Conservatives are always complaining that Obama is a socialist and wants to redistribute the nation's wealth. They say this as if it's a Bad Thing, yet they didn't complain about the way the Bush & Clinton Admins redistributed the nation's wealth. That wasn't "socialism" because it went to the top instead of the bottom. And boy, did it ever! David Kay Johnston, who retired from the NYT last year, is still writing and has become one of the country's best tax analysts. He has unearthed some startling statistics from a recent IRS report analyzing income data for the top 400 "earners" over the15 years between 1992 and 2007. Hang onto your hat 'cause it's worse than you probably thought.
The incomes of the top 400 American households soared to a new record high in dollars and as a share of all income in 2007, while the income tax rates they paid fell to a record low, newly disclosed tax data show.
In 2007 the top 400 taxpayers had an average income of $344.8 million, up 31 percent from their average $263.3 million income in 2006, according to figures in a report that the IRS posted to its Web site without announcement that were discovered February 16. (For the report, see Tax Analysts Doc 2010-3372 .)
IOW, in one year alone at the height of the Bush-created economy and the year when the full measure of the disaster that economy had created was just beginning to show itself, the 400 highest "earners" in the nation increased their wealth an average of $81million. Each. An increase of more than 30% in a single year. You? You didn't do so good.
Since 1992, the bottom 90 percent of Americans have seen their incomes rise by 13 percent in 2009 dollars, compared with an increase of 399 percent for the top 400.
So, while the top 400 (less than 1% of earners as a whole) jumped their income by almost a third and quadrupled it during the Clinton-conservaDem and Bush-neocon presidential terms, our wealth went up by a mere 13% for the entire period. We didn't even keep up with inflation, which ran at a super-low 3% or so each year.
But that's only half the story. Surely, according to the standard right-wing, FoxNews narrative and the reason Bush gave for his massive tax cuts for the wealthy in '01, the rich paid more in taxes than everyone else and that's why they deserved to get more back. Right? Um...no. Actually they paid less than we did. Way less.
The long-term data show that under current tax and economic rules, the incomes of the top earners rise when the economy expands and contract during recessions, only to rise again. Their effective income tax rate fell to 16.62 percent, down more than half a percentage point from 17.17 percent in 2006, the new data show. That rate is lower than the typical effective income tax rate paid by Americans with incomes in the low six figures, which is what each taxpayer in the top group earned in the first three hours of 2007.
Taxpayers on the 95th to 99th steps on the income ladder paid an effective income tax rate of 17.52 percent, according to calculations by the Tax Foundation, a nonprofit research group that favors less taxation and lower rates. Taxpayers in this category earned between $255,000 and $451,000 in 2007, compared with an average daily income of almost $945,000 for the top 400, who paid lower effective tax rates on average.
While the tax rates of the middle class were going up and up, tax rates for the richest of us were actually coming down. Joe Conason thinks TPers ought to give that some thought before they let themselves get captured by the corporate right-wing "populism" that Fox is selling on Wall Street's behalf.
Before angry voters restore Republicans to power -- in the name of "tea party populism" -- perhaps they should consider just how well right-wing rule worked out for them during the past decade. Last fall a Census Bureau study found that real median household income had declined from $52,500 in 2000, the last year that Bill Clinton was president, to $50,303 in 2008, George W. Bush's final year -- a period during which Republicans dominated Congress as well. Millions of those median households lost their health insurance (and, since the onset of the Great Recession, many of those same families have lost jobs as well).
So most of those middle-class Americans who flock to the tea party demonstrations were big losers during the Bush era.
He's probably right but they probably won't.
PS.
If you want to know how they gamed Clinton and bought Bush, you can't do better than read David's latest (I think) book: "Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill)". You can still get it at your local bookstore or you can order it through Amazon here.
But make sure you take your blood pressure meds first. You ain'tgonna like what you read.
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