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[Phys-l] "Class warfare" [was Re: SOLAR , NUCLEAR ENERGY etc.]



David T. Marx wrote:

With the present class warfare that's going on, the money will be
taken from the productive wealthy, leaving everyone in poverty and
dependent on the government.

Oh puh-leez.

But by all means, let's take a close look at that "class warfare" that's going on. Few of us have probably been spared the constant right wing talking point about the enormous share of income taxes paid by the wealthiest Americans. The numbers are always presented in such a way as to give the impression that the wealthy are being ever increasingly and outrageously robbed by the IRS. (This, of course, somehow despite the fact that the top U.S. income tax rate has been radically reduced from the 90% that it was back in the post WWII days.)

But never mind all that. Who wouldn't be outraged by the fact that the top 1% of American families in terms of adjusted gross income, paid an already absurd 19.1% -- NINETEEN POINT ONE PERCENT!! -- of all income taxes back in 1980. And who wouldn't be ready to join a tea party upon learning that that figure jumped to 36.2% -- THIRTY SIX POINT TWO PERCENT !!!!!! -- of all income taxes by 1999. (This according to data that I downloaded from The Tax Foundation a number of years ago before I learned that even data rarely changes minds.)

Over the years I've asked many people what they think the top 1%'s fair share should be and lots of them, including even one physicist, have told me that it should be 1% -- sometimes adding "at most."

Few people seem ever to think to ask the question, "What share of *all* income do these people get?" or have any sense that it should even bear on the issue.

For those of you who may be curious, the answer is that in 1980, the top 1% got 8.5% of all income--1 out of every 12 dollars. By 1999 they were getting 19.5% of all income--1 out of every 5 dollars. That is to say, during those 19 years, they increased their share of the whole pie by well over a factor of two while their share of the income tax increased by less than a factor of two.

So let's a) completely forget, for the moment, about the effects of the grossly regressive payroll and sales taxes and let's also b) adopt the point of view that the income tax should have absolutely no progressivity whatsoever built in to it. I'm hoping that I don't need to explain to this audience why the top 1% would still be paying 19.5% of all income taxes in 1999 and would have found that their share had increased by well over a factor of two from 8.5% just 19 years earlier.

In other words, the wealthiest 1% were paying a little more than twice their FLAT share of income taxes in 1980 (19.1/8.5 = 2.25) and a little less than twice their FLAT share by 1999 (36.2/19.5 = 1.86). It's no mystery why that has happened--tax rates on the wealthy have been radically reduced. And taking into account the important effects of payroll and sales taxes, we aren't very far from a genuinely flat tax at this point.

"Class warfare," indeed.

John Mallinckrodt
Cal Poly Pomona