Catastrophe - Dick Morris [23]
And it wasn’t only the very rich who assumed a vastly disproportionate share of the nation’s finances. The top quarter of Americans paid 73 percent of income taxes in 1980, but by 2006 their share of income taxes paid rose to 86 percent.77
* * *
SOAKING THE “RICH”: PERCENTAGE OF FEDERAL INCOME TAXES PAID BY…
Top 1% (above $389,000) Top 25% (above $65,000)
1980 19% 73%
1985 22% 74%
1990 25% 77%
1995 30% 80%
2000 37% 84%
2006 40% 86%
Source: Gerald Prante, “Summary of the Latest Federal Income Tax Data,” TaxFoundation.org, July 18, 2008, www.taxfoundation.org/news/show/250.html.
* * *
Of course, there’s no need to weep for the rich. The past thirty years have seen an incredible concentration of wealth at the very top of our social pyramid. Since 1980, the share of total national income that went to the top 1 percent of our population has almost tripled, from 8 percent to 22 percent.78 At the same time, the proportion earned by the poorest half dropped from 18 percent in 1980 to 13 percent today.79
* * *
THE RICH GET RICHER AND THE POOR GET POORER: PERCENTAGE OF NATIONAL INCOME THAT WENT TO…
Year The Richest 1% The Poorest 50%
1980 8% 18%
1985 10% 17%
1990 14% 15%
1995 15% 15%
2000 21% 13%
2005 22% 13%
Source: Gerald Prante, “Summary of the Latest Federal Income Tax Data,” TaxFoundation.org, July 18, 2008, www.taxfoundation.org/news/show/250.html.
* * *
So there are really three classes of taxpayers in the United States:
The tax payers: The top 25 percent, who pay 86 percent of federal income taxes
The tax neutrals: The middle 25 percent, who pay the rest
The tax eaters: The bottom 50 percent, who pay no income taxes and get refundable tax credit checks from the government
Politically, only a distinct minority—the top 25 percent or, really, the top 1 percent of the country—face any significant tax liability. Giving the lie to Benjamin Franklin’s lament that the only two things you can’t avoid are “death and taxes,” the bulk of the American population escapes most of the tax burden—and half get away without paying income taxes entirely.
During Obama’s presidential campaign, he promised to cut taxes for 95 percent of all Americans.80 Many were inclined to dismiss his suggestions as political pandering and unrealistic promises. But he meant it. His goal is to cut the taxpaying proportion of the American population to a minority, leaving an electoral majority that is immune to antitax rhetoric.
What will be the impact of this brave new world of tax policy? What might happen as Obama’s policies unfold and more and more Americans end up paying no taxes?
Inevitably, taxes will fade as an issue in American politics. Most people won’t have to pay them. The mass political base of middle-class taxpayers will disappear. Concern about taxes will be the political province only of the outvoted rich.
The antitax movements of the late 1970s and early 1980s, which culminated in the Reagan Revolution of 1980, were based on the outrage of the Joe the Plumbers of an earlier age. The blue-collar worker burdened with high taxes—which he suspected were going to pay welfare mothers who were being paid for not working—formed an infantry that stormed the nation’s political system and demanded cuts in taxes. The Silent Majority of the Nixon years became the Reagan Democrats of the 1980s—the dominant political forces of their eras. Turning their backs on their liberal past, these workers, often contradicting their union’s policy, broke with the Democratic Party and embraced Reagan’s dogma that the government was the problem, not the solution to, America’s ills.
But no more.
Obama and the Left have come to realize that the Achilles’ heel of the antitax movement is its reliance on middle-income voters to win tax cuts that will go largely to upper-income taxpayers. Obama was the first to capitalize on this insight, getting elected on an overt plan