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The rich don't control Washington
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Contrary to popular wisdom, the rich don't control Washington. The poor and the middle-class do.
This will surprise most Americans. We've been conditioned to believe that Washington is a den of corruption, overrun by well-paid lobbyists, and lawyers who manipulate government policies to favor the rich and corporate interests. Ordinary Americans don't stand a chance against this juggernaut.
But look at what the government actually does, and a completely different picture emerges.
Ron Haskins, a scholar at the Brookings Institution, recently presented some fascinating figures on government spending. From 1980 to 2011, yearly outlays for the 10 largest programs for the poor went from $126 billion to $626 billion in inflation adjusted dollars.
Then there are the programs aimed primarily at the middle-class. The biggest, of course, are Social Security and Medicare. Put together, all these programs accounted for almost 60 percent of total federal spending in 2011.
Meanwhile, what about the rich and well-to-do? Well, they're paying for almost all of that spending. According to the Congressional Budget Office, the richest fifth of Americans pay nearly 70 percent of all federal taxes.
The point is not that the rich are victims. Their lawyers and lobbyists often do secure beneficial tax breaks, subsidies and regulatory preferences. But focusing mainly on these victories distorts our picture of government.
Our problem is not that the rich have taken over government. Our problem is that politicians, on the left and right, are doling out money to everyone -- particularly the poor and middle-class. That's why our budget deficits are so huge and so intractable.
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Check the XL tax tables on www.irs.gov You'll find that Mr. Samuelson's facts are indeed correct.
I was pleased to see that others noted the same problem with this piece. The confounding of "taxes" and "social security and medicare" was deceitful. I was terribly disappointed that Marketplace did not vet this piece a little more carefully. Yes, it's "opinion" but I that's no excuse to give air time to such ridiculous distortions of the numbers. This kind of "lying with statistics" is why so many people don't understand what's really going. You've had so many excellent pieces on the economy...things that help increase our understanding. Please look for someone more honest (or maybe simply someone intelligent enough to make an honest argument) for your future opinion pieces.
There were no lies here. Check Obama's web site www.irs.gov. The top one percent pay MORE tax revenue than the bottom 95% combined. Their average tax rate is 27%. Nearly 47% of US households pay no (that's zero) federal income tax. The US has a highly progressive tax structure which is another word for wealth redistribution
Interesting responses. If paying the most taxes gives control to the wealthy, then the successful people who support this country do control Washington. If however, the people who take most of the money out of the system and put the least in, gives control, then the middle class and poor control do control the government. And since the majority of the people in the country take out more than they put in, and they control, the vote Mr. Samuelson is right!
Also, since when is Marketplace supposed to speak only for the left wing liberals who will surely cause the USA to beome an extension of western Europe! It is alright to have people of different persuasions express their beliefs on NPR.
Robert Samuelson tried to convince us its the poor and the middle class that controls Washington. He does so by claiming that programs like Social Security and Medicare account for almost 60 percent of total federal spending while the besieged rich pays for almost all of the spending. This is the anti-tax rhetoric that always includes Social Security and Medicare when talking about federal expenditures but ignores who actually pays for these programs.
This middle class person paid 18% last year in federal income taxes last year on an income of $100,000. An average middle-class employee also had 15.3% deducted from his or her pay for Social Security and Medicare if you combine the employee and employer share or if the person is self employed. That's a total of over 33% in federal taxes.
Now let looks at what Mitt Romney paid. He earned $21.7 million in 2010 — virtually all of it profits, dividends or interest from investments. Romney paid about $3 million to the IRS, for an effective tax rate of 13.9 percent. Since none of Romney income came from wages, he probably paid nothing in Social Security or Medicaid taxes.
Don't forget that the investments in which Mr. Romney paid a personal tax rate of 13.9% were already taxed 35% at the corporate level. You see, as a shareholder of a company, you are a fractional owner of that entity. Since corporations are owned by people, when you tax corporations, you tax people. If you add back in Mr. Romney's corporate taxes, you'd see that his tax rates would top out at nearly 45%. The taxes we contribute to the government are not as simple as the checks we write to the IRS on April 15th.
The corporate tax rate may be 35%, however, companies have many ways to avoid paying this rate. (from tax loopholes to tax incentives to accounting rules that create made up expenses like depreciation) ALSO - one thing that is conveniently left out when discussing the high 35% tax rate is the most important fact that companies only pay taxes on their profits - that is - after all of their expenses are deducted. Individual tax payers pay taxes on their gross income while companies pay taxes on their net income. This makes a huge difference and, again, points out the false arguments put out by those in control of the country's resources.
I strongly object to the airing of this kind of drivel on public radio.
"The richest fifth pay nearly 70% of the federal taxes" well duhh, the richest fifth hold 80% of the nations wealth. So, my math says they're not paying their fair share.
It is fact that the rich, are rich in opportunity, in even more stark contrast than those nasty statistics, and getting starker by the day. And it is fact that our politicians, to the one, are bought.
Mr. Samuelson is entitled to his opinion, but I can't excuse APUBLICM for using our airtime to espouse them. I want cred!
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