Missing a golden opportunity to correct a specious presumption of Barack Obama and his liberal supporters that the wealthy are under-taxed, CBS reporter Chip Reid on Monday night highlighted how “ending the Bush tax cuts for people making more than $250,000 a year and using the money for a tax cut for the middle class” is one of Obama's highest priorities and one supported by “Warren Buffett, the richest man in the world who, despite his billions, says the rich are not taxed enough.” Reid, who later in his story asserted “critics wonder how” McCain could possibly balance the budget “given his support for extending all of the Bush tax cuts,” failed to inform viewers of how the wealthy increasingly pay far more than their fair share of income taxes.
The Tax Foundation reported on July 18 that new 2006 IRS tax data revealed “both the income share earned by the top 1 percent of tax returns,” those earning $388,806 or more, “and the tax share paid by that top 1 percent have once again reached all-time highs.” Gerald Prante pointed out those top 1 percent “paid about the same amount of federal individual income taxes as the bottom 95 percent of tax returns.” The top 5 percent, those making $153,542 or more, earned 36 percent of all the reported income, but they paid just over 60 percent of the total income taxes collected.
An excerpt from the Tax Foundation's “Summary of Latest Federal Individual Income Tax Data,” by Gerald Prante posted on July 18:
The latest release of Internal Revenue Service data on individual income taxes comes from calendar year 2006, a year in which the economy remained healthy and continued to grow, increasing individual income tax collections along with overall average effective tax rates.
This year's numbers show that both the income share earned by the top 1 percent of tax returns and the tax share paid by that top 1 percent have once again reached all-time highs. In 2006, the top 1 percent of tax returns paid 39.9 percent of all federal individual income taxes and earned 22.1 percent of adjusted gross income, both of which are significantly higher than 2004 when the top 1 percent earned 19 percent of adjusted gross income (AGI) and paid 36.9 percent of federal individual income taxes....
From other IRS data, we can see that in 2006, 92.7 million of the tax returns came from people who paid taxes into the Treasury. That leaves 43 million tax returns filed by people with positive AGI who used exemptions, deductions and tax credits to completely wipe out their federal income tax liability. Not only did they get back every dollar that the federal government withheld from their paychecks during 2005, but some even received more back from the IRS....
The top-earning 25 percent of taxpayers (AGI over $64,702) earned 68.2 percent of the nation's income, but they paid more than four out of every five dollars collected by the federal income tax (86.3 percent). The top 1 percent of taxpayers (AGI over $388,806) earned approximately 22.1 percent of the nation's income (as defined by AGI), yet paid 39.9 percent of all federal income taxes. That means the top 1 percent of tax returns paid about the same amount of federal individual income taxes as the bottom 95 percent of tax returns....
The first half of Reid's story, about the economic policies of the presidential candidates, from the Monday, July 28 CBS Evening News:
CHIP REID: In Washington today Barack Obama huddled with his economic team, people who've served Presidents from Carter to Clinton, even George W. Bush.
BARACK OBAMA: We have to change course and we're going to have to take some immediate action.
REID: One of his first priorities: Ending the Bush tax cuts for people making more than $250,000 a year and using the money for a tax cut for the middle class, a position with broad support in this room and on the phone.
OBAMA: Warren, are you on?
WARREN BUFFET, AUDIO: I'm here. I'm here.
REID: "Warren" is Warren Buffett, the richest man in the world who, despite his billions, says the rich are not taxed enough. But Obama has also called for more spending on everything from universal health care to a new economic stimulus package, and with the deficit now soaring, even these great minds may have trouble finding the money. John McCain has also surrounded himself with some of the best minds in business, including Carly Fiorina, former CEO of Hewlett Packard and Meg Whitman, former head of E-Bay. Today they briefed reporters on the importance of cutting taxes on business to create jobs. Lying
FIORINA, AUDIO: Small business is the engine of growth in this economy.
REID: McCain says he'll balance the budget by the end of his first term, but critics wonder how that's possible given his support for extending all of the Bush tax cuts....