Tax Cuts: Brilliant Analysis! End Tax Holiday!

4:29 pm in Uncategorized by WarOnError

The Tax Rate History is our friend.

In 2009, only 1,198,412 Americans earned more than $250K !!

Reagan’s Dawning Damned Us!

In 1982, their TAX HOLIDAY BEGAN. The tax rate dropped 20%! From

90% The tax rate, 1944 – 1964, to
70% where it remained until it dropped to
50% in 1982. Not good enough! It dropped AGAIN to
38.5% in 1987. Still not good enough. It dropped AGAIN to
28% in 1988! Bush I, increased it to
31% in 1991, Clinton increased it to
39.6% in 1993, and Bush II dropped it AGAIN to
38.6% in 2002. Still not good enough. Bush II dropped it AGAIN to
35% in 2003.

There were No Tax Holidays for the majority of us, however.
Since 1941, most income earners have paid between 20% – 28% income tax consistently!

Why aren’t the Democrats framing the issue and asking:

“How will Increasing the tax rate by a mere 4.6%, for only 1,198,412 people, create jobs?

Why continue the 30 Year TAX HOLIDAY that only those earning over $250K have enjoyed?

In this diary we will explore two things:

1. The Tax Rate History of High Earners: Do they pay too low a tax rate?

In 2009, this Table shows that only 1,198,412, a mere 1% of all wage earners, earned over $250,000. The percentage of all workers is found in the fourth column. The table is too large in its entirity:

Taxes-  Earn More Than $250K

2. The plight of most American workers while posing the question: Do 99% of Americans pay too high a tax rate? I really think they do, btw.

Review this November 15, 2010 Federal Wage Report for a clear picture of the percentage of workers for each wage level.

In 2009, here’s the above-referenced Federal Wage Report in chart form. It’s easy to see that there is a huge difference between what the majority earn and what the 1% high earners earn:

Taxes Median Income

It is really important to note that:

The Median Income in America has hovered around $25,000 since the 1980s. In 2009

40% of American’s earned less than $20,000/year;

50% earn less than $26,000/year; and

71% earn less than $42,000/year.

50% of households earn under $50,000

The number of people in poverty in 2009 is the largest number in the 51 years for which poverty estimates are available.

1 in 4 Americans require food assistance: 17 Million!

Here are the tax rates that will kick in for 2011 onward, if the Tax Cuts are allowed to expire. Of course, there are many other factors other than the tax table. For simplicity purposes, may we please keep the discussion limited to these.

As the History of Tax Tables clearly indicates, Congress has had no problem changing the tax tables over and over again, especially during the 1980s.

Tax Rates:  2000 Pre-Cut Rates

Here are the tax rates for 2010 that will sunset this year. These rates include the tax cuts Bush II enacted in years 2002 and 2003 as seen in the introduction:

Taxes-  2010 Tax Rates

Please notice the the differences between Marrieds Filing Jointly and all others. It appears that all but the Marrieds Filing Jointly are taxed at higher rates. How is this considered a fair and progressive tax rate?

Singles seemingly pay a punitive tax rate.

For years all wage earners were charged the same progressive tax rates. It wasn’t until the year 1949 that all but Marrieds Filing Jointly began to be charged different and mostly higher tax rates than the Marrieds Filing Jointly.

Sometimes you just have to see the facts, the numbers, to comprehend the degree to which we are being misinformed by politicians and the media. And, it is sad to have to even write that sentence.

With this in mind, it is easy to see that all American wage earners have always pulled their weight and paid a progressive tax rate UNTIL

The High Earner Tax Holiday began in 1982 and continues to this day.

Because of this 30 Year Tax Holiday for High Earners, America has not had the revenue

to maintain it’s antique infrastructure;

to modernize its decaying infrastructure;

to provide a carbon-reduced energy infrastructure;

to provide world class education for all qualified students;

to provide preventative health and dental care for all, or in short;

to do little other than tread water, FOR THIRTY YEARS; and

Worse,

to crumble and decay;
to imprison 1% of it’s population, those neglected children with few prospects;
to poorly educate its K-12 children;
to have 1 in 4 facing hunger;
to allow corporations to run the show because they are the only ones left with money.

All while we are asked to sing:

“We are the greatest country in the world, we’re number one.”

America is the land of the poor in 2010.

Will we fix her?

Are their enough Patriots willing to do their part? to pay their fair share?

Progressive tax rates are the Right Thing to do and work best when applied to all workers.

Certainly it is not fair to charge low income and Unmarrieds such high percentages of their low incomes. Even a 10% tax, plus 7.65% FICA equals 17% of wages. Of course we have huge homeless and hungry populations. Is it any wonder that there is a current of dissatisfaction, even anger in America? People are becoming desperate.

NOTE: If the tax cuts expire for all, the tax rate for the poorest among us will increase 5%. In today’s world of high costs for housing and health care, couldn’t those living below the poverty level be charged lower and more progressive tax rates?

Whereas, for someone earning $250,000 or more will only increase 4.6%.

Who will argue that 15% for the lowest wage earner is a greater burden than 39.6% for high wage earners?

Below are some clear pictures of how America’s progressive tax system has changed over the years.

In reviewing these two snapshots of tax history, it is really important to realize that, for the most part, the income brackets of the lowest three or four categories represent approximately 70%-90% of the working population.

Try not to let the dollar amounts play a role in the analysis as they are subjective to so many variables over time, such as cost of housing, etc.

Let’s look at 1935 for an example. All wage earners used the same progressive tax table. Certainly there were fewer moms working, but there were still millions of single people/women working. Notice that most wage earners did not pay more than 4% in Federal taxes, and that was a considerably higher rate than the prior 1920s decade:

1935 Tax Rates:

4.0% $0 $4,000*
8.0% $4,000 $6,000
9.0% $6,000 $8,000
10.0% $8,000 $10,000
11.0% $10,000 $12,000
12.0% $12,000 $14,000
13.0% $14,000 $16,000
15.0% $16,000 $18,000
17.0% $18,000 $20,000
19.0% $20,000 $22,000
21.0% $22,000 $26,000
23.0% $26,000 $32,000
25.0% $32,000 $38,000
28.0% $38,000 $44,000
31.0% $44,000 $50,000
34.0% $50,000 $56,000
37.0% $56,000 $62,000
40.0% $62,000 $68,000
43.0% $68,000 $74,000
46.0% $74,000 $80,000
49.0% $80,000 $90,000
54.0% $90,000 $100,000
56.0% $100,000 $150,000
57.0% $150,000 $200,000
58.0% $200,000 $300,000
59.0% $300,000 $400,000
60.0% $400,000 $500,000
61.0% $500,000 $750,000
62.0% $750,000 $1,000,000
63.0% $1,000,000

And let’s look at the year 1929, the end of the 1925 – 1931 RECORD low high wage earner tax rate of 25%: The HUGE Tax Holiday preceding the Great Depression:

1929 Tax Rates

1.5% $0 $4,000
3.0% $4,000 $8,000
5.0% $8,000 $10,000
6.0% $10,000 $14,000
7.0% $14,000 $16,000
8.0% $16,000 $18,000
9.0% $18,000 $20,000
10.0% $20,000 $22,000
11.0% $22,000 $24,000
12.0% $24,000 $28,000
13.0% $28,000 $32,000
14.0% $32,000 $36,000
15.0% $36,000 $40,000
16.0% $40,000 $44,000
17.0% $44,000 $48,000
18.0% $48,000 $52,000
19.0% $52,000 $56,000
20.0% $56,000 $60,000
21.0% $60,000 $64,000
22.0% $64,000 $70,000
23.0% $70,000 $80,000
24.0% $80,000 $100,000
25.0% $100,000

Yes, from 1925 – 1931 high earners paid THE RECORD LOW TAX HOLIDAY RATES in history, however, most American wage earners were not charged punitive rates like they are today.

This country cannot economically recover if

Wages remain low and highly taxed, leaving too little for disposable capital; and

High earners don’t pay a fair share of the Revenue Requirement Burdens.

IT’S NOT ROCKET SCIENCE.

And, yes, history is prescient.

For 30 years America has been the most poorly managed!

And those who want to argue that point, look around you. Your arguments are surrounded by homeless, hungry, desperately escalating facts that simply can’t be ignored any longer.

Enough with talking points.

Enough Blame the Poor and Unemployed Dogmatic Lying.

And please SUNSET the the lie that 1.1 million people will create jobs if given a miniscule tax break!

Obviously, the supply-sider, Friedman worshipping so-called Economic Brain Trust not only failed to learn from history, it seems they only improved on eroding the worst practices even further.

Of course America is presently suffering economically.

The last 30 years of economic/tax policies were worse than they were from 1925 – 1931!

This time their ill-advised, American Dream sabotaging, Economic Models insured

That the majority, 99%, would lack sufficient amounts of disposable capital,

While the high earner, 1% mini-minority got A THIRTY YEAR TAX HOLIDAY; and

Permission was given to trade debt as if it were a commodity like corn, which is why the

Impoverished wage earners were enticed/forced to create huge debt!

And NO ONE is addressing the Truth.

The “Should the Tax Cuts Expire for The Highest Earners” is Front and Center NEWS.

It’s a false flag. It’s a grain of sand on the beach of America’s socio/economic problems.

If tax cuts don’t sunset and the tax code changed to be more progressive for low wage earners, then I am ready to personally welcome you to

THE SUNSET OF AMERICA!

Brilliant.