Wow!! Here I was preparing to write a blog about how both sides can present “true” facts (yes, I realize the humor in that…) and still hold opposing views.
It turns out that the Democrats chose to distort the facts anyway. Why would they do that? Because the facts from the CBO report show that everyone–yes everyone benefited from the tax cuts. In fact, refer to my previous discussion about why the tax cuts were a good idea to help recover from the slowing economy that Clinton passed on to Bush.
So, let’s start with the distortions. According to the Democrats, as reported in the Yahoo/Reuters news story, The CBO report shows that “the top 1 percent, with incomes averaging $1.2 million per year, will receive an average tax cut of $78,460 this year, and have seen their share of the total tax burden fall roughly 2 percentage points to 20.1 percent.” While this is most likely “accurate reporting” (that is, the Democrats did say this) it’s not actually to be found in the data of the CBO report. In fact, if you look at Table 3 of the report (use the link above, and read this for yourself) you will find that the share of “Total Tax Liabilities” for the top 1% of the population hits 21.2% by 2010, when the tax laws sunset (that is, revert back to the higher tax rates of 2000.)
So first, the Democrats actually understate the tax burden by 1 full percentage point. Not “even” a rounding error mistake. But what’s worse, they are arguing that it is “not fair” in some measure that 1% of the population is only paying 21% of the taxes. Read that again, slowly. 1% of the population is only paying 21% of the taxes. Let that sink in. That’s apparently too low, according to the Democrats.
As if that isn’t enough, Table 4 actually is more “telling” since it presents the differences in tax Rates and liabilities. Yes, the tax rates for the top 1% dropped by a greater percentage. Could that be due to the fact that we are taxing them at a much higher rate to begin with? Remember, the more money you earn after you hit the highest tax rate, the greater percentage of your income you pay at that rate. If today, you happen to earn one dollar over the line, pushing you into the highest tax bracket, you will pay that rate–but only on one dollar. On the other hand, if you earn 1 million dollars over the line, you pay that higher rate for that total amount. So the total effective tax rate for a person one dollar over the line is far lower (given that the vast weight of the rate is the lower tax rates) than the rate for the person one million over who, for all practical purposes, earned all their income at the higher rate.
Now, that being said, you would think that the total change in share of the tax burden, or as the CBO report puts it, the total share of the “Individual Income Tax LIabilities” would decrease by a greater rate. But we see that is not the case. According to their report, those people in the top 20% of earners (highest quintile) actually show an increase in the share of the liability for most years, and there are only three years (2006-2008) when the tax share decreases at all for those in the top 1%. On the other hand, those in the bottom 60% of earners show a decrease in the total share of income tax burden every year. EVERY year.
Please, Democrats, let’s be intellectually honest here. Present the facts. The facts being simply this–The tax cuts put more money back in everyones’ hands, and at the same time did maintain the progressive tax structure that you believe is so important.
The other fact is even more insidious. Most people won’t go read the report, and the CBO won’t engage in political debates, so they won’t correct you.
But I will. And hopefully so will others.
Your homework today? Find truth. Seek truth. Live Truth.