|
The USA Today's editorial Tax Rhetoric vs. Reality
(April 17, 2009) is the perfect example of the many ways our
so-called free press distorts accurate reporting by burying details,
through exaggeration, and by omitting what should be said. To
report the average tax rate as 9.1% of income (.091) suggests that
the tea-tax demonstrators are misguided and biased. This
smells like the average as explained in graduate statistics courses: that a man
with his head in the oven and his feet in the freezer is
comfortable, - on the average. The USA Today is clearly not
free to deal with tax fairness on the average, nor to give credit to
millions of Americans who demonstrate that our government, including
both parties, do not represent our views on the average.
While one out of ten dollars in income taxes is implied as fair,
shortly thereafter the editor revises this low tax rate
upward to include all combined federal taxes to 20.7%. As an
across the board average, this is one of every five dollars going to
the federal government. To expand upon this fairness, in
California with a state income tax of almost 10%, the total in
federal and state tax is now 30%. That is three in every ten
dollars in California, and not a penny has been spent yet on food,
clothes, housing, transportation, or cell phones.
If three in every ten dollars in federal and state taxes is not an
issue of concern, but simply amounts to Tax Rhetoric, the
editorial writer is living in Wonderland, certainly not in
California. By simply waving a magic wand, the writer's lead-in 30% in federal income taxes actually becomes 30% of
taxes somewhere. Is this not an outrage? In the
writer's perverted mind it is not an outrage because this editor
and journalist is simply in the tank with Obama and friends.
Welcome to the cult in a crisis.
While income taxes account for half of the revenue collected by the
federal government, a portion of these taxes are paid by
individuals, while the balance is paid by private businesses and
corporations. Individuals who actually file and pay income
taxes know full well what they pay. Businesses and
corporations actually do not pay taxes, but imbed their taxes in the
cost of merchandise, services or benefits sold to customers.
Consequently business taxes are a hidden tax on individuals which
increase the cost of goods and services for all who deal with these
businesses. A tax on a cow or a farmer simply increases the
cost of milk, cream, beef, leather and glue, and most of the
consuming public pays little attention to these hidden costs, which
they pay directly through price increases.
In the final analysis all taxes paid on tax day are paid for by
individuals through a combination of (1) individual income taxes and
(2) hidden taxes on what one purchases throughout the year.
The following visual, Table 1, is offered for contrast using the
same
average technique as that applied by the editorial writer.
Unlike a 9.1% income tax across the board, the taxpayers in the
tenth decile (D10), those paying the most in taxes, actually pay
63% of all income taxes. This leaves only 37% of the taxes to
be paid by the remaining 90% of those paying taxes. The taxes
shown for the other nine groups are averaged, and show nine bars of
about 4% tax each. Those with working brain cells recognize this as
complete nonsense.
Table 1
The only group displayed
accurately in Table 1 is D10, while all the others represent graphic distortion through
using the average, a mean calculated across all the other groups.
Even this distortion is seriously misleading as it suggests that the
lowest groups, D1, D2, and D3 actually pay income taxes.
Transposing the entire bar graph to represent tax reality is shown
in Table 2 as published by the Congressional Budget Office.
Table 2
Cumulative Percentage Federal Taxes Paid 1999
(Projected)
|
|
|
Lest the editors and journalists in the tank have difficulty
interpreting the table, each colored area represents two deciles in
table 1. There are five
quintiles of taxpayers. As may be seen it does not represent a
straight line from left to right at 9.1%, but rises precipitously
right of the midpoint (50%) of the tax paying population.
Those left of the midpoint pay essentially nothing in income taxes,
while the bulk of all taxes are paid by those to the right.
As even this clear graph may be misinterpreted, the following pie
charts offer the same data representing tax burden, and who
carries this burden.
Table 3
Editorial rhetoric aside, the taxpayers' burden is illustrated
in pie-graph form so simple that editors and journalists who
have never had an introductory course in descriptive statistics
can still understand it. Surprise! In 1999 the
highest quintile of taxpayers paid 79% of the federal taxes.
They pay $4.00 in taxes for every dollar paid by anybody else
who paid taxes. This small group of taxpayers, 20%, are
carrying 80% of the load for everybody else. Adding the
taxes of the fourth and fifth quintiles (79% + 16% = 95%)
produces the statistical basis for a taxpayer's revolt, and
explains perfectly why many taxpayers
(40%)
are very upset.
For every dollar in income taxes paid by 60% of the population,
the folks in the highest two groups (40%) pay $19.00. That
is a 19 to 1 ratio. Yet Obama and friends suggest that
fairness has not yet been achieved, that considerably more
redistribution is needed in the name of fairness. The smaller pie chart to the right shows
the atrocious taxes of the top 10%, 5%, and 1% of taxpayers.
These same journalists will say: "Yes, but the greed of the Bush
administration and the Wall Street crowd changed all this since
1999." Absolutely wrong!
Since 1999 the actual tax burden continued to increase
throughout the Bush administration, so that they paid a bigger
share in taxes in subsequent years. The 79% shown above
for the highest quintile increased to 82.5% by 2006. Obama
conveniently overlooks this finding in his quest for fairness.
More fairness is what Bush provided, but in the name of
fairness, more is never enough when folks are looking for a free
ride.
It is past time for a good tax revolt. While the ignorant
and otherwise uninformed among us may be excused, the blatantly
biased journalists and editors in the press are complicit in
spreading lies and half-truths about tax fairness.
Together with Obama, such outright political propaganda will
kill the primary incentive in the world's most productive
economy. It amounts to
biting the hand that feeds you.
Stop to consider. Business and corporate income tax rates
are higher in the United States than in any other developed
country. For this reason businesses which are profit
driven are pushed to cut costs to cover expenses in the global
economy. It is reported that IBM will outsource 10,000
jobs (to India) in the next two months. This outsourcing
both cuts global expenses, and allows IBM to pay the highest
corporate tax rates in the world. The higher the corporate
taxes, the more American companies will outsource. This is
fairness and redistribution?
Maybe Obama will save the world through his green jobs.
According to Debug on the internet, the only high paying green
jobs out there at present are landscaping and selling marijuana.
Hello, Obama and
friends. Have you any idea where you are leading America?
Those who know what is going on will never follow your distorted
sense of fairness. Have you ever considered lowering corporate tax rates to keep American
workers employed and restore the economy? Individual
income tax rates are already skewed so badly that many
individuals, particularly Obama's Democratic appointees, prefer
not to pay their fair share of taxes.
|