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October 10, 2007
By: Kevin Drum

THE WORLD IS SORT OF FLAT....Remember my post yesterday about the progressivity of the tax system? Well, it turns out that I didn't have to go to the trouble of digging up my own graphs to demonstrate that the overall tax system is only moderately progressive after all. All I had to do was go to the same think tank that was being quoted in the first place about the federal income tax.

The Tax Foundation may be a conservative outfit (they're the ones who bring you "Tax Freedom Day" every year), but they emailed to let me know that they produced a report of their own last year showing overall tax rates at various income levels. It shows that federal taxes are progressive, state taxes are about flat, and total taxes are modestly progressive. Basically, the tax rate for the average worker is 28% while the tax rate for the richest taxpayers is 34% (and probably a bit lower than that for the very richest taxpayers). That's not exactly a socialist hell.

Anyway, you can never have too many tax graphs, can you? I can't vouch for how accurate this one is (the methodology for this stuff is pretty tricky), but their numbers look like they're in the right ballpark to me. Just thought I'd pass it along.

Kevin Drum 1:08 AM Permalink | Trackbacks | Comments (46)

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Comments

Offtopic, but this headline and article at FARK seems like a good reminder of a past Bill O'Reilly statement that today became news again.
Kidnapper admits to torturing and sexually abusing Shawn Hornbeck for years. But two of the many fun activities at Bill O'Reilly's summer camp for rambunctious teen boys

Posted by: jerry on October 10, 2007 at 1:33 AM | PERMALINK

I often see these numbers on the X axis: 10th percentile, 90th percentile. I know what that means, but where do I fall? I've no idea!

Is there a mapping of AGI to percentile somewhere?

Posted by: Amit Joshi on October 10, 2007 at 1:42 AM | PERMALINK

WHAT?!?!

This is very progressive; the rich pay 250% higher tax RATE than the poor.

But the bottom line is that the gov't expenditures nationally are about $17,500 per person depending on where you live (NYC it's $20,000). So unless your family is paying $20,000 a year in taxes per person in the U.S. (for a family of 4 that's $80,000 in taxes), you are being taken care of by the hard working high earning elite (only 80% of U.S. millionaires are 100% self-made). Can you begin to grasp what this means for most people who pay no taxes (other than Social Security payments which are really mandated insturance premiums, not taxes)? A family of 4 in NYC paying $10,000 in taxes is getting $70,000 a year in benefits from the generous wealthy. And then families of 4 on welfare? They are getting anywhere up to $150,000 in imputed gov't benefits thanks to the US hard working wealthy. And how do welfare families [all of whom are Democrats] typically behave? Drugs, deliquency, crime, and more children to exacerbate the burden they are on the hard working U.S. wealthy.

In the US, it's the hard working high earners, disproportionatly Republicans, taking care of Democrats like infants and getting spit on (and robbed, etc.) for their troubles.

Sad.

TOH

Posted by: The Objective Historian on October 10, 2007 at 1:59 AM | PERMALINK

I think their argument basically boils down to "we like rich people more than other people, so rich people should get the best deal."

Pretty threadbare, but at least it's a philosophy, I guess.

Posted by: craigie on October 10, 2007 at 2:05 AM | PERMALINK

The published "rates" are rather misleading. As one gets into the higher brackets, there are many delightful loopholes that one can take advantage of, all perfectly legal. For example, capital gains taxes are nice and low. If one works for oneself, business deductions are numerous.

No, don't take the tax rates at face value.

Posted by: Bart on October 10, 2007 at 2:29 AM | PERMALINK

"This is very progressive; the rich pay 250% higher tax RATE than the poor."

Let's read that commie Adam Smith:

"The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities…" - Wealth of Nations, Book V


So, the poor are

Posted by: Sock puppet of the Great Satan on October 10, 2007 at 3:14 AM | PERMALINK

http://business.timesonline.co.uk/tol/business/money/tax/article1996735.ece
Buffett blasts system that lets him pay less tax than secretary
Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent.


Our tax system is regressive. The definitions and categories of income ensure that it is.

Posted by: i dunno on October 10, 2007 at 4:55 AM | PERMALINK

Two things I find wrong with this graph:

1) Lumping the top 20% together hides what's really going on. As the graph Kevin showed yesterday indicates, overall effective Federal tax rates are only slightly progressive from $50,000 up to $10,000,000, and then actually decline above that, so that the top 400 taxpayers are paying approximately the same overall Federal tax rate as those earning between $50K and $75K.

This is because capital gains and dividends are only taxed at 15%, and are exempt from the Alternative Minimum Tax, thanks to Bush's 2003 tax cut.

2) I don't know for sure, but I'd expect this to be doubly true for state taxes.

Many states don't have an income tax, relying mostly on sales taxes. Since they apply when you buy a gallon of milk, but not when you buy a share of stock (why not, dammit?!), they tend to hit the lower and middle parts of the spectrum most heavily, as a percentage of income.

And AFAICT, most states with an income tax have a top bracket that was set back in 1930 or so, when $10,000 a year was a lot of money. And now that top bracket really equates to a flat income tax.

So the combination of sales and income taxes should net out to a net regressive tax structure at the state level.

Posted by: low-tech cyclist on October 10, 2007 at 5:47 AM | PERMALINK

Sigh, another case of ignorance.

Ahem, Kevin, the EITC wipes out the payroll taxes for low/poor workers (that was what it was designed to do). Continually posting stuff like this without recognizing that the working poor - in effect - pay NO PAYROLL TAXES after getting their EITC credits is akin to pretending that people getting rebate checks really paid full price for products.

Why must you guys always be so blatantly dishonest?

Posted by: RW on October 10, 2007 at 6:41 AM | PERMALINK

Because, RW, income taxes aren't the only taxes the poor pay. So what's the bigger shame? That poverty level workers don't pay taxes? Or is it that they don't get paid enough to feed, cloth and house themselves w/o a tax break?

Posted by: Aaron on October 10, 2007 at 7:14 AM | PERMALINK

I'd suspect that Mr. Historian would be a little less hysterical if he were actually a poor person and discovered that most of the "average" money he is talking about doesn't get spent on him.

That "average" spending includes a hell of a lot of kickbacks to fat cats.

Posted by: MFB on October 10, 2007 at 7:58 AM | PERMALINK

l-t-c says: Many states don't have an income tax

Right, only 45 states have an income tax, so you're really on track there. (wiki, wiki)

and then: most states with an income tax have a top bracket that was set back in 1930

Sure, governors and state legislators are too stupid to find ways to increase funding so they just keep tax rates the same as in 1930? Mine own state, at almost 4% since 2004, has a flat rate on income with no brackets and except for the self-employed, no deductions.

You're welcome to form an opinion, but sheesh, at least fake like it's sensible.

Posted by: TJM on October 10, 2007 at 8:06 AM | PERMALINK

I suspect this graph is highly misleading. It demonstrates 'rates' but not taxes actually paid, as a percentage of income. With capital gains and dividend rates extraordinarily low, how could the top quintile be paying in excess of 34%? I'd like to see a graph of 'total taxation vs. income', with total taxation including the effect of ALL taxes, federal, state, and local, including sales tax... I suspect that the overall taxation as a percentage of income is virtually flat, as some analysts have said it is.

Posted by: Norm Bernstein on October 10, 2007 at 9:21 AM | PERMALINK

The Institute on Taxation and Economic Policy does a study called "Who Pays" looking at the state and local tax rates on each state. They say these taxes are regressive in almost every state. When you consider the source of state and local taxes: a regressive sales tax, regressive excise taxes, regressive property taxes, and progressive income and business taxes, its clear why in sum state and local taxes are regressive.

According to ITEP, the lowest 20% of earners pay 11.4% of their income in state taxes (after federal tax credit offsets), the next lowest pay 10.3%, the middle quintile pay 8.8%, the second highest quintile pay 6.5%, and the richest fifth pay 5.2%.

Like Kevin says, the math is tricky and assumptions must be made in doing the calculations, but I think in this area at least, ITEP is more believable that the Tax Foundation.

Posted by: Mike Emm on October 10, 2007 at 9:24 AM | PERMALINK

. . . (only 80% of U.S. millionaires are 100% self-made). Posted by: The Objective Historian

No they aren't. Most of the wealthiest individuals in the U.S. and around the world either inherited their money or they make their money as grossly over-paid CEOs and the like.

A "self-made" millionaire (meaning actually a multi-millionaire as a million dollars in assets is fairly unremarkable by today's standards) is a person who starts with little or nothing (meaning that he or she has risen from a background of little economic or educational advantage) and builds his or her wealth. Warren Buffet or Les Schwab fit this profile while Bill Gates and the heads of the major financial firms don't.

I suspect this graph is highly misleading. It demonstrates 'rates' but not taxes actually paid, as a percentage of income. Posted by: Norm Bernstein

Exactly. Most corporations and wealthy individuals rarely pay taxes equal to the bracket they actually fall into.

Posted by: JeffII on October 10, 2007 at 10:24 AM | PERMALINK

It not clear to me whether the chart includes Social Security and Medicare withholding. If it doesn't, taxes are even less progressive than the chart would have you believe.

Posted by: Mel on October 10, 2007 at 10:55 AM | PERMALINK

Why is it that supposedly seriously economically minded conservative advocacy groups like this are always so misleading in how they present tax numbers? Sure, if you look at the top 20 percent it looks like the tax rate is pretty progressive, but they really neglect to show what income groups this includes. The "top 20 percent" group in the country probably doesn't start too much beyond $100,000/yr, and while that's a comfortable income, how many making that and living in New York City really feel that they're among the "rich"?

The latest political maneuvering of the pro-rich tax advocates has really been about hiding the very low tax rates of the top 1% or 5% behind the harshest tax rates of the people around the $100k/yr area. If they wanted to honestly discuss the actual progressivity or regressivity of the tax system, they would need to really include all relevant tax groups ($100k earners are very different than $1m earners as far as tax liability).

Personally, I don't see why in this day of sophisticated financial calculations we have discreet tax brackets at all. Flat tax advocates go on about simplicity, and it seems that we'd get just about all those simplicities by just picking a basis for generating a continuous progressive curve and going with it. Then there are no perverse incentives to avoid crossing arbitrary barriers that cause tax liability to jump. And all the progressive vs regressive arguments could be just about tweaking one number, and not so dependent on what different groups people might be unfairly being thrust into.

Posted by: Will on October 10, 2007 at 10:59 AM | PERMALINK

we'd get just about all those simplicities by just picking a basis for generating a continuous progressive curve and going with it.

I've been arguing for that for yrs.

Posted by: Disputo on October 10, 2007 at 11:12 AM | PERMALINK

The most misleading part of this graph is the combined taxes bar. As others have noted, a significant portion of state and local taxes come from sales and other regressive taxes on consumption, not income. A more accurate graph would plot taxes paid as a percentage of income, but that would hardly paint the picture desired by the Tax Foundation.

Posted by: dob on October 10, 2007 at 11:13 AM | PERMALINK

Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent.

Buffett only pays his secretary $60k?!

Posted by: Disputo on October 10, 2007 at 11:14 AM | PERMALINK

Ummm... some serious reconciling has to be done between the graph in this post and the 2nd graph of your prior post (the one from the New York Times that's titled "Spreading The Tax Bite Around" at http://www.washingtonmonthly.com/archives/individual/2007_10/012212.php).

These two graphs look absolutely nothing alike even though both claim to be calculating an effective tax rate for federal, state, & local taxes by income quintile.

In "Spreading The Tax Bite Around" (which if you click the NYT link in the old post, seems to be taken directly from an official Labor Dept. report "The Consumer Expediture Survey" for 2001) no quintile has a total federal, state, & local effective tax rate greater than 19%, which is the top quintile.

In sharp contrast, in your graph from this post (which is from the Tax Foundation itself and for 2004, not 2001), the top quintile is paying 34.5% and indeed all the quintiles other than the bottom are paying at least 23.5% !

Specifically, the comparison is

Lowest quintile = $7,946 average 2001 pretax income per year (from old post drawing on 2nd graph, which drew on Labor Dept. "Consumer Expediture Survey"), 18% effective rate in 2001 (ditto) versus 13% in 2004 (from new post drawing on chart from Tax Foundation website)

2nd quintile = $20,319/yr, 14% vs. 23.2%

Middle quintile = $35,536/yr, 16% vs. 28.2%

4th quintile = $56,891/yr, 17% vs. 31.3%

top quintile = $116,666/yr, 19% vs. 34.5%

Again, these look *absolutely nothing* alike even though both draw on Tax Foundation data (again the former numbers appear prepared by the Department of Labor for 2001, whereas the latter are prepared by Tax Foundation itself).

So, I'd say either:

(1) the 1st term of the Bush administration caused a massive increase in the progressivity of the tax code from 2001 to 2004

or

(2) even the Bush Administration Labor Department analyzing in 2003 the data for 2001 is nowhere near as partisan-hacky as the Tax Foundation was analyzing the 2004 data.

I'm betting on (2).

Posted by: Bill Kaminsky on October 10, 2007 at 11:25 AM | PERMALINK

Look Kevin, you don't get it. To the right wingers, anything but a flat single sum tax (not the rate but the tax) applied per person is progressive. After all, it costs the government more to pay for a poor person than for a rich person, so the poor should pick up the larger share of those costs. Just by having everyone pay the same amount per head is progressive when looked at in that light.

Posted by: walldon on October 10, 2007 at 11:41 AM | PERMALINK

That's not exactly a socialist hell.

Furthermore, as the mean income continues to rise, the total tax take continues to rise at a somewhat higher rate. And, the marginal tax rate is more highly progressive, so when you earn a pay raise, the raise is taxed at a higher rate than the base. Lastly, the federal income tax was made more progressive when the Bush tax cuts were passed.

I agree with the statement that you can't have too many tax graphs. Taxes are a source of endless consternation and amusement.

Posted by: MatthewRmarler on October 10, 2007 at 11:53 AM | PERMALINK

Lastly, the federal income tax was made more progressive when the Bush tax cuts were passed.

Interesting def of "progressive" you're using there.

Posted by: Disputo on October 10, 2007 at 12:01 PM | PERMALINK

If you click on the graph, you'll find the entire methodology spelled out -- how they allocated each tax as well as the income measure used. And the study presents the data in tons of different ways. Also, the appendix looks at it when you have alternative assumptions regarding tax incidence, including one under the assumption that Bush hasn't even cut taxes -- because he has just deficit financed it all. While the Tax Foundation may be viewed as conservative in some of its rhetoric, this piece provides a pretty informative and fair assessment of who pays the total tax burden, as well as being very open in how they got the numbers they did.

Also, the study looks at who receives government spending. And it even shows that the top 20 percent gets just as much in government spending as bottom 20 percent. And again, the study details everything on how they allocated spending, as well as showing alternative assumptions, including an assumption that the wealthy benefit more from defense spending than others.

Posted by: Jeff on October 10, 2007 at 12:04 PM | PERMALINK

as well as showing alternative assumptions, including an assumption that the wealthy benefit more from defense spending than others.

Well, duh. Nice of them to deprecate the obvious by terming it "alternate".

Posted by: Disputo on October 10, 2007 at 12:14 PM | PERMALINK

Buffett only pays his secretary $60k?! Posted by: Disputo

If this is true, Buffett's legendary "frugality" borders on the cheapness.

I have a friend who is a successful contractor who builds multi-million dollar homes (remodeled the house that the Gates' live in before the "compound" was finished). His lead carpenter makes six figures.

Posted by: JeffII on October 10, 2007 at 12:51 PM | PERMALINK

The point was that they aren't hiding anything like is convenient of most of the work on this type of issue. Furthermore, almost all of their tax assumptions are exactly the same as CBO.

Posted by: Jeff on October 10, 2007 at 12:54 PM | PERMALINK

Are you including FICA and Medicare taxes in this. I think the tax on the poorer sector as percent increases when these are taking into account. Also, it gets even worse when sales taxes are added and so on.

Posted by: George on October 10, 2007 at 12:57 PM | PERMALINK

They are getting anywhere up to $150,000 in imputed gov't benefits thanks to the US hard working wealthy

Actually, a significant portion of that $150,000 is borrowed from China & Japan, not "taken" from rich people.

Posted by: Jenna's Bush on October 10, 2007 at 1:00 PM | PERMALINK

The main problem I have with that graph is that their "state and local taxes" do not match up with the half dozen or so other estimates I have dug up over the years all of which agreed very closely on the nature of state and local taxation.

For example, here is on I just googled up:
http://gatton.uky.edu/CBER/Downloads/hoyt00.htm

Figure five has a dashed line for US average state and local taxes by income.
It goes something like:
20--12.5%
40--10%
60--9.5%
80--8.5%
94--7.5%
99--6.5%
100-6%

While the tax foundation says it is roughly:
20-7.5%
100-10.5%

So the tax foundation says state and local taxes are slightly progressive, and every other source I have seen (not that I have done an exhaustive search, I have just looked at half a dozen or so fairly google selected reports, mostly from state governments) says they are regressive.

If I adjust their total tax rates to replace their anomalous state and local tax burdens the results are:
20--18%
40--23%
60--27%
80--28%
100-32%

Which basically agrees with other estimates of total taxation I have seen. The bottom two quintiles pay significantly less, but the tax system is nearly flat above that, and we have no idea about the top 1%, .1%, etc (which was interesting new data to me in that new york times graphic).

Originally I found this information in the "Washington state tax structure study report", which is easily googled. Washington's state and local taxes are actually worse than the national average largely because there is no state income tax.

Posted by: jefff on October 10, 2007 at 1:07 PM | PERMALINK

The point was that they aren't hiding anything like is convenient of most of the work on this type of issue. Furthermore, almost all of their tax assumptions are exactly the same as CBO. Posted by: Jeff

By "assumptions" do you mean what the tax code, sans loop holes, says people are supposed to pay versus what they actually pay?

The working poor and middle-class don't have loop holes because they aren't involved in fantastically complex investments designed to dodge taxes or are under-taxed at best (unearned income should always be taxed higher than earned income).

In either case, a 25% tax rate for someone making $40K/year is a much larger chunk out of their earned income than 25% on $200K/year earned income versus 25% on $20M/year income, little of which is likely to be really earned through meaningful or useful work.

Posted by: JeffII on October 10, 2007 at 1:12 PM | PERMALINK

"...half a dozen or so fairly google selected reports, mostly from state governments) says they are regressive."

Of course, these reports probably often get the data from the CBO or somewhere else in common, still nobody else seems to use the numbers the tax foundation has.

Posted by: jefff on October 10, 2007 at 1:12 PM | PERMALINK

If things are moderately flat, then why not a flat 10% tax, no deductions? Makes everything simpler and the right wing is with it.

Posted by: whenwego on October 10, 2007 at 1:15 PM | PERMALINK

"If things are moderately flat, then why not a flat 10% tax, no deductions? Makes everything simpler and the right wing is with it."

Reason 1:
If things are moderately flat now with a fairly progressive income tax making up a very large slice of revenue what do you predict that they would look like if the income tax was made flat, reduced, and all the other taxes that are making the overall tax system less progressive were increased to make up the lost revenue?

Reason 2:
That 10% isn't nearly enough to pay for the government, you don't get to just magically cut federal, state and local spending 50%, or start borrowing 10% of gdp every year from china.

Posted by: jefff on October 10, 2007 at 1:21 PM | PERMALINK

Taxes are a source of endless consternation and amusement.

And disingenuous postings by Republican apologists like Marler, I might add.

Posted by: Gregory on October 10, 2007 at 1:54 PM | PERMALINK

What's funny is that the study you link to uses the ITEP data as a source, which is what was mentioned earlier. And they only look at married couple families in their analysis. They ignore half the population. That's why the numbers are so much different.

Posted by: Jeff on October 10, 2007 at 1:57 PM | PERMALINK

Kevin,

I assume that social security and medicare taxes are included along with income taxes in these graphs because the bottom quarter or third doesn't pay any income taxes at all.

Posted by: DBL on October 10, 2007 at 2:20 PM | PERMALINK

"What's funny is that the study you link to uses the ITEP data as a source, which is what was mentioned earlier. And they only look at married couple families in their analysis. They ignore half the population. That's why the numbers are so much different."

In order for this to be true state and local taxes would somehow have to be highly progressive for single people, while still being highly regressive for families.

To average out the ITEP numbers to get the tax foundation numbers the rates for whoever you claim ITEP is neglecting, and assuming that as you say they are half the population would have to be:

20--2.5%
40--11%
60--11.5%
80--12.5%
100-13.5%

I find those rates completely unbelievable on their faces given the composition of state and local taxes, and I find it even more unbelievable that the rates could differ so much between unmarried and married people, further I find it unbelievable that states would set up their tax systems with such a bias. The biases in the federal tax code run the opposite direction because there is a political gain from enacting apparently family favoring laws.

No, the data just don't match. At least one of them is wrong.

Posted by: jefff on October 10, 2007 at 3:18 PM | PERMALINK

The usual Tax Foundation scam is to not count capital gains as income, but to count capital gains taxes as taxes. This makes the tax system look much more progressive than it really is.

I skimmed the PDF at the link and didn't find a clear statement of how they treat capital gains. I may have overlooked it, but my working assumption is that it's just their usual fakery, and shame on Kevin for granting them the presumption of honesty.

Posted by: Steven desJardins on October 10, 2007 at 3:32 PM | PERMALINK

No they aren't. Most of the wealthiest individuals in the U.S. and around the world either inherited their money or they make their money as grossly over-paid CEOs and the like.

Not true, but that probably won't stop you from believing it. After all, if it turns out that they earned their wealth, it makes looting it from them a lot more morally difficult.

Of the Forbes 400 richest people, 74 inherited their entire fortune, and 270 are entirely self-made.

Taking it down a notch or two in income, a book on millionaires uncovered these numbers in their research on millionaires:

* Only 19 percent receive any income or wealth of any kind from a trust fund or an estate.

* Fewer than 20 percent inherited 10 percent or more of their wealth.

* More than half never received as much as $1 in inheritance.

* Fewer than 25 percent ever received "an act of kindness" of $10,000 or more from their parents, grandparents, or other relatives.

* Ninety-one percent never received, as a gift, as much as $1 of the ownership of a family business.

* Nearly half never received any college tuition from their parents or other relatives.

* Fewer than 10 percent believe they will ever receive an inheritance in the future.

Posted by: harry on October 10, 2007 at 4:53 PM | PERMALINK

Conservatives usually justify low tax rates (for anyone) on the basis of incentives. For this you should look at marginal rates (for wages, the standard tax bracket rates), not total taxes paid. For wages, this rate reaches a temporary maximum at the SS cap (about $97000), dips sharply, then increases weakly. Higher income people typically get more income as capital gains and dividends, which are taxed at lower rates. Thus real marginal federal rates on income peak at around the SS cap and are regressive above.

Note that self-employed persons, supposed to be important in the U.S. economy, pay double the wage rate for SS payroll taxes, so for them the wage tax rate actually does peak at the SS cap.

Posted by: skeptonomist on October 10, 2007 at 4:59 PM | PERMALINK

The folks commenting on how looking at the upper 20% is masking what is really going on are right on target. The folks who own a small business or are highly paid professionals pay the highest taxes. Folks making more than $500,000 a year start getting paying a lower and lower rate. When you are making millions you are usually paying about 17% for federal taxes. This isn't an accident. By making small business owners and professions pay very high taxes (unfair considering what the super-rich are paying) you are creating a large, influential, anti-tax group. And this benefits the folks running this country, the super-rich who are paying a pittance in taxes and making a killing at everyone else’s expense.

Posted by: lownslowav8r on October 10, 2007 at 5:07 PM | PERMALINK

The entire government administration of "money" is even less progressive than those graphs appear, for the oft-neglected reason of how the money supply works. Not a hard-currency, the monetization of debt inflates the money supply in a way most advantageous to the already wealthy, investors, etc. (Note: inflation of money supply and inflation of prices are related but not equivalent.)

Posted by: Neil B. on October 10, 2007 at 5:28 PM | PERMALINK

The Tax Foundation may be a conservative outfit (they're the ones who bring you "Tax Freedom Day" every year), but they emailed to let me know that they produced a report of their own last year showing overall tax rates at various income levels.
=====================================================================================================
Ahhhhhhh..........Kevin? Bet your ass it is conservative. If you compare this graph with the one you posted Monday, you will find they come to wildly differing conclusions. Considering the sources listed on Monday's graph, I would bet it is the more a accurate.

Economics = the science of making figures lie.

Posted by: bob in fl on October 10, 2007 at 9:03 PM | PERMALINK

Steven desJardins writes:

"The usual Tax Foundation scam is to not count capital gains as income, but to count capital gains taxes as taxes."

If you do a text search of the PDF, there's a clear discussion of their treatment of capital gains income on page 104-105, with cites to the Treasury methodology and other studies.

It's depressing that most of the people on this thread are no better than the right-wing nuts they criticize. It's clear that almost no one actually read the linked study.

The idea of dismissing as "hackery" or "dishonest" such a comprehensive study that outlines all its methods and sources, and that even has an entire chapter warning about "limitations" of the study, is just totally nuts. That study is far more transparent than the vast majority of work from ITEP or even the Tax Policy Center.

You folks should try being a skeptic and questioning your own ideology once in a while, rather than simply dismissing people out of hand in a totally non-intellectual fashion without actually reading their work.

Posted by: Dave on October 12, 2007 at 8:19 PM | PERMALINK




 

 

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