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Monday, January 26, 2009

It Starts

Ken Kerr Bio

It didn't take long for the GOP to try and spoil the party. People were still finding their way home from last Tuesday's Inauguration before Limbaugh unpatriotically wished for the complete failure of our new president. Then our former Governor, Robert Ehrlich, told us in Wednesday's Washington Post that we were so "caught up in the historic nature of the moment but blind to the substance of the speech" which, according to Ehrlich is a call for class warfare.

Ehrlich appeared later that evening on the CNN program "1600 Pennsylvania Avenue" where David Shuster asked him about the class warfare and how it can be possible for the middle and working class to engage in "war" on the wealthy. Ehrlich replied, in his unfortunate Baltimore accent, that the top 1% wealthiest Americans now pay 40% of the income tax, and that sounds like warfare to him.

Shuster let it go; I can't. We can't. We can no longer let them Limbaugh-logic us. We can no longer let them play fast and loose with the facts, cherry-pick data, and distort reality.

Ehrlich said "income tax." The top 1% pay 40% of "Income" tax. It's not only untrue, it is deviously deceptive and deliberately designed to make middle and low income earners feel sorry for the wealthy and guilty about not holding up our end.

Limbaugh blustered, "And, of course, when there's a tax cut that comes down, it's inevitable that the people who pay taxes get the tax cut. And I forgot the number off the top of my head, but we're up to now something like 38% of all taxes are paid by the top 1%. How can you have a tax cut and those people not get one? And if the purpose for the tax cut is to stimulate the economy the people that pay the taxes have got to get the tax cut.

"The tax cuts . . . reduced tax rates for people in all income brackets but they had a disproportionate effect on people at the very highest levels because they had already been paying a disproportionate share of total federal taxes and in part because stock dividends get a special lower rate."

Disproportionate as compared to what? Feudalism? reports "The top 1 percent of all households got 18 percent of all personal income and paid nearly 28 percent of all federal taxes in 2005, according to the Congressional Budget Office."

According to Stephen Moore of The American, the wealthiest 1% of the population earn 19% of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes. These are proportions of the income tax alone and don't include payroll taxes for Social Security and Medicare.

That's right. But notice how Moore refers to "19% of the income but pay 37 percent of the income tax. " There are other taxes besides "income tax." The wealthy know this all-too-well. Actually, CBO calculates that the top 1 percent paid only 27.6% percent of all federal taxes.

One big tax that lower and middle income earners pay is Social Security—that and Medicare/Medicaid. Most of us pay 6.2% on our earnings for Social Security and 1.45% on our earnings for Medicare. However, that is only for the first $102,000 of yearly earnings. That means most of us (me) pay a tax of 6.2% on every dime we earn while the wealthy get a 6.2% tax cut for every dime beyond $102,000. And for the top 1%, that goes FAR beyond $102,000.

The CBO states that the top 1% pay 4% of those taxes. I think they can afford it. But, we are fighting on their ground and according to their rules. We should be looking at this differently.

Here is how we should be looking at this. Let's take it a-step-at-a-time:

America's 112 million families had combined wealth of $50.3 trillion in 2004.

When those families are ranked by the size of their wealth, however, the top 1% alone held $16.8 trillion in wealth.

That is more than a third of the United States' total wealth

It is also more than the $15.3 trillion held by the bottom 90% of U.S. families.

The top 1% had average wealth of $15 million per family in contrast to the $22,800 average wealth of the least wealthy 50% of families or the $313,500 in wealth for families ranked between 50% and 90%.

You got that? According to Ehrlich and Limbaugh, we are supposed to feel sorry for and grateful to the top 1% who have an average family income of 15-million-dollars-a-year!

Put another way, does it seem fair that 5% of the people have 95% of the wealth, yet pay only 50% of the taxes? Yet, 95% of the people live on 5% of the wealth and have to come up with the other 50%.

Our new President said in his inaugural address that we "will restore science to its rightful place." After a prolonged period of anti-intellectualism in the United States, we can no longer let these conservative sophists frame the argument, set the rules for discourse, and control the language.

Let's start with this nonsense about an unfair tax burden on the obscenely wealthy.


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