picking up the tab, revisited
Bruce Bartlett, the Denethor of the Right, has concluded that against the power that has arisen in the Welfare State,…
The rich guy still won’t be picking up the tab, revisited
Bruce Bartlett, the Denethor of the Right, has concluded that against the power that has arisen in the Welfare State,…
The rich guy still won’t be picking up the tab, revisited
Bruce Bartlett, the Denethor of the Right, has concluded that against the power that has arisen in the Welfare State,…