Letter: Overtaxing the middle class
On tax day, April 18, I headed over to the Tea Party (Republican) anti-tax rally on First Street in Willmar.
There were lots of Republican politicians and pickup trucks there. I understand what motivates the politicians, but what about the pickup trucks? Is everyone really overtaxed?
Over the past decade taxes that most impact those with higher incomes have been substantially reduced and are now at historic lows. Those are the income, corporate, estate and capital gains taxes. Taxes that most impact the non-wealthy majority have largely increased or remained the same. Those include property taxes, payroll taxes that support Social Security and Medicare, sales taxes, gas taxes, cigarette taxes and all those increased government fees.
According to the Nobel laureate economist Joseph Stiglitz, the top 1 percent of Americans now take in about 25 percent of all income in this country, up from 12 percent of all income 25 years ago. The top 1 percent also controls about 40 percent of all wealth in this country and have seen their income grow by 18 percent in the past decade, while those in the middle have seen their income shrink.
According to the most recent numbers from the IRS, the top 400 incomes in the United States averaged $345 million in 2007, but paid an average federal tax rate of only 17 percent, down from an average rate of 26 percent in 1992.
The numbers are clear. The rich really are getting richer, in both income and wealth, while the majority are getting poorer. At the same time effective tax rates have fallen for the wealthy minority, and have either risen or remained the same for the majority. Over the past decade the tax burden has been shifted increasingly from the minority on top unto everyone else.
Contrary to the Tea (Republican) Party propaganda, the wealthy are greatly undertaxed and the rest of us are relatively overtaxed.