Sunday, August 05, 2012
The Rich Don't Need More Tax Cuts
Mother Jones shows).
I have used the top chart on this blog before. It shows that the rich (the top 0.1%) already keep a higher percentage of the national income than the rich in other countries get -- and it's not just a little more, it's a lot more. The truth is that while most Americans have seen their wages remain stagnant and their buying power drop precipitously, the rich are already earning record incomes (and have a larger share of the nation's wealth than in any of the other developed nations).
The bottom chart shows the top tax rate in those same countries. Note that the top tax rate in the United States is already lower than in the other countries. That means the rich, while getting to keep a larger share of the national income, actually pay less in taxes than in other countries. And when you consider that most of the income for the rich is through capital gains rather than earned income, that tax liability goes down much further (since capital gains are taxed at a rate of only 15% -- far below the top tax rate in this country).
The rich do not need any more tax cuts (although I'm sure they would like to have them). Instead, this country needs to do two things with taxes for the rich -- tax capital gains at the same rate as earned income, and eliminate the Bush tax cuts for those making more than $250,000 a year. Just doing those two things would make our tax system much fairer and go a long way toward reducing the deficit (imposed and protected by Republican economic policies).
There are reasons why there is a vast gap in wealth between the rich and the rest of America, and the biggest of those reasons is our tax system, which allows the richest Americans to pay a smaller tax rate than the middle class has to pay. This must be fixed.