This was hilarious, sort of, if it weren’t depressing. I met one of the one percenters who sees himself as a victim.
I was at a party Friday night, and probably the only progressive there. This guy starts railing at me after I let it be known I think Obama is too far to the right. I don’t know a lot about the guy, but I’d heard from enough people how well he does that his membership in the top one percent was a safe assumption. He easily could be in the top point one percent.
His chief complaint? The “top one percent pay 47% of the income tax in America.”
So, I asked him: “What percent of the income flows to the top one percent?” After an uncomfortable five seconds or so, another person chimed in with what he thought was the answer. The few seconds of silence, however, was long enough to make clear what I suspected. He had worked himself into a lather over the share of the income tax paid by the top one percent, without even knowing their income share. My guess is that he heard the statistic on Fox News, from an anchor who expressed anger similar to his own. It’s one of their favorite talking points.
Of course, his anger made as much sense as being angry at your kid for getting a 50 on her math test before bothering to find out that there only were 50 points possible and the kid with the second highest grade scored a 44.
I didn’t have enough control of the discussion to do so then, but here’s what I hoped to explain to this angry one percenter, who clearly felt victimized by Obama:
There are two factors that influence the share of the income tax paid by the top one percent: (1) the rate of tax on the one percent relative to the rate of tax on everyone else, and (2) the share of the income flowing to the top one percent.
So, why is the share of the income tax paid by the one percent where it is today? Since 1980, the rate of tax on the top one percent has fallen dramatically relative to the rate of tax on everyone else. In 1980, the top income tax rate was 70%. In 2011, the last year for which data was available, it was 35%, and the rate on dividends and capital gains, which flow mainly to the top one percent, was a mere 15%.
If the income share of the top one percent had stayed constant, the one percent’s share of the income tax burden actually would have decreased substantially since Reagan took office.
But it hasn’t of course. The share of the income tax paid by the one percent rose during the terms of Reagan, Bush I, Clinton, and Bush II. It actually fell slightly during Obama’s term, although the stats for the last year or two are not yet available, when the upward trend likely resumed. The percentage has climbed from the low 20’s to the high 30’s. [Yes, the guy was dead wrong on his 47% number. Who knew?] It peaked at the end of Bush II’s term.
Why? Because the share of the income flowing to the top one percent has skyrocketed. It’s more than doubled. Imagine that? The share of the tax burden borne by the top one percent has increased because their share of the income has increased. The horror!
I left the conversation shortly after my exchange with the guy, but ten minutes later he still was screaming (yes, screaming) about the 47% share of the income tax paid by the top one percent.
I wonder if he knew the percentage was higher in W. Bush’s term than under Obama? Doubt it.
And I wonder if he ever considered the other taxes people pay, particularly employment taxes and sales taxes. The one percent pay a disproportionately low share of those taxes when compared to their share of total income. Except they don’t discuss this on Fox News.
It’s funny. I’m doing okay. I’m not a one percenter, but there are few things I’m wanting for. The work I do is reasonably interesting and not the least bit taxing physically. So I feel incredibly fortunate about my lot in life.
The one percenter from the party should be deliriously happy with his financial situation. Instead, he’s angry. He feels cheated. He feels he’s overtaxed. He’s far less focused on the hundreds of thousands of dollars he gets to spend however he pleases each year, an amount that can fulfil every material want and need he and his family could reasonably have, than he is on the amount he feels the government “takes” from him.
Unless something changes, he’ll die a very rich man. And a very angry one.
And it will be all Obama’s fault, if you ask him.