A brief look at the current tax cut affair going on in DC. As always, it is important to look back in history, to get a better context of what is happening today. When we do this, we see what "is" now, and how it got there, in a whole different, more critical light. What "is", wasn’t always so, even though most people don’t bother to see.
The Tax Foundation has a great PDF document, showing historical marginal tax rates and brackets, back to 1913. Keep in mind that although the highest marginal tax rates, say 50 years ago, were upwards of 70-90%, there were a ton of tax shelters that are no longer legal or available.
This graphic shows the brackets and how they have changed over the past 15-20 or so years. Note the growing number of brackets; this typically places a heavier burden on the top tiers, moving more people below the level of owing any Federal taxes, and ratcheting up the amount paid at higher levels – an already progressive tax system would become even more upside down:
Today, Liberals are ranting and going apoplectic about a "tax cut for millionaires", as if we’re going to be giving them money. They aren’t really getting a tax cut, they just are not getting an increase (a la Nancy Pelosi) – because the issue is whether to leave the tax rates as they are (and as they have been since 2003), or go back to something closer to what they were from 1993-2000. Remember those days, when Bill Clinton supposedly "created" a surplus? Well, its no wonder, when you look at those tax rates, and with the booming dotcom economy.
When you look at the table above, not extending the "Bush tax cuts" would favor lower-level earners (leaving the bottom 4 brackets alone), while simultaneously punishing high-level earners (reverting them back to 1993-2003 levels).
But the whole issue is being convoluted by Progressives, who insist on perpetuating this whole class-warfare campaign against anyone who makes any money; mostly those "anyones" include small and medium business owners. Progressives and Liberals have no choice but to wage this war (and set the tone as they are doing now), because none of their so-called "principles" have any merit, and the American people are sick of them – the only transparency in this administration are their so-called "principles".
Does it matter that the top 5% of earners who pay taxes, pay over 50% of the federal tax revenue? Does it matter that the top 3% of earners, spend over 33% of the money in this country? Any tax increase on them is going to cut short what spending currently exists, forcing them to save more of their money – a recipe for increased disaster.
Some may argue that the "rich" have the burden of paying a larger share of taxes, because we must collect the revenue necessary to running the country (aka "government"). My answer to this is – cut the spending – the Federal government is too big and out of scope – this whole discussion about taxes is moot.
The line of last defense for Progressives – blame the rich and anger the peasants, to keep tax rates high for the wealthy, which is the only way they can pay for their bloated government programs and social controls. This is all about "income equality" and "social justice" (social programs) to Liberals, Progressives, and Socialists, and we must fight it.