The left would have you believe that 1 percenters like Warren Buffett and Mitt Romney are the poster boys for a tax system that favors the rich. Enter James Ross, a 1 percenter who paid 102% of his 201o taxable income in federal income, state income local taxes.
James Stewart of the Associated Press has the story:
Meet Mr. 102%.
James Ross, 58, is a founder and managing member of Rossrock, a Manhattan-based private investment firm that focuses on commercial real estate and distressed commercial mortgages. “I realize I am very fortunate, and in fact I am a member of the 1 percent,” Mr. Ross wrote in an e-mail. His résumé is studded with elite institutions: Yale, Columbia Law School and stints at the law firms Cravath, Swaine & Moore in New York and Holland & Hart in Denver. Since his company fits the category of private equity, he even has carried interest, the kind of incentive compensation that enabled Mitt Romney to pay such a low tax rate.
Yet Mr. Ross told me that he paid 102 percent of his taxable income in federal, state and local taxes for 2010. “My entire taxable income, plus some, went to the payment of taxes,” Mr. Ross said. “This does not include real estate taxes, sales taxes and other taxes I paid for 2010.” When he told friends and family, they were “astounded,” he said.
In the midst of a national debate over tax rates and tax policy, I lifted the veil last week on my income tax rates for 2010, a year in which I paid 37 percent of my adjusted gross income in federal, state and city income taxes and 74 percent of my taxable income. (Adjusted gross income — your total income minus retirement plan contributions, tax-exempt interest and other specified exclusions — is usually higher than taxable income, which is adjusted gross income minus your personal exemptions and itemized deductions. So taxes as a percentage of taxable income are almost always higher.)
This story illustrates why in evaluating whether or not our tax system is tilted in favor of the very rich we must take the 1% as a whole rather than pluck out a few members of the group whose tax rates confirm our bias. Deep down progressives understand this. But because the facts don’t support their tired (and politically necessary) argument that the rich are not paying their fair share of taxes, they dishonestly point to isolated instances of very rich people paying very low tax rates and trust that the masses will extrapolate the isolated undertaxation to the entire 1%.
The truth the left is so desperate to avoid is that the very system it insists unfairly favors the rich results in the top 1 percent paying 37% of federal income taxes and the bottom 50% paying less than 3% of federal income taxes.
Courtesy of the IRS, here are the numbers the left either suppresses or outrightly lies about:
Who Pays Income Taxes and How Much?
Tax Year 2009
|
Percentiles Ranked by AGI |
AGI Threshold on Percentiles |
Percentage of Federal Personal Income Tax Paid |
|
Top 1% |
$343,927 |
36.73 |
|
Top 5% |
$154,643 |
58.66 |
|
Top 10% |
$112,124 |
70.47 |
|
Top 25% |
$66,193 |
87.30 |
|
Top 50% |
$32,396 |
97.75 |
|
Bottom 50% |
<$32,396 |
2.25 |
| Note: AGI is Adjusted Gross Income Source: Internal Revenue Service | ||
4 responses so far ↓
1 allan // Feb 6, 2012 at 12:13 pm
This is just the right argument to have.
The fight is rich v. rich, not poor v. rich.
The tax code is unfair to high earners when compared to investors (in anything but real estate)…
2 JD // Feb 7, 2012 at 10:03 pm
It is conservative to feel that two people with the same income should pay the same amount, and that disparity should be fought. However, so long as nutcases are holding our country hostage, we cannot simply give them the sole piece of sane policy they want without extracting concessions in other areas, where they are crazy. Conceding tax equalization among the rich without some progress against the nanny state would be a mistake. Unfortunately, sane behavior is distorted by electioneers.
3 JD // Feb 7, 2012 at 10:04 pm
I wish conservatives would stop using these “rich pay X% of the country’s total taxes” lines. They play right into the Left’s “that’s because the rich have all the money” argument. We need to stick to effective tax rates, not gross dollars paid, unless dollars paid are being related to benefit from government. Raw dollars paid, though, is a bad argument to make.
4 Peter // Feb 9, 2012 at 12:09 am
JD,
I disagree. We point to the percentage of taxes paid by the rich only because it refutes the left’s insidious and repetitive lie that the rich don’t pay their “fair share.”