1955: 51.2%. 2007: 16.6%.

[KansDem]

What the top 400 households in the USA paid of their income in taxes.

Pulitzer-Winning Reporting Duo Don Barlett and James Steele on "The Betrayal of the American Dream"

Amy Goodman interviews investigative reporters Don Barlett and James Steele

--excerpt--

DONALD BARLETT: There’s going to be, you know, in the coming weeks—you know better than anyone—just a constant, you know—I don’t know what you call it. But out of Washington on taxes and how we’re penalizing entrepreneurs and all of that garbage—and I say "garbage" for this reason: if people focus on two numbers—that’s all you need to do—in 1955, the top 400 households in this country, they paid 51.2 percent of their income in taxes. That’s 1955. In 2007, they paid 16.6. And everybody’s talking about a deficit. Of course there’s a deficit, and there’s going to always be a deficit until they impose the tax system that had existed in this country in the ’40s, the ’50s, the ’60s and the ’70s, in which people at the top who had money paid serious taxes. No one—but no one at the top pays serious taxes today remotely close to what their, you know, peers would have paid back in the ’60s and ’70s.

AMY GOODMAN: Journalist Nick Shaxson of your magazine, of Vanity Fair_, wrote about Mitt Romney’s fortune, called "Where the Money Lives." We spoke to returns">Nick Shaxson about how someone as wealthy as Romney has an average personal tax rate, as you were saying, of less than 15 percent.

NICHOLAS SHAXSON: This is about the U.S. tax code. This is the way that privileged people like Mitt Romney and other—and hedge fund managers and private equity titans receive their income. They receive it as a thing called carried interest, where—which many people would argue is just like ordinary income. It’s just like a salary earned by anybody else and should earn, you know, the top tax rate, but instead, for historical reasons and reasons of lobbying, it is taxed at a very low rate of 15 percent. Mitt Romney’s tax rate is a little bit lower than that. He has—for various other reasons, he has deductions and earns other kinds of income, as well. But it’s not too far off 15 percent. But carried interest is—the tax treatment of carried interest is the sort of central reason why his tax rate is so much lower than many Americans.


And a theory as to why Mitt hasn't released his tax returns? They're being "sanitized."--

DONALD BARLETT: Well, just, we need to point out, you know, all these pleas for him to release the rest of his tax returns, which every candidate has always done. And he’s, "That’s it. You’re not getting any more from me." And people wondering—

AMY GOODMAN: And his father, George Romney, set the precedent by doing it for 12 years when he ran for president.

DONALD BARLETT: Yeah, yeah, 12 years, exactly. Well, his father was kind of a straight arrow compared to Mitt. I mean, but we wondered, in the back of our minds—there may not be anything in those returns, but he may be amending them furiously. And this is what candidates do once they reach a point where, "Oh, my god, this is going to become public. We’ve got to go back and clean up the returns."

AMY GOODMAN: How do you clean it up?

DONALD BARLETT: Well, you file an amended return. And that’s not uncommon. "Aw, gee, we had a mistake here. We need to correct that."

AMY GOODMAN: And so it completely replaces the one that was there.

DONALD BARLETT: Exactly, exactly. And in our minds, we think, you know, that’s the more likely thing that’s going on here. It’s not that they’re afraid of something in those returns; it’s that they are being sanitized.

http://www.democracynow.org/2012/7/30/pulitzer_winning_reporting_duo_don_barlett

[riverwalker]

1. outrageous

when I was little I remember my Dad agonizing about owing some back taxes, it was a few hundred dollars. He had six kids to support and drove a taxi. His wages were garnished until it was paid. This is a man who stormed the beaches of Normandy, and 4 months later was captured by Germans and was POW for the rest of the war. They didn't have a diagnosis of PTSD back then, but most of our WW2 fathers had some form of it, I know he did.
Anyway, when I hear of tax avoidance shit of these pampered rich SOB's I want to go all Billy Jack on their asses.

[KansDem]

4. "They didn't have a diagnosis of PTSD back then,...

...but most of our WW2 fathers had some form of it, I know he did."

A good friend of mine says the same thing about her dad. He served on a submarine and she believes his experience contributed negatively to his relationship with her as she was growing up; they didn't have a close "father/daughter" relationship.

It still flummoxes me to hear GOPers clamor for more tax cuts for the wealthy. "Trickle down" didn't work. Neither did the Bush tax cuts. Both were suppose to enable the wealthy to "reinvest" in the USA. They didn't. Instead they invested in foreign companies and foreign countries and hid their new-found swag in secret, off-shore tax havens.

They didn't live up to their part of the bargain. It's time now for them to pay it back...

[Uncle Joe]

21. They knew about PTSD but they created different names for it. I believe they thought

changing the names of the same basic disorder decreased government/military liability because it was a "new condition" and needed studying for years to provide evidence of basically what had been known to exist at least since the early days of the 20th century.

[deaniac21]

2. Well, they did have abundant

loopholes and tax shelters. I doubt that many paid their fair share.

[slackmaster]

3. The US federal budget for 1955 was the equivalent of $68.4 billion in 2010 dollars

The 2010 budget was $3,455.8 billion in 2010 dollars.

The federal budget is more than 50 times what it was in 1955, using constant dollars.

I doubt that the top 400 households in the country today could all afford to cough up $4.3 billion per year.

[Doremus]

5. It's taken over a decade of tax cuts to build the deficit to its current level.

Had the 1%ers been paying their fair share all those years the deficit wouldn't be nearly as large today.

In 2012 dollars.

[slackmaster]

6. Yes, tax cuts have to be offset with spending cuts, or they bust the budget

Every time.

[Scuba]

7. You forgot the sarcasm thingy....

... see at my house, if we have a budget problem, we don't stop feeding our children, we don't quit sending them to school, we don't deny them healthcare.

We generate more revenues instead.

[slackmaster]

11. You generate more revenue when you can. When you can't, you cut expenses.

At least that's how I do it.

[Scuba]

12. And what's to stop us from raising taxes on the wealthiest? Aside from political will, that is.

[slackmaster]

13. There's no reason not to, but no matter how much it won't be enough to fix the long-term problem

There aren't enough people who are rich enough to cough up $1.2 trillion, which is the projected deficit for 2012.

http://www.businessweek.com/news/2012-07-27/obama-sees-deficit-down-to-1-dot-2-trillion-gdp-at-2-dot-6-percent-in-2012

The national debt is closing in on $16 trillion. The projected interest on that is more than $375 billion. I don't believe there are 400 families in this country who could cover even that.

http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

[Scuba]

14. Sure they can...

http://upload.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4036968&mesg_id=4037205

[slackmaster]

15. OK, so you break open the piggy bank and take every penny held by the top 400

You've covered the federal deficit and almost the interest on the national debt for one year.

What happens the next year, when those 400 are gone and so is the tax they were paying on capital gains on their investments that were seized?

[Scuba]

17. Why would you stop at 400? Why not tax the top 10%... and tax them and tax them....

... until they're only "fabulously wealthy"?

[slackmaster]

19. Taxing the rich is fine. I'm all for it. The problem is if the spending problem isn't addressed,

Sooner or later they'll decide that you and I are rich.

[Scuba]

22. They already decided that, hence I pay a higher percentage of my income in taxes than Rmoney.

If you want to look at spending, start with the military, not SS and Medicare.

[slackmaster]

24. I agree with you on the priorities. We've pissed away TRILLIONS on counter-productive wars.

Worse than useless.

[ThomThom]

30. that is it we got to stop spending all this money on war

there is plenty to cut

[HiPointDem]

9. $10 million each?

[slackmaster]

10. I meant 400 families paying $4.3 billion annually per family

That would pay for roughly half of the present federal budget. Please check my arithmetic. I'm pretty sure there aren't more than a handful of families who could afford an annual tax bill that high.

The key point that seems to get ignored whenever these "Gee Whiz! Look at how much higher tax rates were for the super rich back in the Before Time!" posts overlook is this:

The rich have certainly gotten richer, but the growth of their wealth pales in comparison to that of the federal government. The federal budget is more than 50 times as big as it was in 1955, using constant dollars.

I'm not saying that the massive expansion of government is a bad thing, but it has gotten so big that it can't be carried on the shoulders of the wealthy as it was in the past. The wealthy aren't wealthy enough to foot the bill. To sustain a central government as big as we have now, the middle class has to carry a heavier load than it did in the mid 1950s. And so it is.

[hfojvt]

16. it's not ALL about the Fab 400

but they do make a good example. 51.2% vs. 16.6%

http://journals.democraticunderground.com/hfojvt/123

The cummulative loss since 1995, including 4% interest, totalled $88.7 billion in 2007. Again, a mere drop in the deficit bucket, but the fab 400 are also just the tip of the wealthy iceberg.

Their share of income was just 1.59% of all income. That is way up from the .49% it was in 1995, but still a fairly small slice. In 2005, those with incomes over $10 million (and there were 13,776 such families, including the fab 400) got 5.1% of all income. A table follows

income - number - percent of income (2005 IRS data)
>10,000,000 - 13,776 - 5.1
>5,000,000 - 21,431 - 2
>2,000,000 - 84,070 - 3.4
>1,500,000 - 56,615 - 1.3
>1,000,000 - 127,925 - 2.1
>500,000 - 524,506 - 4.8 (total 18.7% to top .67% of filers)
>200,000 - 2,737,802 - 10.6 (total 29.3% to top 2.67% of filers)
<25,000 - 57,898,144 - 9.2
all filers - 134,372,678

The families in the top 10% had 48.6% of the taxable income in 2005 and they benefitted tremendously from the Bush and Clinton tax cuts.

[slackmaster]

20. Once we've pushed everyone down to the present median income, there will be only one thing left...

Invade Canada.

[hfojvt]

23. well invading Canada is always a good thing

if only to make those futhermuckers pay for what they do to North (and South) Dakota every winter.

But let's just see about that http://www.democraticunderground.com/?com=view_post&forum=1002&pid=732414

Average income of the top 50% of taxpayers is $109,400, and there are at least 55 million in that group. So their total income is $6 trillion.

So in order to close a $1 trillion deficit, we only need to take another 17% of their income in taxes.

Well that is a pretty big hit, but according to the OP, even that would still not bring the Fab 400 even close to 1955 levels of taxation.

But I know, just like Republicans, you will insist that we must eliminate the debt in just one year, only to show that there is just no point to raising taxes on the wealthy.

[slackmaster]

25. $109,400 isn't a whole lot more than I make, and I'm far from rich

Taking another 17% of my income in taxes would push me down to bare subsistence.

But I know, just like Republicans, you will insist that we must eliminate the debt in just one year, only to show that there is just no point to raising taxes on the wealthy.

No, just like anyone who understands basic arithmetic and isn't overwhelmed by large numbers I can see that we need to increase revenue AND cut spending over the long term otherwise the only way out will be to massively inflate (i.e. devalue) the currency.

[hfojvt]

26. no, it seems like a primary goal

is to avoid paying more taxes yourself

bare subsistence, indeed. Really?

So you make $100,000 a year, or $90,000 a year. Let's say $60,000 after taxes, and another $15,300 would reduce you to bare subsistence. At $45,000 a year. Bare subsistence.

Yet, that's still more than I make before taxes. I make about $32,400 a year (now) and I seem to be rolling in money. I just put another $500 into savings, have $1100 in my checking account, already put $6,000 in my IRA for this tax year, just donated $250 to the local African American museum and have spent, so far, $1200 running for office. Yet I apparently make $10,000 a year less than bare subsistence, and that does not even include the $3,382.22 talen out of my pay for taxes and $745.65 taken out for retirement.

I'm neither overwhelmed by big numbers, nor by Republican talking points.

But $109,400 is one hell of a lot more than I make, and I feel pretty rich.

[slackmaster]

27. I live in an expensive area, and am still recovering from a divorce that wiped me out

The end of my working life is looming, and I have to prepare for something they used to call "retirement." Saving money isn't a luxury for me. My savings budget is considerably more than yours, but it has to be. My primary goal is to remain financially independent for the rest of my life. Comparing your financial situation to mine is meaningless.

I'm happy for you that you can get by on such a low income. My overall income tax rate for last year was about 17%. The idea of doubling it (not just bumping up the marginal rates for the top tiers) seems outrageous to me. How are people supposed to run their family budgets if they don't have any assurance that government won't make radical changes to tax rates?

Stop changing the rules in the middle of the game.

[hfojvt]

28. such a low income

that's part of my point. I do not consider $33,000 to be low income. Not even close. Until October of last year I was living on about $11,000 a year - and was still fairly rich. I mean, I have three dogs, high speed internet, a subscription to a genealogy service, belong to Kiwanis, etc. Spent $3,000 running for Congress.

Okay, that last part came out of some windfall profits from a land sale. (At least a windfall to me - a whopping $20,000)

And nobody in reality is suggesting raising your taxes.

Other than a few loony-birds on the internets.

It is you who insists that unless we can eliminate the trillion dollar deficit in one year, then we have to do things like - increase the retirement age for the working poor. And cut food stamps and Liheap and tanf.

Well, before that happens, a moonbat like me would put tax increases for people like you, back on the table.

Especially considering that before Obama caved on the Bush tax cuts, you were paying something like another $1,800 in FICA taxes. Of course, I got a tax cut from that too - of $220 on my $11,000 income.

Except it was a tax increase for me, because the disgusting payroll tax cut REPLACED the "making work pay credit" which was $500. You got that $500 too, just like me. But that was thrown out in order to give you another $1,300 and to cut my $500 down to just $220.

Why yes, I do think that people like you should pay another $1,300 in taxes and that people like me should get our $280 back.

Ironically though, I am so rich that I do not even want the $280. In 2009 and 2010, I sorta donated my tax refund to the Obama administration, and to my country. Instead of getting a refund, I used line 75, apply my refund to next years taxes.

Then Obama caved on the Bush tax cuts, and I demanded all my money back. Even attached a note to the IRS that said "Ask not what I can do for my country, ask rather what people with ten times my AGI can do."

Ten times my AGI in 2008 would be - $108,591.70

[slackmaster]

29. A living wage in Kansas, but you couldn't come anywhere near buying a house in San Diego on that

And nobody in reality is suggesting raising your taxes.

Other than a few loony-birds on the internets.

I'm glad that's settled. Let's ignore the loony-birds and get on with more important things.

[hfojvt]

31. "you might think that it's hopless, beyond our control

but that's not necessarily so
can't you see there's a chance for a daring young soul
who's finally learned to say no
no, I won't be mis-used, ignored, or refused
and I won't just give up and let go." Styx

Get on with more imoortant things - like crushing the poor.

Nah, I'd rather be a loony bird who stands up for the poor, than somebody who proclaims
the poor don't matter.

I wish I could live in San Diego

because I will bet that there are lots of people living in San Diego on less than $50,000 a year.

At least, according to ITEP, 60% of California households make less than $58,000 a year. http://www.itepnet.org/wp2009/ca_whopays_factsheet.pdf

Probably some of them are in San Diego.

[hfojvt]

18. oh boy, it's the Rightwing myth of runaway spending

well, the 2012 SAUS only goes back to 1960

but in 1960, Federal government spending was 17.8% of the US GDP. In 1970, it was 19.3%. In 2007, before the Great Recession, it was 19.6%. By 2009, thanks to the Great Recession, it jumped to 25%.

Meanwhile, revenues in 1960 were 17.8% of GDP and in 1970 19% of GDP. By 1985, had been cut to 17.7%. By Clinton's last year, receipts were 20.6% of GDP and spending was 18.2%. By 2004, receipts had been cut to 16.1% and spending raised to 19.6%. Now fallen to 14.4% thanks to continued (and new) tax cuts and the great recession.

Of course, that is a little bit deceptive, since it includes payroll taxes in total revenue. Thus it hides how much income taxes, particularly for the rich, have been cut. In 1980, for example, income taxes were 154% of FICA taxes. By 1990, income taxes had been cut (for the rich) and FICA taxes raised (for the working class) so that income taxes were only 123% of FICA taxes.

[HiPointDem]

8. kr & fuck them all