Mary Katherine Hamm at Hot Air

Citing figures indicating that more than 100,000 federal employees owe more than $1 billion in federal taxes, a House committee on Wednesday approved legislation that would require the firing of government workers who are “seriously tax delinquent.”

The legislation, introduced by Utah Rep. Jason Chaffetz, advanced through the House Oversight and Government Reform Committee. It now has to pass the full House to be implemented into law.

“Most taxpayers file accurate tax returns and pay the taxes they owe on time, regardless of their income,” Chaffetz, a Republican, said during the hearing Wednesday. “Federal employees and individuals applying for federal employment should do the same.”

The bill offers exceptions for those employees and applicants demonstrating financial hardship and making good faith efforts to settle up. You’d think our friends in the fair share party would be all over this, but it turns out they only like to demonize people who are already paying their taxes. Asking the bare minimum of federal employees isn’t their bag:

Democrats on the committee opposed the bill. Maryland Rep. Elijah Cummings, the ranking member on the committee, said the legislation “seeks to demonize federal employees rather than ensure their compliance with tax obligations.”

James Taranto at Best of the Web

‘Spending’: Letting You Keep Your Own Money
“The Real Spending Problem,” according to a New York Times editorial with that title, is that the government is letting you keep too much money:

Each year, the government doles out tax breaks worth $1.1 trillion. . . . Tax breaks work like spending. Giving a deduction for certain activities, like homeownership or retirement savings, is the same as writing a government check to subsidize those activities. Functionally, they mimic entitlements. Like Medicare, Medicaid and Social Security, they are available, year in and year out, in full, to all who qualify.

This is nonsense. Consider the tax deduction on home-mortgage interest (not homeownership per se). If it worked like Social Security, the government would simply pay part of your mortgage each month or send you a check to offset the cost. Instead, you get to deduct the interest from your income before paying taxes. If you have little or no income–say you’re retired and living off savings, or you have a big capital loss one year–you get no benefit.

There are good economic and individual-freedom arguments against these sorts of tax deductions and credits, but not because they constitute “spending.” A better way of looking at them is that they are the equivalent of a tax on not engaging in certain behavior. Seen through this lens, the mortgage-interest deduction is a tax on renters, and for that matter on homeowners who are debt-free…

I love Maher’s “I just saw these statistics…” Just now? Perhaps it’s best to know a few things before commanding a soap box.

Debra Saunders:

“Why this fat cat likes Obama’s tax plan” was the headline of a full-page ad La Jolla, Calif., investor Norman Lizt took out in The New York Times in August.

No, it wasn’t really an endorsement. Lizt wrote that he has been a successful investor over the years, but if Americans re-elected President Barack Obama and his proposed tax hike became law, Lizt would face a marginal tax rate of “well over 50 percent.” He wrote, “This represents the crossing of an inviolate threshold to me and is entirely unacceptable.”

Lizt explained that he liked Obama’s tax plan because it would prompt him to shutter his business, move his money into low-risk investments and give less to charity — while he would devote his time to traveling the globe with his fiancee, Rachel Martin.

I emailed Lizt to see whether he had made good on his warning. When we spoke Tuesday, the 71-year-old told me that he and Rachel had just returned from a two-month trip around the world. He told me he had closed down his business that invested in small-capital concerns that created jobs, even medical breakthroughs.

“We did very creative work,” Lizt said. “Now we’re just going to do very boring conservative land investment.”

“Maybe I’ll never have income again,” Lizt told me. “That’s the way I want it. ‘No Income Norman.’”

Somehow I don’t think Obama cares.

The bitter irony is if you call the IRS with a question, then call back five minutes later, you’re likely to get a different answer.

So who licenses the IRS employees?

Howard Dean:

The only problem is — and this is initially going to seem like heresy from a progressive is — the truth is everybody needs to pay more taxes, not just the rich. And it’s a good start. But we’re not going to get out of this deficit problem unless we raise taxes across the board, to go back to what Bill Clinton had and his taxes. And if we don’t do that, the problem is the pressure is going to be on spending even more.

Dean is right: the middle class must pay more if we want to keep entitlement programs alive — there just aren’t enough rich people to plunder.

Middle class people take more out of Medicare than they pay in, so the difference must come from somewhere.

The Bush tax cuts were temporary for a reason. They came after the tech investment bubble artificially, and temporarily, inflated federal revenues. Then the bubble burst and 9/11 happened.

Let them expire.

If I understand Dean’s about “pressure” he means pressure on spending less on more government programs. That we don’t need.

Glenn Harlan Reynolds in USA Today

As we careen toward the “fiscal cliff,” the House GOP faces a problem. Obama won’t offer his own detailed plan which will involve big tax increases, until they offer their own plan — which, Obama says, must contain big tax increases or he won’t offer his.

That’s a mug’s game. Some have suggested that the House GOP should just walk away and let the nation go over the fiscal cliff. But I have some better ideas.

Truth is, Obama’s not really a key player here. All that he can do is sign or veto whatever legislation comes to him. And since under the Constitution money bills originate in the House, even the Democratic Senate will have to accept, reject or amend whatever the House sends. So if Speaker Boehner et al. are smart, they’ll send something that will be awkward, but politically damaging to reject. My advice:

1. Adopt the Bowles-Simpson Plan. The plan was the product of a bipartisan commission, chaired by Democrat Erskine Bowles and Republican Alan Simpson, appointed by President Obama to address America’s ballooning deficits and national debt. Most experts agree that it’s a pretty good plan. President Obama didn’t like it because it shrinks government too much.

Tough. It’s a plan, which is more than President Obama has offered, and from a bipartisan commission he appointed. Can Obama get away with vetoing that? Can Senate Democrats get away with rejecting it and bringing on the automatic cuts and tax increases of the sequester? Doubtful. Plus, though the press tends to cover for Obama and blame Republicans, media types love Bipartisan Commissions.

2. Tax the revolving door. I mentioned earlier that Washington is (more…)

Mark Thiessen:

With the “fiscal cliff” looming and no “grand bargain” in sight, talk in Washington has turned to a “down payment” — a package of spending cuts and revenue increases that would help us avoid the cliff and give leaders more time to strike a long-term deal. House Speaker John Boehner says such a mini-deal would serve as “a down payment on — and a catalyst for — major solutions, enacted in 2013, that begin to solve the problem.”

Unfortunately, the opposite is true. Passing a down payment now could very well doom the chances for major tax and spending reforms next year.

Since Republicans are (for the moment) holding firm to their opposition to raising tax rates, the only way to increase revenues in a down payment is to close loopholes and limit or eliminate deductions — something Republicans have expressed a willingness to do as part of a larger deal for tax and spending reform.

As the Wall Street Journal recently pointed out, there’s a lot more revenue here than most people realize. According to the liberal Tax Policy Center, capping all itemized deductions at $50,000 a year would yield $749 billion in extra revenue over 10 years — almost as much as the $823 billion that President Obama’s plan to raise tax rates on top earners would yield in the same period. Moreover, such a cap would soak the rich first. The top one-fifth of income earners would pay more than 96 percent of the higher taxes.

If you lower the cap on deductions even further to $25,000, there’s even more revenue to be found — an additional $1.286 trillion over 10 years. And a $17,000 cap would raise an additional $1.747 trillion in a (more…)

MATT LAUER, TODAY: So bottom line, would raising taxes on the wealthiest Americans have a chilling effect on hiring in this country?

WARREN BUFFETT: No, and I think would have a great effect in terms of the morale of the middle class, who have seen themselves paying high payroll taxes, income taxes. And then they watch guys like me end up paying a rate that’s below that, you know, paid by the people in my office.

The rich pay high tax rates and an outsized portion of federal income taxes.

Two, you don’t raise taxes on anyone to make someone else feel good.

Washington Examiner

There is simply is no way around it: Your taxes are going up on New Year’s Day. Whether you are a wealthy individual who is about to be hit by President Obama’s tax hike on the rich, or one of the millions of working Americans whose payroll taxes will rise, you are about to see government take more from your paycheck. The only question is how much more it will take.

Tax revenue as a percentage of gross domestic product is currently at historic lows. In 2011, the federal government ate up 15.4 percent of the U.S. economy in taxes. That was up from 15.1 percent in both 2010 and 2009, which were post-1950 lows. The reason is that we’re in the weakest economic recovery since World War II. As the economy improves, tax collections will grow, but history indicates there is an upper limit as to how high they will get.

Liberal columnists love to point out that the top marginal rate on personal income was 91 percent in the 1950s and in the early 1960s. But the tax code back then was also chock-full of loopholes and benefits that let top earners escape such stifling tax burdens. As high as top marginal rates were, taxes as a percentage of GDP never rose above 19 percent, and in fact fell as low as 14.5 percent.

In fact, since World War II, federal taxes as a percentage of GDP have never risen above 20.6 percent and have averaged just under 18 percent. This has been consistent, regardless of changes to tax rates.

Spending has always been the main driver of U.S. budget deficits. It has fluctuated far more than taxes, falling as low as 14.2 percent of GDP under President Truman and rising as high as 25.2 percent under Obama. (more…)

After winning by a whisker, it was inevitable that Obama would claim a mandate.

So it’s tax the rich, cried the nation!

WSJ:

If that was an olive branch, we’d hate to see the bludgeon. We’re referring to President Obama’s appearance on Friday in the White House East Room, his first public remarks since his re-election Tuesday. If the President wanted to send a gesture of magnanimity in victory, this wasn’t it.

Though the campaign is over, the event was staged like a campaign event, complete with a multi-ethnic backdrop for the cameras, a cheering crowd and no media questions. The President said he is “open to compromise” and isn’t “wedded to every detail” of his budget proposals. He invited Congressional leaders of both parties to the White House to talk next week.

But that was about the extent of his bipartisan outreach. Most of the speech repeated what he was saying in Ohio two weeks ago. And on the vexed question of taxes, the central dispute in the debate over the looming 2013 fiscal cliff, Mr. Obama said he will insist that taxes go up on anyone who makes more than $250,000 a year.

We took it as a hopeful sign at first that Mr. Obama didn’t mention “tax rates.” That could leave some room to compromise with House Speaker John Boehner, who said this week he’ll consider more tax revenue without raising tax rates. But later on Friday, White House spokesman Jay Carney said the President will veto any bill that includes an extension of the current tax rates for those earning more than $250,000.

Mr. Obama also demanded that House Republicans immediately pass a Senate bill extending current tax rates for lower incomes but not for everyone else, including the millions of small businesses that pay taxes at the individual rates. (more…)

Erika Johnson at HotAir

Mitt Romney’s campaign released his 2011 tax information this afternoon, as well as a notarized letter from PriceWaterhouseCoopers attesting to Romney’s tax rates from 1990-2009, and I must say: Well played, Romney campaign. Well played, indeed.

The Democrats have been making a federal case of Romney’s supposed “tax secrecy,” with countless ads and speeches and the voice in Harry Reid’s head making Romney out to be a greedy, tax-evading corporate mastermind of epic proportions, but the Romney camp just let them huff and puff until they wore themselves out, and now they’re releasing the information on their terms. I’m sure the Democrats will find some stupid, populist way to continue to criticize Romney over this, but… BAZINGA:

Regarding the newly-filed 2011 Tax Return:

-In 2011, the Romneys paid $1,935,708 in taxes on $13,696,951 in mostly investment income.

-The Romneys’ effective tax rate for 2011 was 14.1%.

-The Romneys donated $4,020,772 to charity in 2011, amounting to nearly 30% of their income.

-The Romneys claimed a deduction for $2.25 million of those charitable contributions. …

Regarding the PWC letter covering the Romneys’ tax filings over 20 years, from 1990 – 2009:

-In each year during the entire 20-year period, the Romneys owed both state and federal income taxes.

-Over the entire 20-year period, the average annual effective federal tax rate was 20.20%.

-Over the entire 20-year period, the lowest annual effective federal personal tax rate was 13.66%.

-Over the entire 20-year period, the Romneys gave to charity an average of 13.45% of their adjusted gross income.

-Over the entire 20-year period, the total federal and state taxes owed plus the total charitable donations deducted represented 38.49% of total AGI.

During the 20-year period covered by the PWC letter, Gov. and Mrs. Romney paid 100 percent of the taxes that they owed.

So, let’s just take a second here to process this. Mitt Romney, who is ostensibly uncaring, out-of-touch, and disdainful of poor people, gave more than 13 percent of his income (amounting to millions and millions of dollars) over twenty years to charity, and didn’t even always take the full tax deduction. (The bastard!) By at least one count, the average effective federal tax rate for Americans is 11 percent — and Romney’s average annual rate was 20 percent, also amounting to millions and millions of dollars that went into the federal government’s coffers. He has done nothing wrong or shady, unless you consider being a wildly excellent businessman to be a vice, and the finger-pointers now look pretty darn dumb.

If this isn’t it, can somebody please explain to me exactly what it is that a “fair share” is supposed to look like? Are we supposed to detest rich people, or should we admire them? Will the real Barack Obama please stand up?

And Joe Biden? Less than $400/year for more than a decade.

WSJ

The headline above is not an athletic game score, and in this contest you want to be on the lower end. We’re talking about the corporate tax rate, which Sweden’s Prime Minister Fredrik Reinfeldt has announced that he intends to cut to 22% from 26.3% as part of his next budget.

The rate cut will be partially offset by closing some loopholes, but it will leave famously high-tax Sweden with one of the lowest corporate tax rates in Western Europe. With a top marginal personal income-tax rate of 57% and government spending equal to 56% of GDP, Sweden is no free-market paradise. But over the past two decades, Sweden has cut its public debt to 33% of GDP from a high of nearly 80% in the 1990s. It has also kept the budget at or near balance.

In announcing the cut last week, Mr. Reinfeldt called the corporate income tax “probably the most harmful tax of all” because it hits job creation and business investment. Corporate income taxes almost invariably lead to double taxation, as the profits taxed at the corporate level tend to be taxed again when they are distributed as dividends or realized as capital gains on business ownership…

Today, for the first that I can remember, the Los Angeles Times noted that 47% of Americans pay no income tax. This after months of Obama demanding that the rich pay their fair share.

Of course the LAT thought they were damning Mitt because he was recorded saying:

There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax.

“A government that robs Peter to pay Paul can always depend on the support of Paul.”

Michael Barone:

One of the services of the Simpson-Bowles Commission was to set out a path for tax reform, with lower income tax rates and removal of many tax preferences or, to use the commission’s term, tax expenditures.

It’s an approach that has been tried before and worked. Ronald Reagan called for such a reform in 1984 and, after much negotiating, it was hammered out in 1986. Lead roles were played by Treasury Secretary James Baker; the Democratic chairman of the House Ways and Means Committee, Dan Rostenkowski; and the Republican chairman of the Senate Finance Committee, Bob Packwood.

It wasn’t easy work, and at one point it required an extra pitcher or two of beer at an Irish pub for Packwood and his staffers.

Mitt Romney has endorsed a similar procedure. So has Paul Ryan, who included it in the budget he steered to passage in the House.

Romney and Ryan have been criticized for not providing specifics on which tax preferences they would eliminate.

But neither did the Simpson-Bowles Commission, which said that “the precise details and exact transition rules should be worked out in a variety of ways by the relevant congressional committees and the Treasury Department.” That’s how it worked in 1984-’86…

Read it all.

Edward J. McCaffery in Stanford Law Review

…Congress wants there to be special interests, small groups with high stakes in what it does or does not do. These are necessary conditions for Congress to get what it needs: money, for itself and its campaigns. Although the near certainty of getting re-elected could point to the contrary,[1] elected officials raise more money than ever.[2] Tax reform in general, and estate tax repeal or reform in particular, illustrate the point: Congress has shown an appetite for keeping the issue of estate tax repeal alive through a never-ending series of brinksmanship votes; it never does anything fundamental or, for that matter, principled, but rakes in cash year in and year out for just considering the matter.

…

The dirty little secret is that this now standard view of politics, the special interest model, is right so far as it goes but that it does not go far enough: it does not look back in time, to consider Congress’s role in creating and perpetuating special interests in the first place. The standard view has special interests coming first, as the predator, and politicians coming later, as the prey.

The constant complaints we hear from elected officials about lobbyists reinforce this standard view. It should hardly surprise us to learn, although it seems to do so, that more often than not, Congress is the predator and special interests the prey.

Congress, after all, has monopoly power over coercive legislative action, such as taxation (the power to destroy, remember?). Just as other professionals in positions of power and influence—such as doctors, dentists, car mechanics, and lawyers—“make their own market” by creating or exaggerating a need for their services, so too can and does Congress.

Ari Fleischer

If fairness in paying taxes means the amount you pay is based on the amount you make, then the only group in America paying at least a “fair share” is the top 20%—people who make more than $74,000. For everyone else, the tax code is a bargain.

You wouldn’t know this from President Obama’s rhetoric, but our tax system, according to a recent report by the Congressional Budget Office (CBO), is incredibly progressive. Consider: The top 1% of income earners pay an average federal tax rate of 28.9%. (See the nearby table.) The average federal tax rate on the top 20% is 23.2%. The 20% of taxpayers earning between $50,100 and $73,999 pay an average 15.1%, and so on down the line. The CBO report includes payroll as well as income taxes paid.

There’s also another way of looking at fairness, and that’s the tax burden. Here, consider the top 20% of income earners (over $74,000). They make 50% of the nation’s income but pay nearly 70% of all federal taxes.

The remaining 30% of the tax burden is borne by 80% of the taxpayers, those who make less than $74,000. In short, this group’s share of taxes paid, 30%, is lower than the share of income they earn, 50%.

Yet President Obama says that “for some time now, when compared to the middle class,” the wealthy “haven’t been asked to do their fair share.”

He’s right that the system isn’t fair, but not because the top 1% pay too little. It is because they pay too much.

Mr. Obama has said that some wealthy employers pay a lower tax rate than their secretaries. True, some are able to lower their effective federal tax rate by giving millions to charity. Or because they derive much of their income as capital gains or from tax-free municipal bonds.

But middle- and low-income Americans who do not invest also pay lower rates thanks to the deductions they receive, such as a $1,000 per child tax credit (which phases out for couples who make more than $110,000), or the Earned Income Tax Credit, which no one making more than $50,000 is supposed to receive…

Robert Frank at CNBC

The presidential election has given us two myths about the rich. First, that their incomes, and income inequality, are at all-time highs. Second, that the wealthy pay less in taxes than ever, and lower taxes than the rest of us.

A recent report from the Congressional Budget Office, however, suggests that both may be false.

Let’s consider income first. Between 2007 and 2009, after-tax earnings by Americans in the top one percent for income fell 37 percent. On a pre-tax basis they fell 36 percent in the same period.

That may sound like a minor haircut for One Percenters compared to people who lost their jobs. But when you take into account federal transfers, assistance and taxes paid, the incomes of the bottom 20 percent grew by 3 percent, while it fell a modest 2 percent for the middle 20 percent.

In other words, the incomes of the top one percent fell 18 times more than the incomes for the middle class at the start of the recession.

The result of this big drop at the top was that their share of the country’s total income also fell. In 2007, the top one percent earned 16.7 percent of all after-tax income. In 2009, that portion fell to 11.5 percent.

Inequality, in other words, fell during those years.  We are now in an age of High-Beta Wealth, where the incomes of the One Percent have become far more manic and prone to wild drops than the rest of the country.

And taxes paid? Despite the oft-repeated fact that tax rates for the wealthy are at an all-time low (which is true), it’s also true that the actual amount paid in taxes by the wealthy is higher than before the recession.

TWS:

Leader Reid, when it comes to the Bush tax cuts…why didn’t Senate Democrats push through this bill back when you controlled the Senate, the House, and the presidency?

REID: The tax cuts weren’t about to expire then. So that’s why we’re doing it now.

TWS: You could have foreseen this issue two years ago.

REPORTER: What are you talking about? They expired at the end of 2010.

REID: And that’s why they were extended one year.

TWS: Why didn’t they vote when you could have pushed this bill through and had it signed into law?

REID: Next question.

New York Times

…New York’s biggest investment houses are shifting jobs out of the area and expanding in cheaper locales in the United States, threatening the vast middle tier of positions that form the backbone of employment on Wall Street.

The shift comes even as banks consider deeper staff cuts here, which could undermine the state and city tax base long term.

“Places like New York or London will remain financial centers, but most of the players are taking a much harder look and asking whether they can move large numbers of jobs,” said James Malick, a partner at the Boston Consulting Group who advises banks on relocation. In addition to higher taxes in the New York region, employers face real estate and labor costs significantly above the national average.

Consultants say they have seen a sharp pickup in this trend, known as near-shoring, as opposed to offshoring overseas. Goldman Sachs, during a presentation to investors in late May, even boasted of the cost savings that relocating jobs can bring.

“Near-shoring?” That demonstrates just how provincial New Yawkers can be — their tiny island is the world, and anything else is foreign territory.

“Some functions need to stay in the United States, but they don’t need to be in New York City or near the client,” Mr. Malick said. And with most investment giants facing anemic revenue and more stringent regulation that cuts into trading revenues, relocation is more tempting than it was before the financial crisis.

Low-level jobs have already migrated to call centers and back offices overseas, while top-end traders and bankers are secure in the New York area, experts say. Instead, services like accounting, trading and legal support, and human resources and compliance are being shifted to places like Salt Lake City, North Carolina and Jacksonville, Fla.

Wouldn’t it hilarious if Salt Lake City created a special financial business zone and named it Wall Street?

From Americans for Tax Reform

Taxpayers are reminded that the President’s healthcare law is one of the largest tax increases in American history.

Obamacare contains 20 new or higher taxes on American families and small businesses.

Arranged by their respective effective dates, below is the total list of all $500 billion-plus in tax hikes (over the next ten years) in Obamacare, where to find them in the bill, and how much your taxes are scheduled to go up as of today:

Follow the link to view the list as HTML.

Or, you can get it as a PDF here, which is much easier to send to others.

From WSJ’s Notable and Quotable

Actor Will Smith during a French television interview this week:

Smith: I have no issue with paying taxes and whatever needs to be done for my country to grow. I believe very firmly that my ability to sit here—I’m a black man who didn’t go to college, yet I get to travel around the world and sell my movies, and I believe very firmly that America is the only place on Earth that I could exist. So I will pay anything that I need to pay to keep my country growing. . . .

Interviewer: Do you know how much in France you would have to pay on earnings above one million euros [under new French President Francois Hollande's proposal]? Not 30%. 75%.

Smith: 75?! Yeah, that’s different, that’s different. Yeah, 75. Well, you know, God bless America.

Meanwhile, Jon Lovitz gets called a Nazi for criticizing Obama’s tax rhetoric.

Not just Pelosi, but the whole Dem-Cong carped during the entire Bush presidency about the “tax cuts for the richest 1%.”

Ignorant people (OWS) believed them. But now that the Bush era cuts are set to expire this year, we hear this:

At the end of the year, some $500 billion in tax breaks expire all at once, hitting American households with an average tax increase of $3,800 — if Congress doesn’t act.

The potential increases include $165 billion more from taxpayers as a result of expiration of the Bush-era tax cuts, which would push taxes from a bottom rate of 10 percent and a top rate of 35 percent to a bottom rate of 15 percent and a top rate of 39.6 percent.

The expiring cuts would hit all income groups, but those at low and middle incomes would suffer the most.

“‘Taxmageddon’ falls 70 percent on middle and low income families. That’s because 60 percent of the Bush tax cuts were for middle and low-income taxpayers,” Dubay said. The payroll tax cut was aimed at the same taxpayers.

Aha! The Bush tax cuts were across the board, taking millions off the tax rolls completely and cutting taxes mainly for the middle class.

Yes, top earners had their top rate cut as well, but the big money went to the middle class and poor.

Income inequality is a blight upon America.

It must be stamped out.

Do whatever it takes. More taxes. Salary caps. Seizure of bank accounts. You name it.

Because how can we as a nation abide the fact that the median income in Mississippi is $36,646 and the median income in Maryland is $69,272?

It’s just so wrong.

Mark Steyn

…there are a lot of “millionaires,” depending on how you define it. Jerry Brown, California’s reborn Governor Moonbeam, defines his “millionaire’s tax” as applying to anybody who earns more than $250,000 a year.

“Anybody who makes $250,000 becomes a millionaire very quickly,” he explained. “You just need four years.” This may be the simplest wealth-creation advice since Bob Hope was asked to respond back in 1967 to reports that he was worth half a billion dollars. “Anyone can do it,” said Hope. “All you have to do is save a million dollars a year for 500 years.”

It’s that easy, folks! Like President Obama says, all you have to do to pay off his 2011 deficit is save $3.2 billion a year for 500 years.

Even Brown’s absurd logic doesn’t add up: $250,000 times four does equal $1 million. But that assumes you get to keep your $250,000. So it probably would take more like six or seven years.

By then, Brown’s clowns would have a new definition of wealthy.

So then we’d have a new state motto: “California millionaires — you can’t get there from here.”

…any analysis of taxes paid in high tax-and-spend countries shows that the U.S. has the most progressive income tax system in the world. An inconvenient truth for the advocates of higher taxes on America’s rich is that big governments in developed countries are funded not by taxing the rich more than the U.S. does, but by taxing everybody else more.”

– Phil Gramm and Steve McMillan.

IRS numbers, table from the Tax Foundation.

Total Income Tax Shares, 1980-2009 (Percent of federal income tax paid by each group)

Phillip Klein

There were several significant developments in the budget debate this morning. House Budget Committee Chairman Rep. Paul Ryan, R-Wis., released a budget plan to put America on a sustainable fiscal course. Shortly after, the White House issued a press release blasting the budget. Then, the Associated Press reported that an analysis by the Joint Committee on Taxation — Congress’s scorekeeper on revenue — confirmed that the “Buffett rule” that President Obama had repeatedly touted in his deficit speeches, was really just a class warfare talking point and not a serious plan to tackle the federal debt.

Obama, relying on the anecdote that billionaire investor Warren Buffett pays a lower effective tax rate than his secretary, had argued that his vision for reducing the deficit involved making sure that the super rich paid their “fair share.” Hence, the “Buffett Rule.” But the JCT analysis found that a version of the rule introduced by Sen. Sheldon Whitehouse, D-R.I., would raise just $31 billion over the next 11 years. By contrast, the cumulative deficits in Obama’s budget over that time period, 2012 through 2022, are just over $8 trillion. I made a chart below to demonstrate this, though granted, the $31 billion is hard to make out.

The Brits jacked up taxes on the rich and got less revenue. Progressives never learn.

The middle class and poor are getting a great deal. Clive Crook in The Atlantic

If you ask me, Jonathan Chait, a writer I respect, has made an ass of himself in a fight he picked with Veronique de Rugy over taxes and progressivity. She offended him by saying that America’s income taxes are more progressive than those of other rich countries. Chait assailed her “completely idiotic” reasoning, called her an “inequality denier“, “a ubiquitous right-wing misinformation recirculator” and asked if it was really any wonder he cast insults now and then at such “lesser lights of the intellectual world”. (Paul Krugman said he sympathises. With Chait, obviously. The only danger here is in being too forgiving, Krugman advises. Chait may think the de Rugys of this world are only lazy and incompetent, but we know them to be liars as well.)

Just one problem. On the topic in question, De Rugy is right and Chait is wrong.

Income taxes in America are more progressive than in other rich countries–according to an authoritiative official study which, to my knowledge, has not been contradicted. The OECD’s report “Growing Unequal“, on poverty and inequality in industrial countries, includes a table that provides two measures of income tax progressivity in 2005. This is evidently the source of de Rugy’s numbers. Here they are in an excel file. According to one measure, America’s income taxes were the most progressive of the 24 countries in the sample, except for Ireland. According to the other, they were the most progressive full stop. (A more recent OECD report, “Divided We Stand“, uses different data, a smaller sample of countries and a different measure of progressivity: the results are similar.)

Before you ask, this ranking takes account of employee-side payroll tax as well as the federal income tax.

Chait first objected to de Rugy’s claim about progressivity because he thought she was inferring it from the fact that the US collects the biggest share of income taxes–45 percent of the total, col B1 in the table–from the top income decile. That would be a false inference, as Chait says, because it could be true of a country with a very unequal income distribution even if its taxes were not especially progressive. But look at the table. There was no need for de Rugy to draw any such inference, let alone try to mislead readers. All she needed to do–and all, I’m sure, she did–was glance over to the last column, which actually gives the measure of progressivity, showing the US to have the (more…)