Income Tax Disparity for the Rich?

Often cries for tax reform come from those who believe our progressive tax structure is so out of whack that the lower and middles classes should be ashamed of themselves.

Here’s a link:

http://www.atr.org/content/pdf/2008/August/081408ot-federalincometaxandwhattheypay.pdf

That link boasts the following:


According to IRS information from 2006

In terms of Share of Total Adjusted Gross Income

The top 1% earned 22% yet accounted for 40% of the total income tax burden.
The top 5% earned 37% yet paid in 60% of the total pie.
The top 10% earned 47% and paid 71%
The top 25% earned 68% and paid 86%
The bottom 50% earned 12.5% and paid only 3%

While some disparity exists it deserves closer examination. A comment was recently made that the top 25% foot 86% the bill for the rest of us. This has become a common ploy by Glenn Beck fans used to distort the reality of truth demonstrated by this imbalance.

Comparing the percentage of taxes paid to the percentage of the population represented is absolutely useless. Saying that a group collects almost 70% of income yet pays 86% of income tax collected is useful. Usually the balance of income earned by each echelon is left from the argument by the distorters of truth.

Something to consider, when someone throws numbers out like the top 25% pay 86% of the burden, they seek to WOW you with this implied extreme imbalance without a point of reference. One thing that reduces the WOW factor of these stats for me is to remember that among that bottom 50% we have to include the homeless, jobless, people on welfare and others who pay zero tax. Why when this comes up does the middle class always get lumped with the lowest of the lower class? I wonder what the statistics look like if we eliminate the bottom 10% from that bottom 50% figure. These numbers are not available on that link.

However, using the numbers we do have we can draw some very interesting conclusions that seem to reveal a certain attempt at sensationalizing the issue. if we take the top 25% (earns 68% pays 86%) less the top 1% (earns 22% and pays 40%) we are left with a rather wealthy 24% of our population earning 46% of income and paying in 46% of the tax burden. Why print details about the top 25% to make an argument for reform when clearly the problem lies at much higher echelons than 25%?

Furthermore, the top 5% less the top 1% appears to pay 20% of the collected tax burden while earning only 15% of the total adjusted gross income, much less a disparity than occurs for the top 1%. The top 10% less the top 5% earns 10% yet pays 11%. So the disparity is clear only at the extreme upper echelons of adjusted gross income. I'd like to see the numbers for the top .1% so as to eliminate them from the top 1% but those numbers do not appear on this table.

Another thing to consider: When we are talking about people who pay ZERO income tax, usually the immediate assumption is that only the lowest income earners are ~guilty~ of such a thing. Consider the wealthy and retired. Do they pay income tax from year to year? I suppose they would if they had investments that paid off but I doubt they rank among the upper echelons of adjusted gross income earners and if their investments were a losing venture I suppose they’d pay zero income tax. The above referenced table is a snapshot for one year so in 2006, it is very likely that some very wealthy individuals paid ZERO income tax. Consider also corporate income taxes. These might populate some of the highest echelon yet one could argue they pay zero tax as this cost is simply passed on to their customers in pricing procedures.

As you can see, I don’t buy into the passing of guilt or judgment or cries for reform based solely on who pays the most or least percentage of the income tax pie. It’s much more complicated than “The top 25% pay 86% of this burden” as one commenter put it.

McCain's Apprroach Lacks Grand Design

I think it's cute that McCain uses diversionary reasoning to support a failing campaign. First using Palin to change the focus from him to someone who had not spent millions proposing herself worthy of a presidential bid, then Ike to keep Bush off the floor of the Republican Convention, then the state of U.S. economy to maybe prevent the first scheduled ’08 presidential debate...even his opening comment about Kennedy before addressing the first question of the debate seemed a diversionary tactic. Further, his claim that "tactic" and "strategy" are so different that every intellectual should be appalled by Obama's use of the word seems the antithesis to Clinton defining "is". "Obama doesn't understand," was his mantra. But does McCain understand? He seems real in touch with certain people who are not me.

My dictionary offers as synonyms for the word "tactic" and "strategy" thusly:

Tactic:
approach, course, device, line, manoeuvre, means, method, move, ploy, policy, scheme, strategem, tack, trick, way.

Strategy:
approach, grand design, manoeuvring, plan, planning, policy, procedure, programme, scheme.


I wonder to what extent McCain was "programmed" as a POW. I wonder if years of torture can be overcome. If so, why not torture our enemies? If torture experience can be reasonably cast as a credential for an American presidential bid, what's the big deal? I'd then say break the bones of every imprisoned enemy. Worst case? They become leadership material for their movement if they survive imprisonment. Is that cruel treatment? Making leaders out of enemies?

Ok, maybe it would be bad strategy. Or would the right word be tactic?

Polygraph For Liars

Some estimates put polygraph accuracy near 70%. (others say close to 100%) I hope it’s a lot higher than 70% accuracy and here’s why:

Assume a truth you tell is being tested. If you test positive for untruth, now everyone REALLY thinks you're lying. Well, at least they think there’s a 70% chance you've fibbed.


On the other hand given the same truth, if you pass the lie detector test, people are still thinking there’s only a 70% chance you’re telling the truth.

What’s the worst a lie detector could do? If I call a coin my lie detector, accuracy will be 50%. In fact, if 70% reliability were counted on, that probability would be closer to a 50/50 coin-toss than perfection.

But if you don’t take the polygraph test, suspicions are raised, guilt inferred. Does it become a Damned-if-you-do/Damned-if-you-don’t-scenario? Would a gadget reliable 70% of the time have any use for someone telling the truth?

Why would anyone lying take a lie detector test? Well, there’s a 30% chance he’ll pass the test. If he fails, those who speculated guilt will only be 70% sure of the lie. They may have already been at least this sure.

I’d say for any test less reliable than 90% (seems polygraph accuracy has to be measured subjectively to some extent), it’s a better bet for the liar than the teller of truths.

McCain Chooses Poorly

Gov. Palin represents a bad choice for White House potential. Not because she’s a woman. Not for lack of experience (I champion that actually, experience has us where we are. Inexperience is a happy change)

She’s a bad choice because she has “actual responsibilities” (to quote from her speech tonight). She has a baby and other small children. If McCain dies in office (or even not) she’ll be juggling dirty diapers and back seat arguments while making an attempt at remaining focused on dying soldiers or starving, drowning citizens on whom befalls a Katrina-esque disaster.

I can hear it now: “Don’t make me stop this limo! You two stop fighting! Can Mom get a break? I am dealing with some VERY complicated world issues and all you two are worried about is who gets the toy from the cereal box!” Oh, and this one, "Sweetie, I know you're only 17 but that is YOUR baby not MINE! I have other 'actual responsibilities'. I have no time to help you learn to be a mom before you are done being a kid!"

Nope! It ain’t fair to the US; it is LESS fair to those kids. She has 5 kids and a grandchild on the way. As a parent, I know that my kids come first. For a President, the country has to come first.

Come back in 18 years or so Mrs. Palin. I’m sure you’ll make a fine executive but can't that wait until after the high school graduation party when your little one will walk with your daughter's little one? Do the right thing. Raise those kids yourself. Don’t let the Federal Day Care Center do it!