America's Richest Will Pay More Under Obama's Tax Plan

By Sam Pizzigati, Too Much: A Commentary on Excess and Inequality. Posted August 1, 2008.

The ideologues who manage the Wall Street Journal's editorial pages have emerged, over recent years, as America's most unrelenting -- and shameless -- defenders of wealth and privilege. They enjoy the work. They do it well. No one turns reality upside-down any better. Take, for instance, the Journal editorial last week that defended George W. Bush from charges that his administration tilts to the wealthy. George W.'s tax policies, the Journal pronounced, have actually "caused what may be the biggest increase in tax payments by the rich in American history." Any Bush "giveaway to the rich," the Journal editorial added, exists only as "a figment of the left's imagination." The Journal offered some evidence for these bold assertions. According to just-released IRS statistics, the paper noted, America's richest 1 percent paid 40 percent of all income taxes in 2006, their "highest share in at least 40 years."

Case closed? Not quite. The rich, as a group, are indeed paying a larger share of the nation's income tax dollars, but only because they're pocketing a much larger share of the nation's income. As individuals, the IRS data show, the rich are actually paying less -- far less -- of these incomes in taxes than they have in years.

In fact, if average taxpayers in the top 1 percent had paid taxes in 2006 at the same rate as the top 1 percent paid taxes 20 years ago in 1986, those average top 1 percent taxpayers would have each paid $136,518 more in 2006 taxes than they actually did.

What do the McCain and Obama campaigns feel about this top-tilting tax status quo? Both campaigns had a chance to explain last week in the nation's capital, at the 2008 Presidential race's first debate devoted purely to taxes. The host for the event: the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, two bedrock pillars of the capital's policy wonk community.

Tax Policy Center researchers last month published a preliminary analysis of just how the McCain and Obama tax plans would likely play out. The researchers unveiled an updated analysis at last Wednesday's debate, 56 dense pages of numbers and charts.

But one set of numbers stood out in that numerical mass: the Tax Policy Center's comparison of which Americans would pay more in taxes under the McCain and Obama plans and which would pay less.

Under the McCain plan, the Tax Policy Center figures indicated, Americans in the top 0.1 percent -- that's everyone making at least $2,871,682 -- would average $192,645 less in taxes in 2012 than they would if the current tax situation were simply extended.

See more stories tagged with: bush, obama, mccain, tax policy

Sam Pizzigati is the editor of the online weekly Too Much, and an associate fellow at the Institute for Policy Studies.

Liked this story? Get top stories in your inbox each week from Corporate Accountability and WorkPlace! Sign up now »