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News :: Civil & Human Rights : Elections & Legislation : Political-Economy |
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U.S. Tax Policies: Who Really Pays Taxes in America? |
Current rating: 0 |
by Cheryl Woodard
(No verified email address) |
17 Apr 2004
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AskQuestions.org Questions U.S. Tax Policies Who Really Pays Taxes in America? April 15, 2004 |
(Berkeley, CA) -- Recent news articles about skyrocketing tax fraud and corporate tax dodging have prompted a high level of public concern about the overall fairness and effectiveness of our current tax system. AskQuestions.org – an online news site that addresses issues raised by public demand – released a report today on “Who Really Pays Taxes in America?”
Drawn primarily from government statistics, the report describes not only how the tax burden has shifted from corporations to private citizens over the past 20 years, but also a disturbing new twist: the richest American households pay about 30 percent less tax – which includes federal, state, and local taxes combined -- than middle-income households pay.
And the public apparently understands what’s going on: an AP poll released Tuesday reports that 49 percent of Americans believe their taxes have gone up, not down, as a result of the Bush tax cuts, considering all the new local and state taxes imposed in response to withering Federal grants to the states. A new CNN/Money magazine poll reports that “60% of Americans said the Bush tax cut did not personally help them.”
In his proposed budget for 2005, President Bush cuts another $6 billion in federal aide to states, even though 30 states already face shortfalls totaling about $40 billion next year and more cutbacks in state spending are inevitable, as well as more increases in local taxes. People may receive a $300 tax refund from President Bush, but wind-up spending $1,200 more in local parcel taxes to keep the neighborhood public libraries and schools open.
At the same time, the independent IRS Oversight Board reported that tax fraud is $311 billion dollars per year – more than federal spending on Medicare in 2003 and greater than the gross revenues of either Walmart or General Electric. The Board continually requests funding to strengthen resources for IRS enforcement, but because some of the biggest campaign contributors may be the country’s worst tax cheaters, the incentives for auditing tax cheats is nil. As a result, audits are focused on those at the bottom of the income scale.
Yesterday, David Cay Johnston reported in The New York Times that corporate audit rates have dropped by half in recent years, and noted that in 2003 the IRS conducted face-to-face audits with only seven out of 1000 corporations (compared to 29 per thousand in 1992). “If we simply collected the taxes cheaters are withholding from the system, we would have enough money to pay the college fees of every student in America, or to provide health insurance for small business employees,” says the AskQuestions.org report.
AskQuestions.org practices “bottom-up” journalism by inviting the public to submit questions. The most popular questions are handed over to professional researchers and reporters. Answering “Who Really Pays Taxes?” required the AskQuestions.org team to assemble a dozen practical suggestions from a range of experts about increasing the fairness of the tax code while also making it more effective at stimulating sustained economic growth.
Neither Presidential candidate is likely to talk about fraud and favoritism during the election campaign, but voters apparently want answers on these very issues. And the AskQuestions report frames the debate from a voter’s perspective, so that people will be armed with the information they need in order to raise their concerns with the candidates.
The full report is available online, along with the public questions and comments that prompted the article, http://www.askquestions.org/details.php?id=39
homepage:: http://www.askquestions.org |
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Re: U.S. Tax Policies: Who Really Pays Taxes in America? |
by via Znet
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Current rating: 0
19 Apr 2004
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Wealthy taxpayers bank on Bush
Holly Sklar
It would take 17 Donald Trumps to match the $43 billion net worth of
investor guru Warren Buffett, the world's second richest man. When it
comes to federal taxes, though, Buffett pays about the same rate as his
office receptionist.
"I pay a somewhat higher [federal tax] rate for my combination of
salary, investment and capital gain income than our receptionist does,"
Buffett wrote last year, "But she pays a far higher portion of her
income in payroll taxes than I do."
If President Bush's tax cuts for the wealthy keep moving forward, the
receptionist will pay a higher overall tax rate than her boss. She
already pays a higher rate in state and local taxes. In Nebraska, home
of Buffett's firm, Berkshire Hathaway, the richest 1 percent of families
effectively paid 6.4 percent of their income in state and local taxes in
2002, the middle 20 percent of families paid 9.8 percent and the bottom
20 percent paid 10.2 percent, reports the Institute on Taxation and
Economic Policy.
In Bush's home state Texas, taxes are even more regressive: the richest
1 percent paid just 3.2 percent of their income in state and local
taxes, the middle fifth paid 8.2 percent and the poorest fifth paid 11.4
percent--more than three times the rate of the rich.
Criticizing tax breaks for large investors and corporations, Buffett
recently told Berkshire Hathaway shareholders, "If class warfare is
being waged in America, my class is clearly winning."
Bush's tax policies are slashing taxes on dividends, capital gains and
estates, with most of the benefits going to the richest 1 percent.
Do you want an America where soldiers and teachers pay a larger share of
their incomes in taxes than the laziest heirs of the wealthy living off
inherited investments?
Bush surrounded himself with middle-class families to launch his tax cut
campaign in 2001. When a reporter asked why no one was representing the
top bracket, Bush laughingly replied, "I beg your pardon. I'm
representing...the top tax bracket."
George and Laura Bush reported income of $822,126 on their 2003 tax
return, putting them in the top 1 percent. Dick and Lynne Cheney topped
the Bushes with $1,900,339, including $627,005 in tax-exempt interest on
municipal bonds and $178,437 in deferred compensation from Halliburton.
Administration tax policies have been good for them, but not for the
country.
While Warren Buffett has a golden track record, Bush has a reverse Midas
touch, transforming surplus into debt. Under Buffett, Berkshire
Hathaway's per-share book value grew from $19 in 1965 to $50,498 in
2003, a rate of over 22% compounded annually--about twice the rate of
the S&P 500 stock index. Under Bush, the federal budget reversed course
from a projected 2002-2011 surplus of $5 trillion to a projected deficit
of more than $4 trillion, the Center on Budget and Policy Priorities
reports.
Federal tax revenues have fallen to their lowest level as a share of the
economy since 1950. We can't have a 21st century country with 1950 tax
revenues.
The average 2004 tax cut for the richest 1 percent--$59,292--is more
than the typical firefighter, registered nurse, environmental scientist,
social worker or police officer makes in a year.
The average top 1 percent tax cut can pay for a gold watch and a Hummer
H2, at a time U.S. soldiers are dying in Humvees in Iraq.
If extended, already enacted tax cuts for the richest 1 percent will
cost the treasury more than $1 trillion between 2001 and 2010. Those
lost revenues won't go to schools, homeland security, health care,
research, small business development or renovating the aging
infrastructure built with the tax dollars of prior generations. Bush
wants even more tax cuts.
Next time you drink safe water from your faucet, send your kids to
school, cross a bridge, use a park or library, or call 911, remember
this--if we want public services and infrastructure, we have to pay for
them. The rich already pay a smaller share of income than everyone else
in state and local taxes. Do you want that at the federal level?
If you want taxation with representation, now's the time to make
yourself heard.
Holly Sklar is coauthor of "Raise the Floor: Wages and Policies That
Work for All Of Us" (www.raisethefloor.org). She can be reached at
hsklar (at) aol.com.
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