Molly Ivins has come up with a nice one:
The "death tax," as the Republicans so cleverly misnamed the estate tax, which affects 2 percent of all Americans, has now been replaced by the Bush birth tax -- if you're born in this country, you're in debt -- you have to help pay back the money the Bushies took out of Social Security, plus the interest on the debts they're running up.
Actually, that 2 percent figure is a bit misleading. First of all, that will continue to decrease as the gap between the super-rich and the run-of-the-mill rich continues to widen. By 2009, only 0.5% of people will be affected (those with estates valued over $3.5 million or $7 million for couples). Also, if you limit yourself to looking at estates worth less than $5 million, family farms and family business are pretty much non-existent in terms of getting taxed. They account for 3% of the estate tax revenue in that classification, and they get other special breaks as well in any case for all valuations. See here for source info and related documents.
By contrast, everyone is getting screwed by the birth tax, none more so than the poor. Why? Well, because first of all the tax cuts are making the whole overall taxation system more regressive. Also, as the government takes in less revenue, it gives less to the states, who then systematically up sales taxes and fees, which as a whole are profoundly regressive. Republicans talk about abhorring class warfare, accusing Democrats of trying to target the wealthy in their tax plans, but Republicans are doing the exact same thing. Only in their case, the target is the poor.
Posted by Observer at August 9, 2003 09:44 AMComments on entries can only be made in pop-up windows while those entries are still on the main index page. Sorry for the inconvenience this causes, but this blocks about 99.99% of the spam the blog receives.
I just don't accept that sales taxes and fees are regressive. Then again, I don't like citizens being treated differently.
Posted by: Humbaba on August 11, 2003 11:23 AMWell, everyone pays the same tax on a loaf of bread, but because everyone does not have the same income, the tax is by definition regressive. A flat sales tax on a necessity item (a class of items defined as something pretty much everyone has to buy sooner or later) takes a larger percentage of a poor person's income than a rich person's income.
You may think that is fair. I don't.
Sales taxes, licensing fees and so forth that *cost* the same for everyone are regressive. Taxes that are percentage rates of income can be regressive or flat or progressive. The way the tax structure works, the federal income tax system is currently the only progressive tool in the government's arsenal of taxation tools. State and local tax revenues are collected regressively mostly through sales taxes, fees and so forth.
Note that the federal *payroll* tax system is regressive. That is, poorer people pay a larger share of their income in payroll taxes than rich people (there's even an upper limit to the payroll taxes you can pay, so the tax as a percentage of income vanishes for the upper 1% wage earners). All this talk from Bush and conservatives about wanting to give families a nice tax break and all that ... how about cutting the payroll tax instead of the income tax?
Hell, not even "liberal" Democrats have proposed cutting payroll taxes lately, I don't think. Not seriously, anyway. Some columnists have mentioned it as an alternative to tax cuts targeted to the super rich.
If you think taxes should be the same absolute amount for everyone (say, a total of $4,000 for every man, woman and child in the US, which is about the budget right now at the federal level, I think), then you need new candidates, because pretty much no one in office is currently seriously pushing such a view. Oh, they talk about flat tax rates, but they mean they want to get rid of the progressivity in the federal tax structure, which would make overall taxes much more regressive.
Posted by: Observer on August 11, 2003 03:43 PMWhy use percentage of income to call a flat rate tax regressive? Why not use savings? Or IQ? I call a flat rate tax fair, whether it's on income or purchases. Flat fees are fair as well, if you want item X (admission to the Grand Canyon), you pay Y ($15). We're all citizens, and flat rates mean wealthier people pay amounts anyway.
I don't think taxes should be the same absolute amount for everyone, I think the *rates* should be the same for everyone. A person paying $2000 in property tax on a $200k home vs someone paying $1000 in tax on a $100k home is fair, the nicer house get an arguably larger benefit from the taxes (fire/police protection)
Payroll taxes cap for the wealthy because the rewards are capped for the wealthy as well. Duh.
Posted by: Humbaba on August 11, 2003 03:59 PMBy *definition*, regressive means that it takes a larger *percentage* from poorer people (see any macroeconomics textbook), and everyone except the crackpots agrees that regressive taxes are stupid. And the argument that payroll taxes should be regressive because the rewards will be regressive only holds water if you think Social Security will still be solvent in 40 years. If Republicans have their way, it will wither on the vine and they'll use the social security money to fund income tax breaks for the top 0.5%.
Anyhoo, if you think the overall, comprehensive tax structure (including fees and sales taxes and so forth) should be the same *RATE* for everyone, then you should be in favor of more progressive federal income taxes (not to mention not letting companies set up HQ overseas to avoid taxes). Right now, the total burden is very regressive and getting worse.
This is all well covered in documentation provided by, for example, the Citizens for Tax Justice, the Children's Defense Fund, and the Center for Budget Policy and Priorities, all easily findable on the web.
Posted by: Observer on August 11, 2003 04:49 PMAnyone catch Bush's comment in Annandale, Virginia the other day aired on c-span:
transcribed from c-span.org "Pres. Bush Town Hall Meeting in Annandale, VA" @ about 30:30 minutes in
"Thats why you have to be careful about this retoric 'we're only gonna tax the rich'. you know who... the rich in america happen to be the small business owners. thats what that means. just remember when you're talkin about 'oh we're just gonna run up the taxes on a certain number of people'." [HERE COMES THE ZINGER] "first of all: real rich people know how to dodge taxes." [laughter and applause] "and the small business owners end up end up paying a lot of the burden of the taxation"
- George Bush, Aug 9, 2004, Annandale, VA.
Bush KNOWS the really rich don't pay taxes. But somehow he thinks its more effective to instate a "birth tax" as you call it by reducing the burden on the small-business-owner class rich and therefore increasing the deficit, instead of going after the super rich and making them pay thier fare share. Nuts!
Posted by: Joe Larson on August 11, 2004 10:45 AM