Poll: Majority favors increased taxes on wealthy Americans
Published: April 6, 2010
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In the wake of a Quinnipiac University poll which found that 60 percent of Americans in both major political parties are in favor of raising income taxes on households making more than $250,000, a new report exposes how increases in tax breaks over the past 50 years have favored the most affluent. The report also details an Economic Tax Recovery Plan that would raise $450 billion in revenue by ending unfair tax benefits to the wealthiest Americans.
The study, commissioned by Wealth for the Common Good (WFCG), an organization of high-net worth individuals and business leaders, shows in the last decade alone, individuals with incomes over $250,000 have received more than $700 billion in tax cuts.
Key findings in the report include:
- Over the last half-century, America's wealthiest taxpayers have seen their tax outlays, as a share of income, drop by as much as two-thirds. During the same period, the tax outlay for middle-class Americans has not decreased.
- America's highest earners - the top 400 - have seen the share of their income paid in federal income tax plummet from 51.2 percent in 1955 to 16.6 percent in 2007, the most recent year with top 400 statistics available.
- Tax cuts for the wealthy between 2001-2008 cost the U.S. Treasury $700 billion and were added directly to the national debt. Retaining these tax cuts for another decade will cost an additional $826 billion.
The Key Statistics
- Between 1960 to 2004, the top 0.1 percent of U.S. taxpayers — the wealthiest one in one thousand — have seen the share of their income paid in total federal taxes drop from 60 to 33.6 percent.
- America’s highest income-earners — the top 400 — have seen the share of their income they pay in federal income tax alone plummet from 51.2 percent in 1955 to 16.6 percent in 2007, the most recent year with top 400 statistics available.
- If the top 400 of 2007 paid as much of their incomes in personal income tax as the top 400 of 1955, the federal treasury would have collected $47.7 billion more in revenue from just these 400 taxpayers.
- In 2007, if the top 0.1 percent of taxpayers — Americans with incomes that averaged $7,126,395 — had paid total federal taxes at the same rate as the top 0.1 percent paid these taxes in 1960, the federal treasury would have collected an additional $281.2 billion in revenue.
- Tax cuts for the wealthy between 2001-2008 cost the U.S. Treasury $700 billion, with all of these billions added directly to the national debt. Retaining these tax cuts will cost $826 billion over the next decade.
- In 1960, the middle 20 percent of U.S. taxpayers paid 15.9 percent of their incomes in total federal taxes. That total included not just income taxes, but payroll and other federal taxes as well. These same Americans, according to the most recent figures, are now paying 16.1 percent of their incomes in total federal taxes.
- Federal taxes, even after three decades of tax cuts for America’s most affluent, remain somewhat progressive. The higher the income, the higher the tax rate. But state and local taxes remain decidedly regressive. This offsets, to a significant extent, our residual federal tax progressivity. Taxpayers in America’s middle fifth paid 9.4 percent of their 2007 incomes in total state and local taxes. Top 1 percent taxpayers that year saw only 5.2 percent of their incomes go to state and local taxes.
"After 50 years of tax cuts by Kennedy, Reagan and Bush II, the middle class is paying the same share of income as they did in 1960. The richest 3 percent have gotten the gargantuan share of tax cuts," said Chuck Collins, co-founder of WFCG.
Authors of the study propose an "Economic Recovery Tax Program," which they project will collect some $450 billion in new revenue for the federal government through tax increases only on individuals with household incomes of more than $250,000. This program would also discourage financial speculation, strengthen the overall economy, and introduce greater transparency, fairness, and simplicity to the tax code.
Editor's Note: This report is part of a larger campaign by Wealth for the Common Good to end the Bush era tax cuts, which the group says could generate some $45 billion annually in federal revenue. Nearly 300 of America's top-earners, along with more than a thousand other Americans, have signed the group's online petition calling on Congress and President Obama to let the tax cuts on high-income taxpayers expire at the end of 2010.