Poltical Rhetoric and Income Taxes. Who Really Pays What?

When ever I think about or discuss politics, I find myself in something of an unusual situation. As a Unitarian Universalist I am certainly a religious liberal, and in some ways I am also a social and political liberal. I am however, not a typical liberal in the sense the word is usually used in discussing American politics today. I am more of a "Goldwater" Republican and libertarian than anything else, though I register as an independent. One issue in particular that I struggle with at times is taxation. Economic Justice is a major issue for most UUs, and the political struggle over taxation in America has always been a major, contentious part of that issue. On one hand, as a libertarian, I am innately mistrustful of the government, and what the government plans to do with my money. I don't like taxes much, and feel small government is good government. On the other hand, as a UU, my "liberal" side worries about the increasing divide between the haves and have-nots in this country. We have all certainly heard the claims made by many in the Democratic party that our tax code currently favors the wealthy over the poor and middle classes. In fact it is certainly going to be a major campaign issue for the Democratic party in the upcoming election. I have heard a lot of claims and rhetoric from both sides of issue, and I have become cynical enough (hard not to be these days) to have my doubts about any claim made by any politician of any ideology, especially in an election year. So I decided to try and look up the facts myself, and draw my own conclusions. After some digging online, I discovered a report from the Congressional Budget Office. The CBO is a member of the Legislative Branch of the government and its responsibilities include "projecting the budgetary effects of proposed legislation. The main goal is to provide Congress with objective, timely, nonpartisan analyses needed for economic and budget decisions and with the information and estimates required for the Congressional budget process. This includes projections on the effect on national debt". The report, which uses data from 2004-5, has some very interesting numbers. Here are some examples:

Looking at the "Shares of Federal Tax Liabilities Table) The top 1% of all Federal Income Tax Payers in 2005 (that is anyone earing over ~$1.58 million a year, about 1.1 million households) pay 27.6% of ALL Federal Taxes and 38.8% of Individual Income Taxes. The top 5%, ($520,000 and up, 5.8 million households) pay 43.8% of All Federal Taxes, and 60.7% of Individual Income Taxes. The top 20% ($231,000 and up, 23.1 million households) pay 68.7% of All Federal Taxes and 86.3% of Individual Income Taxes!!! The lowest 20% (people who earn less than $15,900 a year, 24.1 million households) pay 0.8% of all Federal Taxes, and -2.9% of Individual Income Taxes. The second quintile (people who earn between $15,900 and $37,400, 21.9 million households) pays 4.4% of all Federal Taxes and -0.9% of Individual Income Taxes. The middle quintile ($37,400-$58,500, 22.2 million households) pay 9.7% of all Federal Taxes, and 4.4% of Individual Income Taxes.

When the top 10% of Americans in 2005 paid 72.7% of all Individual Income Taxes and 54.7% of ALL Federal Taxes and the bottom 20% paid -2.9% of all Individual Income Taxes 0.8% of all Federal Taxes, I find it hard to beleive that our current progressive income tax system somehow favors the wealthy. Unless by "favor" one means having 10% of Americans pay half of all Federal Taxes.

I still believe the growing gap between the poor and the wealthy is becoming a serious problem in this country, but having looked at the numbers, I can't buy that somehow our income tax system is part of the problem. If it is "unfair" to anyone, it's "unfair" to the affluent. I'm really not sure what the politicians making those claims want. should the top 10% of Americans pay 90% of all Federal Taxes? 100%? Or is it just cynical populist politics? We already have the Federal Estate Tax which "serves to prevent the perpetuation of wealth, free of tax, in wealthy families". I wish I had a good answer to help deal with the problems of economic injustice and this growing income gap, but I don't think further shifting of the tax burden onto the Americans who are most actively fueling our economy is the right (or fair) solution.

In the Beginning.....

Well, here we go, my first post! I've been home from Iraq for just over three weeks now. People are always asking me how I'm adjusting - a natural question I suppose - and honestly I'm finding that in a lot of ways it feels like I never left home. I suppose I'm lucky in that regard, as I know many other soldiers have found the transition to be difficult. But I am fortunate to have come unwounded, having never witnessed anything particularly horrific, having not lost any comrades, and while I was certainly exposed to dangerous situations, having experienced any real moments of sphincter tightening terror.

Many people are interested on my opinion about the war in Iraq - about how it's going, whether or not it's as "good" or "bad" as they say on the news (depending, I suppose on the asker's own view), and (more tentatively, for fear of offending I assume) whether or not I think we were "right" to invade in the first place. As to the war's status or progress, I honestly must admit my experiences do not really give me significantly better perspective on the situation in Iraq than anyone who takes the time to closely follow the news from here at home. While I can certainly comment with some confidence on the situation in the specific geographic area in which I served, during the time that I served there, the overall situation in Iraq is far to fluid, complex and variable depending on the region in question for me to have any sort of authoritative command of the "big picture". Regarding the "rightness" of the war I am somewhat ambivalent. I am not convinced (especially given the way things have turned out) that invading Iraq was a particularly good idea in the first place, for Iraq or the United States, and there is no doubt in my mind that the first year or two of the "occupation" was horribly mishandled by the Coalition Provisional Authority. That having been said, I believe that we have a moral obligation to both the Iraqi people, and to the soldier's who have given their lives in this war, to continue to stay in Iraq until a reasonable level of security and stability have been established. A premature departure - not matter how unpopular the war may become here at home - would very likely doom the Iraqi people to years (if not decades) of civil war, continued sectarian violence, and misery. In a nutshell - "you break it, you bought it" - we created the current situation in Iraq, and thus we have a serious, moral obligation to do everything we can to help resolve it.