Ross Douthat points out an interesting example of a contrast in conservative intellectual syles: call it honesty vs. hackdom.
Government has been robbing Peter to pay Peter. The similarity between the tax proportion for the high-income family and that of the middle-income family will surprise many. That's because the federal income tax, which is steeply progressive -- the higher your income, the more you pay in taxes -- gets all the media attention. But other taxes that are less visible, such as sales taxes, hit lower-income families with a heavy thud and quickly fill in the gap between their lower federal income taxes and the higher rates paid by those with high incomes.This is an important insight: not only does it illustrate how absurdly regressive our tax code has become - families earning $50,000 pay the same amount in overall taxes as those earning $150,000 - it reveals the political sleight-of-hand that has brought this situation to pass. Of course, Hassett's conservative perspective still comes through: one could re-write the paragraph I emphasized above to point out that "politicians get to pretend that they are virtuously cutting middle-class taxes, and they can maintain that fiction without sacrificing the economic interests of their wealthy supporters." But the formula is the same.
This is evident in the calculations that went into this chart. The federal income tax in 2003 for the family earning $50,000 was about $3,800, whereas it was about $17,500 for the family bringing in $150,000. But everything else worked to more than offset this difference. Middle-class families spent a larger share of their income and thus paid more sales tax. Gasoline and property taxes also ate up a larger share of the middle-class family's budget. Finally, the payroll tax is limited to 15.3 percent of income, so the wealthy paid a smaller share.
Governments at all levels have voracious appetites for cash, but taking revenue from the middle class is a politically risky maneuver; after all, that's where the votes are. So lawmakers have crafted ingenious ways around the dilemma, imposing hefty levies on those with lower incomes but relying on stealth taxes to do it. If you're going to tax widows and orphans, you'd better be quiet about it; use a sales tax.
Government thus takes more from the wealthy through income taxes, but extracts more from the poor with all the other taxes. By doing this, politicians get to pretend that they are virtuously redistributing wealth from the richer to the poorer, and they can maintain that fiction without sacrificing the cash. Voters seem to like this approach.
Fleischer waxes indignant about how the top 1 percent is paying a higher share of the tax burden than it was 25 years ago. The reason this is true, of course, is that the top 1 percent is earning a far higher share of the national income.Fleischer insists it's because they're paying higher tax rates. He cites a study last year by CBO which, he says, shows that since 1979, the "[The top 1 percent] share of the nation's income has risen, but their tax burden has risen even faster."As refreshing as it is to see honest analysis of an important issue by a conservative like Hassett, it's deeply depressing that hacks and liars like Fleischer are not only considered equally important voices, but are actually governing this country. I'm glad Douthat demands a higher standard from conservative discourse; I wish more of his compatriots would do the same.
I found that study, and it shows just the opposite of what Fleischer says. In 1979, the highest-earning 1 percent of taxpayers paid an effective federal tax rate of 37 percent. In 2004, they paid an effective federal tax rate of 31.1 percent.