Deserving of its own post. Here is a table I created from the original. Those earning $200k to $500k – the largest group directly effected by the increased tax rate demanded by Democrats – are paying more than double the rate of the $75k to $100k group!
Barak Obama had an impromptu conversation with Joe Wurzelbacher, a plumber from Ohio. Wurzelbacher is living the American dream. He’s paying more and more taxes and he’s not happy about it. He asked Obama about his tax plan, “your new tax plan is going to tax me more, isn’t it”? Well of course Obama proclaimed. “I think when you spread the wealth around, it’s good for everybody.”
Author note: While I’m away from the computer, I’m republishing my top 20 posts from 2008 each afternoon. -Steve
So the government takes money from Joe plumber, redistributes that cash to other people so they have money to hire Joe plumber to do work, and the people end up paying Joe plumber a higher price for the work. That’s not trickle up, it’s trickle back.
Plenty of discussion about this exchange on the Internet the past few days. Scott Johnson over at Powerline (cool new look at their site) has a good post today.
Obama is speaking of the trickle up theory of the American left. They think that if you collect additional taxes from the rich (legalized theft) and redistribute it to the “less fortunate” in life, those who are less fortunate will have more money to spend with, in this case, a plumber named Joe from Ohio.
There are unintended consequences when “the rich” are ripped off, especially when they know they are paying more than their fair share in federal taxes already.
By raising taxes on Joe plumber, Jo plumber needs to make some choices. One solution is for Joe to raise prices to cover the excess taxes he has to pay. He may also lay off workers, cut benefits and/or slow expansion.
Is that clear?
Many Americans are already paying much more than their fair share of federal income taxes. Johnson mentions the most recent tax data released by the IRS and I’ve cleaned up the IRS spreadsheet and put it into terms that are more manageable to understand.
Just how rich are you?
Many people have no idea how rich – or how poor – they are as compared to other American families. The following data is from the 2006 tax year and was derived from IRS data located here. The tax collected – just more than $1.02 trillion dollars – was only from individual federal returns and does not include business taxes. If you have a small business and fill out a Schedule C, my guess is that those tax dollars are included in this 2006 report.
What group do you fall into? To sum up the statistics…
There are a couple of things to consider here. First, many working couples in New York City or Hartford, Connecticut could easily be in the top 10 percent of wage earners if – as an example – one was a nurse and the other a cop.
Second, less than 3 percent of the returns filed fall into the category of making $250,000 or more (Obama’s targeted group). Less than 4 million returns (families) – out of more than 138 million returns – are picking up more than 53 percent of the federal income taxes collected.
What it comes down to is the top wage earners are already paying much more than their fair share, and it seems tax payers like Joe the plumber are catching on. Are you?
Data
Others watching Obama try to explain his trickle up theory include Malkin, Hot Air and Vicevich.
Update: Ari Fleischer (on April 12) says everyone should pay income taxes – hat tip to Ed at Hot Air.
Hah! Check out WealthSpreadTM. I can’t believe it’s not earned. Low in transfats, high in taxes. Low-Effort! Butter it up with Wealth and spread it around like you earned it! Made with 100% pure American taxpayer sweat. Endorsed by the cook fringe of the Democrat party. Patented blend to help improve standing in the polls.
In my post from Nov. 1, A close look at the federal tax burden of corporations and individuals, I provide details about the large increase in federal income and corporate tax revenue after the 2001 and 2003 tax cuts. The piece also displays how the federal tax burden moved from corporations, to individuals and back to corporations between 1995, 2001 and 2007 respectively.
One of my readers mentioned the population increase between 1995 and 2007. An increase in population alone could result in these changes. More people working and companies doing better – both very good things – could explain the increase. We could be pessimistic and say the rich got way richer and the poor and middle class were left behind.
After a review of additional IRS tax data, it’s clear there was a shift. Most everyone improved their status.
Barak Obama had an impromptu conversation with Joe Wurzelbacher, a plumber from Ohio. Wurzelbacher is living the American dream. He’s paying more and more taxes and he’s not happy about it. He asked Obama about his tax plan, “your new tax plan is going to tax me more, isn’t it”? Well of course Obama proclaimed. “I think when you spread the wealth around, it’s good for everybody.”
So the government takes money from Joe plumber, redistributes that cash to other people so they have money to hire Joe plumber to do work, and the people end up paying Joe plumber a higher price for the work. That’s not trickle up, it’s trickle back.