Dale Sievert’s recent Milwaukee Journal Sentinel letter criticising Barack Obama reminds me of Mark Twain’s maxim:
”There are three kinds of lies: lies, damned lies and statistics.”
Sievert notes the richest 1% paid 39.9% of federal income taxes. But Sievert's is cherry picking. Income taxes are only one of several federal taxes.
Sievert ignores the impact of Social Security (6.2%) and Medicare (1.45%) taxes. Middle class workers pay a much higher percentage of their income in these taxes since the Social Security tax is zero percent after $102,000. For the self employed these tax rates are an even higher, 15.2%. And social insurance taxes do not apply to capital gains and dividend income, most of which goes to high income folks.
If you include the taxes Sievert ignores, the average federal tax rate for the richest 1% falls to 22%, the lowest tax rate paid in at least 18 years.
How does the 22% rate paid by the super rich compare to what the middle class pays?
Taxpayers making between $100,000 and $200,000 paid nearly the same rate, 20.6%. Those in the $50,000 to $75,000 range paid 17.4%; even taxpayers earning a very modest $40,000 to $50,000 paid 15.8%.
Sievert also ignores that the richest one percent's portion of national income has soared to its highest level since 1929.
Put simply the richest 1% pay more in income taxes because they are making so much more than everyone else. But their federal tax rate is not much higher than that paid by firefighters, welders, nurses and machinists.
Barack Obama’s proposal to roll back some of the Bush era tax cuts on folks making over $250,000 is a sensible and fair way to ensure that we have the resources to pay for social investments like education, healthcare, research and development, increased regulation of imports, security and infrastructure required to keep the country strong and its people safe and prosperous.