Post by Trades on Oct 27, 2017 10:17:43 GMT -5
Top 20% pay 95% of taxes, middle class 'single digits'
by Paul Bedard | Oct 27, 2017, 7:35 AM
www.washingtonexaminer.com/omb-top-20-pay-95-of-taxes-middle-class-single-digits/article/2638746
by Paul Bedard | Oct 27, 2017, 7:35 AM
Any tax cut for middle income earners will also provide a benefit for those further up the income scale, including the top 20 percent who pay 95 percent of all income taxes, according to the director of the Office of Management and Budget.
In explaining the complicated tax system the administration and congressional Republicans are trying to simplify, Mick Mulvaney played the role of professor at Georgetown University Wednesday night and dished the eye-popping numbers and impact of a middle class tax cut.
It came in a discussion before students of the school's Institute of Politics and Public Service at the McCourt School of Public Policy. The discussion was directed by Cathy Koch, a tax expert and former Senate aide.
When the two turned to the taxes the rich pay, Mulvaney declared, "The top 20 percent of folks who file a tax return, the top 20 percent, pay 95 percent of the taxes."
That may be the highest ever. Just two years ago, it was 84 percent, according to the Wall Street Journal.
He then explained:
His conclusion, "You could sit there and do nothing but lower the rates on the middle class, and all other things being equal, you're giving the rich a tax cut.
Paul Bedard, the Washington Examiner's "Washington Secrets" columnist, can be contacted at pbedard@washingtonexaminer.com
In explaining the complicated tax system the administration and congressional Republicans are trying to simplify, Mick Mulvaney played the role of professor at Georgetown University Wednesday night and dished the eye-popping numbers and impact of a middle class tax cut.
It came in a discussion before students of the school's Institute of Politics and Public Service at the McCourt School of Public Policy. The discussion was directed by Cathy Koch, a tax expert and former Senate aide.
When the two turned to the taxes the rich pay, Mulvaney declared, "The top 20 percent of folks who file a tax return, the top 20 percent, pay 95 percent of the taxes."
That may be the highest ever. Just two years ago, it was 84 percent, according to the Wall Street Journal.
He then explained:
If you break the income tax universe into what we call quintiles, so equal sized 20 percent columns, the first two columns, the first quintile and the lower quintile, don't pay any taxes at all. In fact they net positive. We pay them when they file a tax return.
That middle quintile, which you might describe, some people do, as middle class, pays an effective rate in the low single digits. And all of the taxes are paid by folks in the top two quintiles, and that last quintile pays almost fully, 95 percent I think, of the taxes.
People always ask all the time, ‘Why do you want to give a tax cut to the rich?' Here's the math. We have a progressive tax system, which means that if you make $1 million and I make $50,000, we both pay the exact same rate on the first, let's say, $20,000. And then, from the next $20,000 up to my $50,000, and her next $20,000 to her next $50,000, we pay the same, I think it's 12 percent of 15 percent, I can't remember where the brackets are right now. And then she goes on to pay her higher rate on the stuff that she makes and I stop.
Well, if you want to give me, the middle class, a cut, take my 15 percent rate down to say 10 percent, and that gives the middle class a cut. Guess who else benefits from that, she does. She pays that same rate on the way up the brackets.
That middle quintile, which you might describe, some people do, as middle class, pays an effective rate in the low single digits. And all of the taxes are paid by folks in the top two quintiles, and that last quintile pays almost fully, 95 percent I think, of the taxes.
People always ask all the time, ‘Why do you want to give a tax cut to the rich?' Here's the math. We have a progressive tax system, which means that if you make $1 million and I make $50,000, we both pay the exact same rate on the first, let's say, $20,000. And then, from the next $20,000 up to my $50,000, and her next $20,000 to her next $50,000, we pay the same, I think it's 12 percent of 15 percent, I can't remember where the brackets are right now. And then she goes on to pay her higher rate on the stuff that she makes and I stop.
Well, if you want to give me, the middle class, a cut, take my 15 percent rate down to say 10 percent, and that gives the middle class a cut. Guess who else benefits from that, she does. She pays that same rate on the way up the brackets.
Paul Bedard, the Washington Examiner's "Washington Secrets" columnist, can be contacted at pbedard@washingtonexaminer.com
