Big Lie: The Rich Get Richer, The Poor Get Poorer

[OohPooPahDoo]

The rich get richer and the poor get richer too. There is a huge difference between being poor in America and being poor anywhere else in the world. Except for Greece and we know how that turns out.

Depends on where in the world you're talking about.

The bigger injustice I think is the difference between our lower middle class and those in other nations. We do a good job of taking care of the poor here, its the next level up that gets the shaft. Not poor enough to qualify for medicaid - not enough money to buy health insurance. Its a problem. One the right wing has never ever ever wanted to fix.

 

[Wry Catcher]

Remember, the taxpayer in the highest bracket pays the same rate as the middle class taxpayer on the same earned income. The former simply pays more taxes and at a higher rate than the latter

I got this story from Thomas Sowell's latest column, and am including a link to the CBO study he cites.

Perhaps the biggest lie of this election year, and the one likely to be repeated the most often, is that the income of “the rich” is going up, while other people’s incomes are going down. If you listen to Barack Obama, you are bound to hear this lie repeatedly.

Question: How do we know if all of the income by the 'rich' is earned income per the tax laws, or if the tax laws favor investments not available to the non rich? How do we know, for example, how much income is earned in foreign accounts and never reported? [side note: why is the right so concerned with voter fraud and not with tax cheats?]

But the government’s own Congressional Budget Office has just published a report whose statistics flatly contradict this claim. The CBO report shows that, while the average household income fell 12 percent between 2007 and 2009, the average for the lower four-fifths fell by 5 percent or less, while the average income for households in the top fifth fell 18 percent. For households in the “top one percent” that seems to fascinate so many people, income fell by 36 percent in those same years.

Why are these data so different from other data that are widely cited, showing the top brackets improving their positions more so than anyone else?

The answer is that the data cited by the Congressional Budget Office are based on Internal Revenue Service statistics for specific individuals and specific households over time. The IRS can follow individuals and households because it can identify the same people over time from their Social Security numbers.

Most other data, including census data, are based on compiling statistics in a succession of time periods, without the ability to tell if the actual people in each income bracket are the same from one time period to the next. The turnover of people is substantial in all brackets — and is huge in the top one percent. Most people in that bracket are there for only one year in a decade.

Thomas Sowell: Big lies in politics - Conservative News

CBO | The Distribution of Household Income and Federal Taxes, 2008 and 2009

Why do I think he's right, and we won't be hearing Obama present these facts?

As we all know there are damn liars, liars of omission and commision, and statistics. Missing in this thread's OP is an analysis leading to the conclusion; one which knowing the body of work by Sowell I suspect was decided before the research commenced.

That said, in the link provided it is reported that:

"Because average federal tax rates rise with income, the share of federal taxes paid by higher-income households exceeded their share of before-tax income, and the opposite was true for lower-income households.

In 2009, the shares of federal taxes paid by households in certain income quintiles were:
Lowest quintile: 0.3 percent
Middle quintile: 9.4 percent
Highest quintile: 67.9 percent

Declines in before-tax income among households in the top income percentile lowered their share of tax liabilities from 26.7 percent in 2007 to 22.3 percent in 2009."

An honest and factual explanation of wealth and poverty in America, or the health of the economy cannot be stated by simple cause and effect relationships (e.g. tax policy) for the economy is multifaceted and is impacted by many variables.

 

[Wry Catcher]

bump, see above

 

[chanel]

As a result, the top two income tax rates are already scheduled in current law to increase by nearly 20 percent; the capital gains tax rate is slated to soar by nearly 60 percent; the tax rate on dividends will explode to nearly three times its current level; the Medicare payroll tax rate will rocket up by 62 percent for disfavored taxpayers (the nation's job creators, investors, and successful small business entrepreneurs); and the death tax will rise further from the grave with a 57 percent increase in the top rate.

The American Spectator : No, Romney Won't Raise Your Taxes $2,000

Happy now? Or not enough?

How about 100%?