An Open Letter to the U.S. Congress
Are you aware that the tax cuts have failed to help most of your richer constituents? Yes, I said richer.
An analysis of the tax-cut movement initiated under the Reagan administration and continued by the current administration reveals several startling facts about the richest one-quarter of the population. Between 1976 and 2000:
• The income taxes paid by Americans earning between $50,000 and $500,000 increased by about 3%. It was only the 31% DECREASE in the taxes of the Superrich (those making $1 million-plus) that made it seem like all of the Rich have done well under tax reform. Taxes paid by the $75,000 to $500,000 group increased by almost 4%.
• The $50,000 to $500,000 group paid $14 billion more in taxes than they would have paid under the 1976 rates, while the $1 million-plus group paid $102 billion less.
• In 1976, the Rich had an after-tax income that was twice the national average, while the Superrich had an after-tax income that was 11 times the national average. By 2000, the Rich were still receiving twice the national average, but the Superrich were receiving 59 times the national average.
• The after-tax income of the $50,000 to $500,000 group increased by only 28%, while the after-tax income of the $1 million-plus group increased by 591%.
The above figures get even bleaker for the Rich when the effects of the 2001 and 2003 tax legislation are considered. When the tax cuts are fully implemented, the Superrich will average an additional $175,000 in tax cuts. While the Rich will average $3,200 on paper, most of that money will disappear once the Rich have recalculated their return using the alternative minimum tax. Little of the $175,000 of the Superrich is affected by the AMT because 50% of their income is sheltered through capital gains and dividends, and the balance is already taxed above the AMT threshold.
Few of your colleagues believe that a person supporting a family on $10,000 should pay the same percentage in income tax as one earning $100,000. It is just as foolish to claim that the person earning $100,000 should pay nearly the same percentage as the person earning $1 million or $10 million. Yet, as Congress allows the top marginal tax rate to be reduced, the tax rate on many Rich Americans will continue to rise. There is not anyplace else from which to make up the revenue shortfall. As you know, the 72% of taxpayers earning less than $50,000 have about 6% less after-tax income now than they did in 1976 despite receiving an average 10% tax cut. That group is not a viable source of significant additional revenue.
During September, you are welcome to request a complimentary galley of my latest book Conning the Rich: The Great American Fraud. Simply fax the request on your official stationary to 419-858-2665. The data needed to vet these statistics is available atwww.ConningTheRich.info and www.GetRealOnTaxReform.info
I implore you and your colleagues to turn from this destructive path before our great nation pays the price for this relentless sabotage of the progressive tax system. If not for your constituents, do it for yourself. Imagine what the voters will do to incumbent politicians once they realize what has been allowed to happen.