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Home Publications Blogs Beat the Press NYT Gets Taxing the Rich Story Right

NYT Gets Taxing the Rich Story Right

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Wednesday, 21 September 2011 04:43

President Obama made a simple and true statement in his speech on the budget Monday. He said that there were millionaires and billionaires who pay tax at a lower rate than middle income families.

Many news outlets went to town to point out that on average millionaires and billionaires pay tax at a higher rate than middle income families. Of course this is not what Obama said. He was pointing out that some of the richest people in the country (Warren Buffet was his model), get most or all of their income as capital gains and therefore only pay taxes at the 15 percent capital gains rate.

The NYT gets this right today. Other outlets could have saved a lot of trees and better served their readers if they didn't work so hard trying to refute something that President Obama did not say.

Comments (9)Add Comment
whats the matter with kansas taxes?
written by frankenduf, September 21, 2011 9:06
yeah, and how do u explain average people defending a regressive tax system for the rich?- my guess is learned helplessness
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written by steve, September 21, 2011 10:42
Usually, the media refers to the tax paid as a percentage of "taxable income" as defined in the Internal Revenue Code. But that is not the income received for services or on capital. It is after all kinds of deductions, exemptions, and credits, such as the mortgage interest deduction. The interest deduction a person might have for owning several houses has nothing to do with his "gross income". The actual tax paid as a percentage of gross income would be much less than the media usually refers to.
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written by bmz, September 21, 2011 11:35
Actually, the highest marginal taxes are paid by middle-class retirees.I am 70 years of age, and am self-employed part time. My AGI is ~$54,000/yr. At that income, I must pay, in addition to my regular tax, a tax on 85% of my SS benefits( for every marginal dollar of income, I pay a tax on $1.85). My total marginal income tax rate is: 25%(regular rate) +21.3%(85% on SS) +12.4%(self-employment tax) +7.5%(state income tax) = 66.2% total marginal income tax rate.
Part of what he said was clearly implication
written by Bill H, September 21, 2011 11:52
"All I’m saying is that those who have done well, including me, should pay our fair share in taxes to contribute to the nation that made our success possible. We shouldn’t get a better deal than ordinary families get."
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written by jumpinjezebel, September 21, 2011 12:15
Seems like a thoughtful position should be that your taxes on capital gains and dividends should be taxed at the same rate as the rest of your earnings. So the lower income people would pay a lower percentage rate than the rich.
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written by Kat, September 21, 2011 12:18
@frankenduf
But it is not the average person that is defending a regressive tax policy, unless your definition of "average" includes the pundit class.
It is time to put the Thomas Frank away. The real mystery to me is not that lower and lower middle income voters have been duped into voting against their best interests, it is that the reasonably comfortable have been duped into believing that they somehow are not working class. My definition of working class is you have to work for a living. Period. You don't have wealth that will support you in a period of protracted employment. No amount of education is going to save you. Unfortunately, "liberal" publications such as the NYT have helped to spread this lie.
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written by Jethro, September 21, 2011 11:01
Warren Buffett - you can't even be serious about this discussion, can you ?
ME: 10% on my $2M is $200,000 and now I am down to $1,800,000
Buffett: 10% on his $40B is $4B and now he is down to $36B
Of course he doesn't have a problem with this concept !!!! Any idiot can see this... Get serious and stop talking about the anomalies in society. Buffett is a freakin smurf for crying out loud, a Disney character. He is not living in the real world......
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written by Kat, September 22, 2011 7:44
Yes Jethro, the case for progressive taxation is a strong one.
Who pays matching FICA
written by Floccina, September 22, 2011 12:38
Who pays matching FICA?
Who pays the corporate profits tax?
Who captures the benefit from the Muni bond exemption?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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