January 8, 2007

It Still Pays to be Rich

My father has a saying, If you are rich and ugly you still pass. Basically what he is trying to say, if you have money no matter how ugly you might be you still can get the girl or anything else you want. Trust me, it much funnier in Spanish. Anyways...

Under Republican rule the pass years, the rich got much richer.
Families earning more than $1 million a year saw their federal tax rates drop more sharply than any group in the country as a result of President Bush’s tax cuts, according to a new Congressional study.

The study, by the nonpartisan Congressional Budget Office, also shows that tax rates for middle-income earners edged up in 2004, the most recent year for which data was available, while rates for people at the very top continued to decline.

Based on an exhaustive analysis of tax records and census data, the study reinforced the sense that while Mr. Bush’s tax cuts reduced rates for people at every income level, they offered the biggest benefits by far to people at the very top — especially the top 1 percent of income earners.
As usual, Conservatives are whining about evils of class warfare. Larry Kudlow defends the people who can not defend themselves, the rich.
Today’s New York Times has a classic, class warfare argument from a Congressional Budget Office analysis from 2004 tax data that purports to show “Bush Tax Cuts Offer Most for Very Rich” but actually shows that the top 1 percent of income earners paid about 37 percent of all federal income taxes—a big jump from prior years.
It's shocking, but Larry Kudlow is right.
And do you know why that is? Here's a hint. The top 1% saw their incomes jump by 18 percent in 2004, for a total of 53 percent of the income growth. That means one out of every two dollars in higher wages that year went to a member of the top percentile. And, it turns out, when you make all the money, you pay more of the taxes -- though not proportionately so. In 2004, the rich paid more because they made more. But the Bush tax cuts let them pay far less than they would've otherwise. Contrary to Kudlow's mendacious insinuation, the fact that they paid a high share of the income taxes has nothing to do with the fact that the lion share of the tax cuts went into their bank accounts.
What's not shocking that Larry Kudlow will leave out the fact that top 1% saw their incomes jump by 18 percent in 2004. But, why let facts get in the way of your failed ideology. It's pure class warfare and rich are winning overwhelmingly, as usual.


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