Growls

In a “special report,” the Tax Foundation asks: “How much should the nation's tax and spending programs move money down the income scale? Unfortunately, the basic questions needed to inform that debate have not been answered: "How much are we actually redistributing right now?" and "How would President Obama's proposals change the amount of redistribution?"”

The entire report is well-worth reading, including the many useful charts and tables, but here are the report’s five “key findings:”

• Families' share of tax burdens is compared to their share of government benefits, by income class, yielding a comprehensive measure of income redistribution. Customarily, only tax burdens are analyzed by income class. We apply this framework to President Obama's Fiscal Year 2010 Budget released in May.

• In FY 2012, when President Obama's policies have taken effect, income redistribution from the top-earning 1 percent of families will rise by an average of $64,000 per family. Families in the 95th-99th percentiles would pay slightly more, almost $2,000 per family.

• On average, a family in the top 5 percent would have an additional 1.8 percent of its market income redistributed as a result of President Obama's policies (compared to baseline); for the top 1 percent only, that figure is over 3 percent.

• President Obama's policies would reduce the amount of income redistribution from families in the 60th-95th percentiles.

• President Obama's policies would increase the amount of income redistribution to families in the bottom 60 percent of the population, especially the bottom 20 percent.

In the report’s conclusion, the Tax Foundation writes:

“President Obama campaigned on a promise that he would pursue policies that promote a more even distribution of the economic pie. As our study shows, the extent of income re- distribution embedded in the policies he has outlined in his first budget as president do indeed intend to move the United States in that direction.

“For fiscal year 2012, the first full fiscal year in which President Obama’s full policy agenda would be in effect, we estimate that his policies would increase the amount of redistribution from those in the top five percent of the income spectrum to those outside the top five percent by $79 billion. The post-redistribution incomes of all other family income groups, including those in the top 20 percent yet outside the top five percent, would increase as a result of Obama’s proposed policies. We estimate that the greatest dollar amount increase per family would flow to families in the bottom 20 percent of the income spectrum.”