Third Party & Independents Archives

IRS: The rich are getting richer, faster

Nothing amazes me more than Bush saying his recent divident tax cut actually helps stimulate the economy. I’ve talked about this before and now I have proof it’s not helping from the IRS.

Indeed, the top 400 taxpayers paid 22.3 percent of their income in taxes in 2000, down from 26.4 percent in 1992 and well below the peak of 29.9 percent in 1995, according to the paper.
Had President Bush’s tax cut been in effect in 2000, the amount of taxes paid by the wealthiest Americans would have dropped an additional 20 percent, the Times reported.

One of my favorite economic talking heads, Warren Buffett, weighed in on the discussion.

Instead of the Senate's tax cut plan, Buffett proposed that it provide tax reductions to those who need and will spend the money in the form of a Social Security tax "holiday" or a tax rebate to lower-income people.
"Putting $1,000 in the pockets of 310,000 families with urgent needs is going to provide far more stimulus to the economy than putting the same $310 million in my pockets," Buffett added.
He closed the piece by saying that the "government can't deliver a free lunch to the country as a whole. It can, however, determine who pays for lunch. And last week the Senate handed the bill to the wrong party."

The idea behind the tax break is that people (the rich) who recieved such a tax break would use the extra income to reinvest that money. Whether the money was invested in the stock market or other avenues one would hope that eventually it would end up in the economy, however, the recent IRS study would suggest otherwise.

... the cutoff to make the list in 2000 was $86.8 million, more than triple the $24.4 million needed to qualify in 1992 ...

I don't know about you, but I'm not worth triple what I was worth in 1992 (nor are my parents or anyone else I know). What the above statement tells me is that the rich are not using these tax cuts to reinvest, but instead packing away the money and getting richer by the minute. One can't blame them, if I was worth $24 million in 1992 and was given enough tax breaks to be worth $86 million in 2000 I'd jump at the chance. Nope, the blame rests on an increasingly out of touch government.

It's time for a progressive tax plan that will truly put money where it's needed; in the hands of the poor and middle class. I guess I shouldn't be too surprised that a tax plan as crazy as this one was passed by Congress when 40% of them will directly benefit from such a tax plan.

Posted by joestump at June 26, 2003 11:13 AM