Why I’m a Progressive: Reason #1

wealth distribution
Whenever conservatives bring up the unfairness of progressive taxes think to yourself how fair it is that the top 10% of the U.S. population holds nearly 70% of all its wealth. Do those 10% do 70% of the production of that wealth? Are they that much better than the rest of the populace?
If %’s are not your thing, here’s another way to look at it:
Assume there are 100 people who have $100 to split up. It turns out, that in the U.S. the $100 winds up being divided as follows:
1 person gets $38.10
4 people get $5.32 each
5 people get $2.30 each
10 people get $1.25 each
20 people get $0.60 each
20 people get $0.23 each
40 people get $0.005 (1/2 cent each)
The 80 people getting less than a dollar might be a bit annoyed at the person getting $38.10.
Most programs can be paid for without raising taxes on the middle or lower classes – in fact the taxes raised on the top 10% wouldn’t even have to be that big to make a big difference. Who are Bush’s policies favoring?
SOURCES: Levy Economics Institute: November, 2003), Citizens for Tax Justice, U.S. Department of Commerce, Bureau of the Census

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8 responses to this post.

  1. Posted by Eric on September 22, 2004 at 4:20 pm

    If you are going to look at wealth for a reason to raise taxes, shouldn’t you also look at who is currently paying the taxes?
    Don’t have the figure handy, but I do believe that the top 10% of income earners pay over 90% of the taxes. Are you saying they should be paying more?
    Personally, I don’t think we should be taxing income or savings. I think we should be looking at taxing spending…
    Also, what is your defination of rich, in real dollars? (For some reason, I’ve never been able to get an answer to this question from a Liberal.)

  2. Ben, I apologize for breaking rule #1. In my defense, this is quasi-related to being a liberal (and I couldn’t find your email address).
    I found your blog from the American Street list of progressive Minnesota blogs and I wanted to let you know about the New Patriot, which is a group blog that I and a few other Minnesota liberals got together on to hopefully build a community of liberal bloggers here.
    Anyway, I’ve linked you up from our blogroll.
    Take care.

  3. I remember reading something once about how 40% of americans think they’re in the top 10%, and 60% think if they’re not now, they will be some day. I thought it gave great insight into why a lot of people don’t agree w/ overtaxing the rich. A lot of people aparently think they are the rich. :/

  4. Eric:
    Here is what I have found:
    According to the Congressional Budget Office the wealthiest 20 percent(whose incomes averaged $182,700 in 2001), saw their share of federal taxes drop from 64.4 percent of total tax payments in 2001 to 63.5 percent this year. The top 1 percent, earning $1.1 million, saw their share fall to 20.1 percent of the total, from 22.2 percent.”
    “Over that same period, taxpayers with incomes from around $51,500 to around $75,600 saw their share of federal tax payments increase. Households earning around $75,600 saw their tax burden jump the most, from 18.7 percent of all taxes to 19.5 percent.”
    That is called shifting more of the tax burden to the middle class. 64% is a lot no question but it is a far cry from 90%. Moreover, and more to the point, my main point is not to tax the top because they are the top but rather because of how they became the top (in most cases) through the toil (increased productivity) and suffering (bonus’ for layoffs) of the working stiff.
    I guess rich (top 20%) would be considered someone who makes more than $182,700 annually. I would actually consider the top 10% to be the truly wealthy though – but then you get into an entirely different debate as the tax rates on capital gains ar far less then income taxes and so they end up paying an even lesser %.
    Source: http://www.washingtonpost.com/wp-dyn/articles/A61178-2004Aug12.html

  5. Also – that last bit seems like I am about to start an uprising – I didn’t mean to come across as that crazy sounding but I don’t have time to really put my ideas of this down coherently.
    I generally consider the fact that paying both income tax and sales tax is double taxation and unfair (not to mention capital gains etc), however I do not know the best route to alleviate this. Though I know that a flat sales tax is not the way:
    “Sales taxes are generally regressive, that is, poorer people tend to pay a greater percentage of their income in sales tax than richer people, because they tend to spend a far higher percentage of their income. In some locations, items such as food, clothing, or prescription drugs are exempt from sales taxes ostensibly to alleviate the burden on the poor. Some of these exemptions (such as exemptions for clothing or prescription drugs) actually make the tax more regressive, since poorer individuals spend a smaller percentage of their incomes on these items than do richer individuals.”
    [Source: Wikipedia]

  6. Posted by Eric on September 23, 2004 at 4:36 pm

    Here is the doc from CBO that needs to be digested:
    http://www.cbo.gov/showdoc.cfm?index=5746&sequence=0&from=0#anchor
    After taking a quick (and I do mean quick), it looks like the top 1% of income earners pay just under 30% of all taxes…

  7. Eric:
    The top 1% is a far different beast than the top 10%.
    Did you know that Bill Gates alone has more wealth than the bottom 40% of Americans?
    We could trade stats all the way up until the election, and it may amuse us and give rise for good debate, but what it won’t do is decrease the disparity in America between those who run things and those who get run over.

  8. I could really care less what percentage they pay in taxes, they’ve still got a huge-ass house, a pimped-out car, and people to do everything from manage their investments to wipe their feet, and we’ve still got our apartments, ’87 Hondas, and the same towel from week to week.
    And we’re the #!$% majority! If there was ever a greater argument against optimism: no, you’re never getting a butler. That’s just the way it is.

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