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CONTACT: Wealth for the Common Good |
Shifting Responsibility: How 50 Years of Tax Cuts Have Benefited America's Wealthiest Taxpayers
Tax Cuts for Wealthy Individuals between 2001-2008 Cost U.S. Treasury $700 Billion
Recent Poll Shows Majority of Americans in Both Political Parties Favor Increased Taxes on Wealthy Americans
BOSTON, Mass - April 7 - In the wake of a Quinnipiac
University poll which found that 60 percent of Americans in both major
political parties are in favor of raising income taxes on households
making more than $250,000, a new report exposes how increases in tax
breaks over the past 50 years have favored the most affluent. The
report also details an Economic Tax Recovery Plan that would raise $450
billion in revenue by ending unfair tax benefits to the wealthiest
Americans. (Download the report: http://wealthforcommongood.
The study, commissioned by Wealth for the Common Good (WFCG), an
organization of high-net worth individuals and business leaders, shows
in the last decade alone, individuals with incomes over $250,000 have
received more than $700 billion in tax cuts.
Key findings in the report include:
- Over
the last half-century, America's wealthiest taxpayers have seen their
tax outlays, as a share of income, drop by as much as two-thirds.
During the same period, the tax outlay for middle-class Americans has
not decreased.
- America's
highest earners - the top 400 - have seen the share of their income
paid in federal income tax plummet from 51.2 percent in 1955 to 16.6
percent in 2007, the most recent year with top 400 statistics available.
- Tax cuts for the wealthy between 2001-2008 cost the U.S. Treasury $700 billion and were added directly to the national debt. Retaining these tax cuts for another decade will cost an additional $826 billion
"After 50 years of tax cuts by Kennedy, Reagan and Bush II, the middle
class is paying the same share of income as they did in 1960. The
richest 3 percent have gotten the gargantuan share of tax cuts," said
Chuck Collins, co-founder of WFCG.
Authors of the study propose an "Economic Recovery Tax Program," which
they project will collect some $450 billion in new revenue for the
federal government through tax increases only on individuals with
household incomes of more than $250,000. This program would also
discourage financial speculation, strengthen the overall economy, and
introduce greater transparency, fairness, and simplicity to the tax
code.
This report is part of a larger campaign by Wealth for the Common Good
to end the Bush era tax cuts, which the group says could generate some
$45 billion annually in federal revenue. Nearly 300 of America's
top-earners, along with more than a thousand other Americans, have
signed the group's on-line petition calling on Congress and President
Obama to let the tax cuts on high-income taxpayers expire at the end of
2010.
1 Comment so far
Show AllFirst, thank you for this report and its data. Very useful. I have a few responses, observations really.
One, what prevents promoting a graduated tax structure for high incomes that encourages lower incomes to save more? Specifically, the focus on incomes above $250,000 covers more people than those who make $5 million. It's easier to demagogue and scare people into thinking they'll be taxed. It would make more sense to treat income up to 1 million (or 5 million?) taxable at regular rates (e.g. 30-35%) and dollars between that amount and 50 million at 45-50%, from 50-100 million at 60% and dollars over $100 million at 90%. This would raise more revenue and be more fair to more people.
In the same way, having a zero percent capital gains for people who make less than $500,000 in W2 income if they save for homes, college, retirement makes sense. So, too, having capital gains mirror the W2 rates for people who have primarily capital gains for income. Acting as if capital gains is the same for all income groups is odd. It's not the same. Furthermore, policy should encourage the 99% of Americans who are not wealthy to save and invest. And policy should not provide a de facto loophole for lower taxes for those fortunate to live primarily or completely on interest income.
Also, these numbers boggle the mind. A $50 million dollar pay day is hard to imagine until you break it down: if they pay half in taxes they keep $25 million which invested at 5% generates $1.2 million a year or $100,000 a month. When you talk about these numbers, it might be useful to break the numbers down into something readers can compare. I certainly don't make $100,000 for doing nothing but that's what $50 million at 50% tax look like as a ballpark figure. People know what they make each month.
Finally, the balance between the individual's right to the money they earn and society's right to be repaid for the taxpayer funded investments in infrastructure that make that wealth possible, at some point society's interest outweighs the individual private interests. A 100% tax above some amount ($100 million? $300 million?) seems reasonable, too. And the same applies to estates: how can society justify giving significant sums to grandchildren and great grandchildren who barely knew the person who created the wealth and absolutely had nothing at stake in creating the wealth? The interests of society in creating an egalitarian economic and political environment clearly outweighs the personal interests of third generation and older trust fund babies.
Thank you again for a useful report.