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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Tom Clarke who wrote (325239)	12/3/2002 6:04:35 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 769670

You are technically correct and yet are wrong in the larger sense - at the same time: WSJ, of course, tells a truth when they say that the poorest pay little in federal income tax, but they only glancingly mention the larger truth that the poor often pay as much or more than many of the richest AS A PERCENTAGE OF THEIR INCOMES in TOTAL TAXES PAID. So, the WSJ in their editorial "The Non-Paying Class" is guilty of cherry-picking statistics to make a dubious conclusion: that this allegedly 'low tax bite' taken out of the paychecks of the poor doesn't inculcate in them sufficient rage to cause them to vocally oppose our corrupt and oppressive tax system.... a dubious conclusion, at best (people I know are plenty mad about the corrupt tax codes). WSJ - "This skewed reality is the result of a growing number of absolutely legal escape hatches <for the poor>". (This sentence from the WSJ editorial also is guilty of the same crime... it ignores the vastly larger (still legal) tax loopholes available to the very rich. How many people earning under $12,000 per year can take advantage of the tax code's loopholes to go offshore and shelter their Intellectual Property's income from federal taxation, eh? ...To mention just one of thousands of loopholes available to the mega-rich. You are correct in that the WSJ editorial does not EXPLICITLY call for the raising of taxes on the poorest. What it EXPLICITLY does say in it's last sentence is that we should not lower the poor's federal taxes any more (ignoring once again all the other more relatively burdensome taxes the poor pay): WSJ - "All of which suggests that the last thing the White House should do now is come up with more exemptions, deductions and credits that will shrink the tax-paying population even further." So, in the larger sense, Krugman is correct (though guilty of trying to overly simplify the argument), the WSJ is calling for tax cuts for the rich, while keeping the tax load of the poor at the same level. This would, of course, shift more of the burden of supporting the government from the rich to the poor... who would shoulder a correspondingly greater percentage share of the federal tax load. While not TECHNICALLY a 'tax increase' (just as a Democratic vote to allow the scheduled expiration of the estate tax is not TECHNICALLY a tax increase, as it would not change existing law), it is never-the-less a shifting of tax burdens from the rich (who would get to keep their special loopholes) to the poor (who might lose some of theirs). In the loose language bandied about in politics today, it would be a 'tax increase' for the poor. If you are interested in considering the proprieties of this more, there was an excellent study recently which showed that it is meaningless to consider only statutory tax rates (as this weak WSJ editorial did) without factoring in the effects of loopholes which drastically change the average EFFECTIVE TAX RATE paid by the various income groups. Note: the tax data below is taken from 1999, the most recent year studied in detail. The Bush tax changes from 2001 will lower the effective tax rate for some of these even more than these figures below show. ---------------------------------------------------------- >>> Average effective tax rate for ALL INDIVIDUALS in 1999: 14.8%. (up from 13.1% in 1989). >>> Average effective tax rate for THE RICHEST AMERICANS in 1999 (those earning more than $110.5 million annually): 22%. (down from 30% in 1995... A 1997 tax law reduced the rate by more than 1/4). >>> Average BIG COMPANY (largest 10,000 American companies) effective tax rate in 1999: 20%. (Note - accelerated depreciation rules enacted by Congress in 2001 will reduce the effective average corporate tax rate over the next three years to 15%). (Note also: by taking advantage of the legal opportunites for stock watering afforded by our corrupt accounting code's treatment of options, some of the largest corporations haven't paid a penny of tax in years. Microsoft and Enron - to pick just two examples - haven't paid federal tax in 7 years....) ----------------------------------------------------- Message 18277845