Growls

A week ago, the Wall Street Journal wrote that “President Obama has laid out the most ambitious and expensive domestic agenda since LBJ, and now all he has to do is figure out how to pay for it.” The newspaper added that during his State of the Union earlier last week, “he left the impression that we need merely end ‘tax breaks for the wealthiest 2% of Americans,’ promising “that households earning less than $250,000 won't see their taxes increased by ‘one single dime.’" The Journal’s editorial concluded by saying (emphasis added):

“The bottom line is that Mr. Obama is selling the country on a 2% illusion. Unwinding the U.S. commitment in Iraq and allowing the Bush tax cuts to expire can't possibly pay for his agenda. Taxes on the not-so-rich will need to rise as well. (emphasis added)

“On that point, by the way, it's unclear why Mr. Obama thinks his climate-change scheme won't hit all Americans with higher taxes. Selling the right to emit greenhouse gases amounts to a steep new tax on most types of energy and, therefore, on all Americans who use energy. There's a reason that Charlie Rangel's Ways and Means panel, which writes tax law, is holding hearings this week on cap-and-trade regulation. (emphasis added)

“Mr. Obama is very good at portraying his agenda as nothing more than center-left pragmatism. But pragmatists don't ignore the data. And the reality is that the only way to pay for Mr. Obama's ambitions is to reach ever deeper into the pockets of the American middle class.” (emphasis added)

The Tax Foundation provides additional detail, derived from official IRS data, on “who pays the nation’s taxes” in two tables at their Tax Policy Blog. The two tables include such data as the effective tax rates and average tax payments for each income level from $1 - $5,000 to $10,000 or more. The Tax Foundation writes:

“In 2006, there were roughly 4 million taxpayers with incomes above $200,000—the target group for Obama's higher taxes. These taxpayers account for 39 percent of total AGI among actual taxpayers but pay 53 percent of all income taxes. The vast majority of these upper-income taxpayers—91 percent—earn between $200,000 and $1 million. These taxpayers account for half of the AGI and roughly half of the taxes paid by the "rich."

“There were about 353,000 taxpayers with incomes above $1 million. They had a total AGI of $1 trillion and accounted for $273 billion in income taxes in 2006, 27 percent of all income taxes. Just 15,911 taxpayers had incomes above $10 million. They paid $91 billion in income taxes, 9 percent of all income taxes. Their average tax payment was $5.7 million.”

It would be nice if both sides in Congress, not to mention the President, could agree to some basic facts so they could hold an intelligent discussion on federal spending and taxation rather than blabbering on about “ taxing the rich” and using the same 2% of taxpayers to pay for every last item of the welfare state.