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Think Bush’s tax cuts helped you?

Fierce Planet Posted on by


Then you must be very well off.
UPDATE: A friend points out to me that half of U.S. families fall into that $50k and under segment.
UPDATE:
In 2002:

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Think Bush’s tax cuts helped you? — 9 Comments

  2. The problem is that the Y axis is scaled to $1 million dollars, while the benefit for even the $1-10 million dollar households appears to be less than $100,000. Even if the benefit to a $40,000 household were 10% of adjusted gross income, it won’t even blip on a $1 million scale, given that $4,000 is less than one half of 1% of the Y axis scale. That’s the problem with using a dollar amount as a Y axis; when you put my income tax benefit at $40,000 a year income on the same graph as those making $10,000,000 a year and above, my benefit doesn’t even appear as a blip on the graph, even though my refund this year was greater than 12% of my AGI. The Y axis scale therefore makes the graph meaningless, and makes it appear that only those making $200,000 or greater are deriving any benefit at all. A more relevant, honest and telling graph would be the income tax benefit as a percentage of adjusted gross income.

  3. You have a good point about statistics, but remember that these tax cuts were sold to the public with Bush specifically stating that the bulk of the cuts would go to middle and lower income people. That’s simply not true.
    I also think that most people don’t realize the degree to which wealth is concentrated in this country. It’s a degree much greater than is even shown in this graph, because wealth of the upper 20% or 10% or even 5% are nothing compared to the wealth concentrated in the upper .1%. So I think the graph serves a purpose despite its flaws 🙂
    See Kevin Phillips “Wealth and Democracy” for more.

  4. I’m pretty hip to how concentrated wealth is – I lived in NYC for about 15 years and worked on a trading floor. I’m back home in Texas now, making far, far less (about 1/4 New York salary)but living around the corner from my 79 year-old mother-in-law and a short two hour flight from my own Tex-Mex mother, who is now a cancer survivor at 69 years old. My kids have a back yard and a dad that’s home every night for dinner, and home to play with them on the weekends. Winter days are rarely colder than 50 degrees. As Jimmy Buffet wrote, “I’ve found me a home”. Honestly, BTW, we’ve faired fairly well under the tax cuts. I had an AGI of about $36,000 this year and got back $4,500. I think that’s pretty darn good.
    The lowest tax rates moved to 15% from 19% (child tax credits included), and the highest rates moved down from 37% to 35%. On a pro-rata basis, it seems to me we did better, but then again, I’m just a simple Mexican-American trying to make it in the big city.
    I understand that there are people that make a whole lot more than me, but I don’t fault them for it. The guys that made the $250,000 plus salaries on the trading floor sacrificed for it -it often cost them their youth and missed childhoods of their children. Others pay in stress, the competive lifestyle and years of studying. I don’t see them using exponentially more of the infrastructure, so I don’t really get why they should have to pay 20% more of their income just because they made life decisions that positioned them to make more money. If a guy making $250,000 and I paid the same 20% flat tax, I would pay $8,000 in taxes and he’d pay $50,000. Does he use $42,000 more in infrastructure than I do? I don’t see it. Is it “fair” and “equitable”? I don’t know. I’m probably the wrong guy to ask – I fucked off in college, and have always taken somewhat of a perverse pride in the fact that my education was life and the school of hard knocks.
    I guess the question is whether it’s just that Mr. Nerd-boy should have to pay more in taxes because he studied harder, had no life in college and got a dual bachelor’s in math and finance, an MBA and a doctorate in applied mathematics and then went on to work on a derivatives desk and got paid the big money, or got his MD or JD.
    Sure,what the hell, I’m game… tax them good – when in doubt, max them out. Fair? I guess to some it’s as we say in Texas; “fair’s a place in the country you go to sell pigs.”
    But what about my kids? I want them to be well edumacated and make oodles more money than I ever made. I want them to be rich, and I hope that their children never want for anything and are richer even than them. Can we be just a hair less “progressive” in the tax code and cut my babies a little slack?

  5. I just went on-line and put a loan request in for “Wealth and Democracy” to my local library. I love the inter-library loan system here in Houston. I’ll let you know what I think once I get the book.

  6. I think you’ll find it pretty interesting.
    I know all families want a good life for their kids, and that’s a good thing. But the amount of inherited wealth that’s being passed on in this country is obscene. Really, we have a heriditary aristocracy in this country now, and I think that’s bad for democracy.

  8. It’s not the idea of inheritance that’s obscene, it’s more the quantities of inherited wealth that have made our economy so seriously top-heavy. We all have our ideas about how much money is too much to pass on, but for me, when most of the money in the country is being passed through inheritances, that’s way too much. Yes it’s obscene. It’s also inefficient and contributes to many social problems.

  9. I just wonder whether it’s feasible to fix the problem of the concentration of wealth by having the state reallocate wealth from the top down, or whether this inequity is one of the inherent structural features of a competitive free-market capitalistic system. If you took all but $5 million from Bill Gates, George Soros, Larry Ellison, Michael Dell, Sergey Brin, Teresa Heinz and Larry Page and distributed it in $5 million dollar increments to people who are currently at the median US income, how long would it take before the money found it’s way back to the original seven tycoons or people like them?

    I believe that dollar wealth is simply an indicator of how effectively one competes in a free-market system. There is a wide spectrum of talents and abilities, and there are those who are more driven, more talented, more disciplined and in some cases more ruthless. Conversely, there are those who choose not to compete whole-heartedly in the quest for material reward or lack the requisite financial acumen to compete at the George Soros level. In the acquisition of wealth, all men are not created equal; Steve Jobs the multi-billionaire currently has money-making and money management skills and talents that I obviously don’t have, and I have job-keeping skills and talents that Joe the squeegee guy may not have. Making money is both a skill and a vocation. Yes, great wealth gets passed from generation to generation, but if the inheritors can’t manage or compete, the wealth dissipates over time. For a good example, take a look at how many of the great old dynasty names like the Carnegies, Mellons, Kennedys or Rockerfellers are on the Forbes list of the 400 richest Americans as compared to the number of more recently minted tech ultra-millionaires and billionaires.

    All that aside, it also seems to me like a horrible violation of civil rights and liberties to have the state step in and arbitrarily confiscate and nationalize wealth that was freely, legally and rightfully acquired and intended to be left to heirs soley because one has been too successful and amassed “too much wealth”. Life, liberty and property; the Fifth Amendment, the Constitutional prohibition on “bills of attainder” and all that.

    Unfortunately, I think rational people facing de facto state confiscation of wealth would eventually choose to do as Paul McCartney and John Lennon did and move themselves and their wealth off-shore to become tax exiles until the laws changed.

    Thanks for the opportunity to post on your blog, and I’ll let it go now. Thanks!

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