Tuesday, July 31, 2012

Desperate Wall Street Journal Editors Call Upon a Press Aide to Make the Economic Case That the Rich Pay Too Much in Taxes

Maybe Not Even Non-Self Respecting Analysts Will Not Make the Case Any More

Ari Fleischer gained fame as President George W. Bush’s Press Secretary.  A Press Secretary is not a policy making position, it is a communications position.  The job is to put the best face forward on news about the President.  It is a job to spin, a job to  propagandize, and job to convince the public that 2 plus 2 is 5. 

So after he left his job as Press Secretary Mr. Fleisher started his own consulting company, in the area of communications. So having no knowledge of economics, tax policy, financial analysis or any of the like this makes Mr. Fleisher an ideal candidate to spout off about tax policy for the Wall Street Journal.  Because their presentations are propaganda, not analysis.

Mr. Fleishcher’s conclusions, the rich not only pay their fair share of taxes, they pay more than their fair share and they pay too much.


Yet President Obama says that "for some time now, when compared to the middle class," the wealthy "haven't been asked to do their fair share."

He's right that the system isn't fair, but not because the top 1% pay too little. It is because they pay too much.

The basis for this startling conclusion is this.

You wouldn't know this from President Obama's rhetoric, but our tax system, according to a recent report by the Congressional Budget Office (CBO), is incredibly progressive. Consider: The top 1% of income earners pay an average federal tax rate of 28.9%. (See the nearby table.) The average federal tax rate on the top 20% is 23.2%. The 20% of taxpayers earning between $50,100 and $73,999 pay an average 15.1%, and so on down the line. The CBO report includes payroll as well as income taxes paid.

There's also another way of looking at fairness, and that's the tax burden. Here, consider the top 20% of income earners (over $74,000). They make 50% of the nation's income but pay nearly 70% of all federal taxes.

So one would have to assume that any increases in taxes must come from middle and low income families, because the poor rich folks are already saddled with huge tax bills.

One reason our country is so divided is because the president keeps dividing us. If taxes need to be raised to fight a war or fund a cause, the president should ask everyone to pitch in. If the need is national, the solution should be national—and that includes all of us.

Of course the fallacy in all this is with respect to the effective tax rate, the taxes as a percent of income.  Over the last 30 years this rate has dropped dramatically for the high income groups, much more so than for any other group.  But Mr. Fleischer conveniently omits that statistic, it would not fit his case for increasing taxes on the middle class.

Here is what we would suggest to Mr. Fleischer.  He should ask all those top 20% ers to change places with the bottom 20% ers, you know, the ones that don't have to pay any income taxes because they are too poor.  See how many take him up on this.  We' re betting that number is between  0 and 1.

One more thing that Mr. Fleischer does is to unintentionally state another part of the vast right wing class warfare case.

But that's not how Mr. Obama governs. We learned during the 2008 campaign that he believes in spreading the wealth around. And recently we learned he doesn't believe that successful people made it on their own. Without the government, the president tells us, job creators and entrepreneurs would not be able to make it in America.

Does this simpleton really think that anyone’s success in America happens without a massive support from government.  Does he think that public safety and national defense does not play a role in protecting the wealth of the wealthy?  Does he not know that education and transportation systems are absolutely necessary to private sector businesses?  Is he unaware of how much government subsidizes the private sector?Does he not know that without government the entire population would be destitute, including the smart, brilliant, entrepreneurs?

Here is Richard Cohen in the Washington Post describing a typical Conservative with respect to the subject of how government has been vital to a person's life.

                     My boyhood friend Jack became a doctor — and a conservative. He had gone   to public schools, attended college with the help of a government scholarship, went to medical school on the Army’s dime, and learned his specialty in military hospitals. He insisted that the government had done nothing for him. In that way, he is both the soul and the wit of the Republican Party.

Finally, does Mr. Fleischer not know that without his own service in government, getting a government paycheck, getting government provided health insurance and getting the experience in communication from working as a government communications employee he would not have his own six figure income and would instead be a hack somewhere making just over minimum wage.   Yeah, he probably does know this, and that is part of the reason he has to so vehemently defend the indefensible.

1 comment:

  1. I wonder why Fleischer divides income groups into quintiles? Could it be because it makes the "top earners" group (a) relatively modest (you only need to earn $74,001 to be a top earner!) and (b) a combination of middle class people and the millionaires and billionaires who pay a lot in taxes because their wealth vastly exceeds the national average?