Mythbusting

Courtesy of Randall Hoven at AT.  Too good not to share.

I’ve excerpted – go to the article itself for full details and commentary.

If you look at the data in just that one IRS table, you can debunk virtually every myth that Democrats have been propagating about taxes for at least the last eight years.  (For reference, AGI is adjusted gross income; it is how much you make before deductions.)

Myth 1:  Rich people don’t pay taxes.

Fact:  Yes they do.  And be glad they do.  Those making over $200,000 in 2004, though being only 2.3% of all tax filers, paid 47% of all individual income taxes.

Myth 2:  But that’s only because the rich make so much more money.

Fact:  That same group of tax filers accounted for only 26% of individual income (AGI).  Repeat: they made 26% of the money but paid 47% of the taxes.

Myth 3:  But the rich don’t pay as high a percentage as the rest of us.

Fact:  Those making over $200,000 paid an average of at least 21% in income taxes on average, while those making $30,000 or less (over half of all filers) paid 5% or less.

Myth 4:  Bush’s tax cuts only benefitted the super-rich.

Fact:  Go to that same column labeled “Income Tax as Percent of AGI.”    That column shows average tax rates in 2000 (before Bush’s tax cuts) and 2004 (after the cuts).  Note that the tax went down for every single income group. 

Myth 5:  We should cut taxes for 95% of the people.

Fact:  If 95% of people do not even pay income taxes, how can you cut their income tax?  Not every one even has to file a tax return.  Of those that did, the lowest 18% paid zero income taxes.  Zero.  By the time you chop off the “rich” (those making over $200,000 in 2004), you have less than 80% to play with.

By the way, when George W. Bush cut taxes, he cut them for 100% of the people who paid them.  (Check the IRS table.)

Myth 6:  The really rich know how to get out of paying taxes; they don’t show up in these tables.

Fact:  Even if true, those who made over $100,000 (that they couldn’t hide) paid 68% of all income taxes while comprising less than 10% of all tax filers. 

Myth 7:  But cutting taxes reduces revenues and therefore increases deficits and our debt load.

Fact:  In 2006, after Bush’s tax cuts were in full effect, the federal government took in 18.4% of Gross Domestic Product.  Now look at averages prior to 2000. 

As the top marginal rate on individual income varied between 28% and 92% over the last 60 years, the amount of federal revenue has consistently hovered around 18% of GDP that whole time.  In fact, revenues were generally less when the top rate was peaking at 91% and 92% (1951-1963).

Myth 8:  The “rich” are somebody else.

Fact:  Not if the person saying that is a Congressperson.  A rank-and-file Congressperson makes $169,300 per year in 2008 in salary alone.  Nancy Pelosi, as Speaker, makes $217,400.  Even if they and their spouses make no other income, they are still in the top 5% and are all above Joe Biden’s threshold of $150,000.  In fact, of 435 Congressmen, 123 of them made $1 million or more in 2003 (that is income, not net worth). 

Myth 9:  The Communist Manifesto’s second plank is, “A heavy progressive or graduated income tax.”

Fact:  That’s not a myth.

Clear enough?