Drudge Retort: The Other Side of the News
Wednesday, October 09, 2019

In 2018, for the first time in history, America's richest billionaires paid a lower effective tax rate than the working class.

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And people wonder why the government is running such a deficit....

There are citizens who are taxed too much... but they don't happen to be billionaires.

#1 | Posted by tonyroma at 2019-10-09 01:19 AM | Reply | Newsworthy 8

The analysis differs from many other published estimates of tax burdens by encompassing the totality of taxes Americans pay: not just federal income taxes but also corporate taxes, as well as taxes paid at the state and local levels. It also includes the burden of about $250 billion of what Saez and Zucman call "indirect taxes," such as licenses for motor vehicles and businesses.

It finds that in 2018 the average effective tax rate paid by the richest 400 families in the country was 23 percent, a full percentage point lower than the 24.2 percent rate paid by the bottom half of American households.

In 1980, by contrast, the 400 richest had an effective tax rate of 47 percent. In 1960, their tax rate was as high as 56 percent. The effective tax rate paid by the bottom 50 percent, by contrast, has changed little over time.

The focus on the ultrarich is necessary, Saez and Zucman write, because those households control a disproportionate share of national wealth: The top 400 families have more wealth than the bottom 60 percent of households, while the top 0.1 percent own as much as the bottom 80 percent.

Remember this article and its attendant charts the next time someone wants to argue that poorer people do not pay their fair share in taxes.

And never let the argument revolve around federal income tax because that alone does not begin to tell the story, as these numbers attest.

#2 | Posted by tonyroma at 2019-10-09 01:29 AM | Reply

Good to finally see a reasonable article on this topic. I've read too many articles saying, ~billionaires are paying less taxes than you and me...~ which were so wrong on their premise.

This article seems to put things into the proper perspective.

(wow, Total Coelo just popped up on the playlist. Talk about a blast from the past...)

#3 | Posted by LampLighter at 2019-10-09 01:40 AM | Reply

"Thanks to Trump I can write off my corporate jet."

- Jethro the MAGAt

#4 | Posted by Nixon at 2019-10-09 07:26 AM | Reply

"This [GOP tax scam] is going to cost me a fortune this thing, believe me, believe me. This is not good for me, me it's not so good for."

- Conjob Don.

#5 | Posted by Nixon at 2019-10-09 07:28 AM | Reply

Republicans serve the 1% = The Plutocrats

Democrats serve the 10% = The Professional Class

and this is why America gets richer yet half the country remains poor, along with why 80% of all working Americans cannot afford a $400 emergency expense.

low taxes for douchebag billionaires is just one part of this Oligarchy.

#6 | Posted by PinchALoaf at 2019-10-09 08:19 AM | Reply

"Democrats serve the 10% = The Professional Class"

Yeah, that's why we passed Obamacare. Good grief you are such a hack.

#7 | Posted by danni at 2019-10-09 08:27 AM | Reply | Newsworthy 2

Yeah, that's why we passed Obamacare. Good grief you are such a hack.

#7 | POSTED BY DANNI

Obamacare was better than nothing, which is what we had before 2011 -- nothing.

But you shouldn't forget the the ACA is a Republican healthcare plan that the Republicans disavowed the second President Blackenstein embraced it.

Obama had the tools to enact universal healthcare or at least a public option, but he DIDN'T want to. Why? Because Obama serves the professional class (Big Pharma) and never served ordinary Americans like you or me.

Remember Thomas Frank? You need to listen to him as a reminder to you what the Democrats USED to stand for.

#8 | Posted by PinchALoaf at 2019-10-09 08:36 AM | Reply

Loaf,

If Obama had dictatorial powers he would have imposed single payer.

With a bicameral congress plus presidential veto passing massive sweeping bills is extremely difficult and that's by design.

#9 | Posted by JeffJ at 2019-10-09 08:48 AM | Reply

Obamacare was better than nothing, which is what we had before 2011 -- nothing.

Obama had the tools to enact universal healthcare or at least a public option, but he DIDN'T want to. Why?

The votes weren't there, that's why. Obama ran on a healthcare plan that was more progressive than Hillary's but political reality changed the calculus. As we've witnessed, the passage of the ACA by the skin of their teeth cost the Democrats the House majority for 8 years as it was.

Universal healthcare was off the table in 2010 because the votes weren't there to pass it. The ACA was a giant step forward and was never intended to be the end of the healthcare fight.

You've honestly identified the major impediment to better government and it is indeed the current need for all our elected representatives to prostitute themselves to those who have the money to fund their ever-increasingly expensive campaigns. No one can get elected without support from those who have disposable wealth to donate under our current political finance laws.

Until campaign finance is changed it's rather naive to expect beggars to stop begging when their political success and survival depends upon it, unless they're wealthy enough to self fund, and that can be another problem in and of itself - the dominance of elected government by the wealthy, unconnected by experience to the common citizen.

#10 | Posted by tonyroma at 2019-10-09 08:54 AM | Reply

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Jeff and I agree on something.

Head for the shelters folks, Armageddon is HERE!

#11 | Posted by tonyroma at 2019-10-09 08:56 AM | Reply

#11 It's pretty scary.

What Obama wanted, really what any POTUS wants and what is politically feasible are rarely the same.

See: Overton Window

Fact is, ACA was barely dragged across the finish line and a TON of political capital was expended in doing so.

It's no secret that I'm a huge critic of ACA but I also recognize that it was a tremendous political achievement.

#12 | Posted by JeffJ at 2019-10-09 09:01 AM | Reply | Newsworthy 1

#10 | POSTED BYTONYROMA

Obama had a Democrat super majority in the Senate for a few months and even when that went away Dems still had a majorities in both houses in Congress and could've rammed a very progressive healthcare plan thru via reconciliation -- but he chose not to.

When Obama announced his healthcare initiative he almost immediately took the public option off the table.

Obama had the votes, but chose to do a Republican healthcare plan.

I happily voted for Obama twice, but those are the facts.

#13 | Posted by PinchALoaf at 2019-10-09 10:22 AM | Reply

Loaf,

The public option got taken off the table because of Joe Lieberman. He was opposed and that meant a filibuster was going to kill it.

Again, see: Overton Window

#14 | Posted by JeffJ at 2019-10-09 10:28 AM | Reply

Loaf,

The public option got taken off the table because of Joe Lieberman. He was opposed and that meant a filibuster was going to kill it.

Again, see: Overton Window

#14 | POSTED BYJEFFJ

Reconciliation is reconciliation, you only need 51 votes.

If there was some BS rule change that would've held things up, then Obama could've brought to bear THE CONSIDERABLE POWER of the presidency, aka the bully pulpit, to bring douchebag Lieberman in line ...

But Obama chose not to do any of that.

#15 | Posted by PinchALoaf at 2019-10-09 12:01 PM | Reply

Reconciliation is reconciliation, you only need 51 votes.

Reconciliation is limited to budget issues. The Senate parliamentarian would have crushed any attempt to try and pass something as sweeping and broad as ACA via reconciliation.

#16 | Posted by JeffJ at 2019-10-09 12:31 PM | Reply

If there was some BS rule change that would've held things up, then Obama could've brought to bear THE CONSIDERABLE POWER of the presidency, aka the bully pulpit, to bring douchebag Lieberman in line ...

At that time whilst Lieberman caucused with Democrats he was actually an independent. He lost a primary, ran as an Independent and won. There was no party pressure to bear down on him as he wasn't a Dem party member.

Again, keep in mind, ACA barely squeaked through as it was. The House had to pass the Senate bill exactly as it was written. They couldn't pass their own bill and have the 2 competing bills go to conference and be cleaned up. The fact that the Senate bill was basically a rough draft created problems down the road when it came to implementing ACA. Had it not been for some rank judicial activism, Burwell would have mostly destroyed ACA. That provision likely gets scrubbed out in conference. But, they had no choice once Scott Brown won the special election.

#17 | Posted by JeffJ at 2019-10-09 12:36 PM | Reply

And people wonder why the government is running such a deficit....

Spending spending spending..

There are citizens who are taxed too much... but they don't happen to be billionaires.

Class warfare ... it will never be enough.

I say good for us, they invest their money, create jobs people need, not make work rent seeking.

#18 | Posted by AndreaMackris at 2019-10-09 12:38 PM | Reply | Funny: 1

Class warfare ... it will never be enough.

I say good for us, they invest their money, create jobs people need

Except you can't provide a single statistic proving so. In fact the truth is quite the opposite:

The tipping point came in 2017, with the passage of the Tax Cuts and Jobs Act... championed by President Trump and then-House Speaker Paul D. Ryan, was a windfall for the wealthy: It lowered the top income tax bracket and slashed the corporate tax rate.

By 2018, according to Saez and Zucman, the rich were already enjoying the fruits of that legislation: The average effective tax rate paid by the top 0.1 percent of households dropped by 2.5 percentage points. The benefits the bill's supporters promised " higher rates of growth and business investment and a shrinking deficit " have largely failed to materialize.

The passage of the TCJA was class warfare, not reporting on the fact that it was.

#19 | Posted by tonyroma at 2019-10-09 05:01 PM | Reply | Newsworthy 1

Spending spending spending..
Class warfare ... it will never be enough.
I say good for us, they invest their money, create jobs people need, not make work rent seeking.

#18 | POSTED BY ANDREAMACKRIS

The level of sheer stupidity in this post is not surprising from you.

Like most Boomer Republicans, you're just a walking pile of entitlement.

I honestly don't have enough crayons to explain it to you.

#20 | Posted by Sycophant at 2019-10-09 05:44 PM | Reply

"I say good for us, they invest their money, create jobs people need, not make work rent seeking.
#18 | POSTED BY ANDREAMACKRIS"

Lol. You think parking their money in tax shelters in the Cayman Islands and Switzerland is "investing." It is for them, but not for you sucka!

#21 | Posted by mOntecOre at 2019-10-09 06:52 PM | Reply

Clowns are proud of this and to celebrate are going to shake down some more poor people because they lack the balls to go after the one's stealing from them.

#22 | Posted by RightisTrite at 2019-10-10 02:59 AM | Reply

If billionaires and their corporations are taxed too highly, they move overseas. Americans bitch about this. They bitch about them not paying enough taxes

Americans need to make up their minds: Do they want to drive corporations and billionaires overseas? Or do they want them to stay here and pay lower taxes.

It can't be both.

#23 | Posted by goatman at 2019-10-10 05:54 AM | Reply

"If billionaires and their corporations are taxed too highly, they move overseas. Americans bitch about this. They bitch about them not paying enough taxes"

They can move offshore, right after they pay their income taxes which need to be over 50%.

#24 | Posted by danni at 2019-10-10 07:51 AM | Reply

Americans need to make up their minds: Do they want to drive corporations and billionaires overseas? Or do they want them to stay here and pay lower taxes.
It can't be both.

#23 | POSTED BY GOATMAN AT 2019-10-10 05:54 AM | FLAG:

Sorry, you are not representing the true choices. FAIL.

#25 | Posted by BruceBanner at 2019-10-10 03:04 PM | Reply | Newsworthy 2

They can move offshore, right after they pay their income taxes which need to be over 50%.
#24 | POSTED BY DANNI

They're only going to pass whatever taxes they pay onto consumers like you.

#26 | Posted by Ray at 2019-10-10 03:10 PM | Reply

"Sorry, you are not representing the true choices. FAIL.

POSTED BY BRUCEBANNER "

It's one thing to mindlessly puke out "FAIL". It's another to justify your position.

So tell us what the "true choices" are?

#27 | Posted by goatman at 2019-10-10 03:15 PM | Reply | Funny: 1

"Do they want to drive corporations and billionaires overseas? Or do they want them to stay here and pay lower taxes"

so much for that "Love of Country" stuff we keep hearing about

#28 | Posted by ChiefTutMoses at 2019-10-10 03:28 PM | Reply | Newsworthy 1

They can move offshore, right after they pay their income taxes which need to be over 50%.
#24 | POSTED BY DANNI
They're only going to pass whatever taxes they pay onto consumers like you.
#26 | POSTED BY RAY

You understand we are talking about People not Companies here, right?

You owe America an apology for every time you've voted.

#29 | Posted by Sycophant at 2019-10-10 03:36 PM | Reply

I don't think some of you get it.

First, if you're poor and you pay FICA, it's always going to be a higher percentage of total income. And I think we can all agree that if the programs FICA funds were eliminated, the tax rate borne by the bottom 50% would be insignificant...just like their contribution to federal funding writ large.

If you read the article, the authors created the conditions necessary to create a desired outcome. I'm not going to buy the book, but they include indirect taxes, such as fees required to register a vehicle. Fees that are technically voluntary. You may as well go after the fact that a rich person pays a lower percentage of income on a cable bill than a poorer person.

Dumb article from authors with an agenda.

#30 | Posted by madbomber at 2019-10-10 03:42 PM | Reply

"You understand we are talking about People not Companies here, right?"

The authors, somehow, included corporate taxes as part of their position. Which to me implies that they were paid by businesses. Unless individuals pay corporate tax as well. If they do, I'm sure Danforth will be along momentarily to correct me.

#31 | Posted by madbomber at 2019-10-10 03:43 PM | Reply

If billionaires and their corporations are taxed too highly, they move overseas.

#24 | POSTED BY DANNI AT 2019-10-10 07:51 AM | REPLY |

taxes are an afterthought in the reasons companies move overseas. We only tax profits, not revenue. A company making 8% profit margin is doing good. The maximum corporate tax rate is 21% if they have nothing to deduct. 21% of 8% is only 2%. That means eliminating taxes can only benefit a company around 2% of their revenue. Eliminating corporate taxes wont bring any jobs back. No company will gain enough by not paying taxes to cover the wage increases for coming back to America. Example Apple pays Chinese workers $3.15/hr. Prevailing wage for that type of work in America is in the $15-20$ per hour range. The current labor cost to produce 1 iphone is about $5, about 0.5% of the sale price. If they make it here the labor cost will be about $35, about 3.5% of the sale price. If you eliminate corporate taxes they still lose about $10/iphone. Apple sold 217 million iphones in 2018. making them in China saved them over $6.5 Billion. Without taxes making them in China still saves them over $2 billion. We haven't even looked at all of their other products or the savings due to lax environmental regulations.

#32 | Posted by hatter5183 at 2019-10-10 05:10 PM | Reply | Newsworthy 2

Americans need to make up their minds: Do they want to drive corporations and billionaires overseas? Or do they want them to stay here and pay lower taxes.

Weird, how is it that Japan, Australia, Germany, Canada, New Zealand, Netherlands, Spain, Italy, Denmark, Norway, Sweden (most of which have a higher standard of living than the United States) manage to stay afloat economically while charging a higher corporate tax rate than the United States does? Surely all of their corporations should have moved by now?

#33 | Posted by JOE at 2019-10-10 05:23 PM | Reply | Newsworthy 1

32

I agree. Taxes are a red herring and political hot button used so often that it's impossible to believe our tax environment is such an obstacle to remain here.

Smart companies minimize their tax liability regardless of the brackets as do smart wealthy people who minimize their estate tax liability regardless of the brackets.

We live in a global marketplace for labor now.

#34 | Posted by eberly at 2019-10-10 05:26 PM | Reply

33

exactly.

#35 | Posted by eberly at 2019-10-10 05:27 PM | Reply

"#33 | POSTED BY JOE AT 2019-10-10 05:23 PM"

I don't know how one defines something as subjective as standard of living, but your list does not fully agree with the one I will link to below. Also, I've been to all those places except New Zealand. I didn't notice any difference in standard of living. Indeed, the list (again, below) shows their "quality of life" life indices comparable to the US.

As far as the tax rates: Until 2017, the US had the second highest in the world. (40%) So no surprise businesses were leaving the US for overseas. Since Trump's tax cuts, the US is just below global average and some businesses are starting to trickle back because of it. So yes, in spite of what you say, it does seem like taxes are a big factor in US businesses moving overseas.

Quality of living index

www.numbeo.com

Corporate tax rates by country

www.investopedia.com

#36 | Posted by goatman at 2019-10-10 05:36 PM | Reply

"We live in a global marketplace for labor now."

The marketplace may be global, but the laborers are certainly not.
We, as laborers, are stuck within our national labor markets.
Capital faces no such constraint.
Which is why the rich keep getting richer, and most everybody else is just treading water.
You can spend your capital in countries, but you can't get paid to labor there.
It's the double standard which makes globalism a highly profitable race to the bottom.

#37 | Posted by snoofy at 2019-10-10 06:12 PM | Reply

That's it. Time for everybody to start paying their fair share. One! And only one tax bracket. Want more money? Work more, harder or smarter.

#38 | Posted by bogey1355 at 2019-10-10 07:35 PM | Reply

Corporate tax rates by country
www.investopedia.com

#36 | POSTED BY GOATMAN AT 2019-10-10 05:36 PM | REPLY | FLAG:

Useless and you know it. Effective tax rate is what they really pay.

#39 | Posted by BruceBanner at 2019-10-10 10:01 PM | Reply | Newsworthy 1

"Useless and you know it. Effective tax rate is what they really pay.

#39 | POSTED BY BRUCEBANNER "

OK you rebutted me. Good. (some people just puke out "stupid") But you still need to justify your case, because effective tax rates may all be the same.

#40 | Posted by goatman at 2019-10-10 10:04 PM | Reply

OK you rebutted me. Good. (some people just puke out "stupid") But you still need to justify your case, because effective tax rates may all be the same.

#40 | POSTED BYGOATMAN

Circular-Troll-Post-Alert

#41 | Posted by PinchALoaf at 2019-10-10 10:45 PM | Reply

"Circular-Troll-Post-Alert
#41 | POSTED BY PINCHALOAF "

Obsessed.

#42 | Posted by goatman at 2019-10-10 10:46 PM | Reply

"Circular-Troll-Post-Alert
#41 | POSTED BY PINCHALOAF "

Sixth thread my stalker has followed me to this evening.

#43 | Posted by goatman at 2019-10-10 10:47 PM | Reply

You're trolling BruceBanner with a circular BS, Troll.

#44 | Posted by PinchALoaf at 2019-10-10 11:01 PM | Reply

"You're trolling BruceBanner with a circular BS, Troll.

#44 | POSTED BY PINCHALOAF "

Obsessed

#45 | Posted by goatman at 2019-10-10 11:02 PM | Reply

We, as laborers, are stuck within our national labor markets.

But what you're not stuck with is a static value. Unlike land or capital, labor has the ability to adapt to changing market conditions, which as a factor of production allows it to function in a manner which provides an optimal output for the laborer.

"It's the double standard which makes globalism a highly profitable race to the bottom."

Then why are skilled employees doing so well in this environment. I'm pretty sure that the owner of a company would prefer to pay all employees as little as possible...not just the unskilled ones.

In 1998 I made $250 ($393, 2019$) for a 40 hour work week helping a guy install cabinets. Today, I make more than ten times that amount per week (2019$).

I don't feel like I'm in a race to the bottom.

#46 | Posted by madbomber at 2019-10-11 02:45 AM | Reply

"I don't feel like I'm in a race to the bottom."

Your feelings are not relevant. Yet they're all that matter. We're screwed.

#47 | Posted by BruceBanner at 2019-10-11 09:25 AM | Reply

From the article:

A person who paid $1,000 in federal income taxes and then received a $1,500 credit would have a total federal tax burden of -$500, but Furman said that under Saez and Zucman's analysis, that person would instead show a burden of $0. That result would make total tax burdens at the lower end of the income spectrum appear higher than they are.

#48 | Posted by Idependant97 at 2019-10-11 09:51 AM | Reply | Newsworthy 1

#48 at that level the person is so poor, we're just allowing them to feed themselves with their own salary...

#49 | Posted by BruceBanner at 2019-10-11 10:32 AM | Reply

I've been to all those places except New Zealand. I didn't notice any difference in standard of living.

Well, that settles it then.

Indeed, the list (again, below) shows their "quality of life" life indices comparable to the US.

7 of the 11 countries i named are ahead of the US on your own list.

But even assuming they all have "comparable" quality of life to the United States (your words) - how do they manage to do so while charging more in corporate income taxes (and in most cases a lot more in personal income taxes). Why haven't all their billionaires and corporations left yet?

#50 | Posted by JOE at 2019-10-11 10:46 AM | Reply | Funny: 1

Joe,

You should be aware by now - I don't give FF's as an insult.

#51 | Posted by JeffJ at 2019-10-11 10:49 AM | Reply

BTW, 7 out of 11 is "most" which is what my original post said, so thank you for finding the source to back me up. :)

#52 | Posted by JOE at 2019-10-11 10:50 AM | Reply

"But even assuming they all have "comparable" quality of life to the United States (your words) - how do they manage to do so while charging more in corporate income taxes..."

They didn't until Trump's tax cuts in 2017. The US had the second highest corporate tax rate in the world. (40%) Now they are about median. I would imagine it takes a while for the corporations to move back. And even so, they are probably watching to political scene to see if these tax cuts stuck.

The company I used to work for, Transocean, was based out of Houston. They moved to Switzerland (of course there is no offshore oil drilling anywhere close to there) and maintain an office of about ten people, simply for tax purposes. Operations, HR, all that are still in Houston.

I know that's anecdotal, but if one corporation does it to save money, I think it's safe to assume a lot more do too.

www.deepwater.com

#53 | Posted by goatman at 2019-10-11 10:53 AM | Reply

They moved to Switzerland (of course there is no offshore oil drilling anywhere close to there) and maintain an office of about ten people, simply for tax purposes.

Sounds like something we should make illegal. Thanks for the intel; i'll forward it to my Congresspeople.

#54 | Posted by JOE at 2019-10-11 10:58 AM | Reply

"Sounds like something we should make illegal. Thanks for the intel; i'll forward it to my Congresspeople.

#54 | POSTED BY JOE AT 2019-10-11 10:58 AM "

You think he/she doesn't know this happens? LOL

You must have a really stupid congressperson.

#55 | Posted by goatman at 2019-10-11 11:01 AM | Reply

I do. It's Gwen Moore.

#56 | Posted by JOE at 2019-10-11 11:36 AM | Reply | Funny: 1

#12 | POSTED BY JEFFJ AT 2019-10-09 09:01 AM | FLAG: If obamacare had stuck to it's original [phony] claim of insuring those uninsured and not screwed with everyone else's plan it would have been a big win. Unfortunately, even after implemented there were still millions who were uninsured, because after all, in reality it was another 'power grab' for the dems.

#57 | Posted by MSgt at 2019-10-11 11:59 AM | Reply

#56 Then by all means tell her of this evil practice of corporate America. But I wouldn't sign the letter "Esq". It's more likely she would seek to get the bar standards in California raised.

#58 | Posted by goatman at 2019-10-11 12:07 PM | Reply

Obamacare was better than nothing, which is what we had before 2011 -- nothing.

Who is this "we"?

I had a healthcare plan before 2011, even when I wasnt in the military, through my employer. I have one now, even though I'm with the VA, one I pay for through my current employer.

#48 at that level the person is so poor, we're just allowing them to feed themselves with their own salary...

Again, WTF is this "we"? If that person is in that financial shape, that has nothing to do with me.

#59 | Posted by boaz at 2019-10-11 12:32 PM | Reply

#48

I was just pointing out that there are a lot of people who pay negative tax rates and it seems that the article does not take that into account.

For what it is worth.

#60 | Posted by Idependant97 at 2019-10-11 01:31 PM | Reply

#60

Taken into account, it would diminish the emotional appeal that the authors were looking for. If they were being honest, they would point out that the top 1% pays 40% of the federal income tax burden. So if you like flying on airplanes or driving on roads, or collect any sort of public benefit, please give them a shout out.

#61 | Posted by madbomber at 2019-10-11 01:44 PM | Reply

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