How the rich have shifted the tax burden to the middle class
IPS Tax Day Report: Reversing the Great Tax Shift
Institute for Policy Studies
http://www.ips-dc.org/
Download the report: http://www.ips-dc.org/reports/#1207
REPORT DOCUMENTS SHIFT FROM THE RICH TO REST OF US:
IDENTIFIES $450 BILLION IN HIKES TO FUND RECOVERY
Washington, D.C. – America’s highest-income taxpayers,
analysts at the Institute for Policy Studies detail in
a new Tax Day report, pay a staggeringly smaller share
of their incomes in taxes than America’s rich did back
in the 1950s.
“Since 1955,” notes John Cavanagh, director of the
Institute for Policy Studies, “we’ve seen a tax shift
of truly epic proportions. Now more than ever, the
ultra-rich need to contribute their fair share to help
our economy get back on track.”
America’s top 400 taxpayers in 1955 paid three times
more of their income in taxes, the new Institute for
Policy studies report points out, than the top 400 of
2006, the most recent year with IRS data available.
If the most affluent 400 of 2006 had paid as much of
their incomes in taxes as the top 400 in 1955, the
federal treasury would have collected an additional
$35.9 billion more in revenue in 2006 just from these
400 ultra-rich individuals.
The report found that the 139,000 U.S. taxpayers who
made over $2 million in 2006 averaged $5.9 million in
income. If these individuals had paid taxes at the same
rate as their 1955 counterparts, the federal treasury
would have collected, in 2006, an additional $202
billion.
The report, “Reversing the Great Tax Shift: Seven Steps
to Finance Our Recovery” offers proposals that would
raise $450 billion of revenue to support economic
recovery. These include:
* Introducing a modest financial transaction tax that
will chill speculation and generate $100 billion a
year. * Implementing an estate tax reform that taxes
inheritances over $2 million at progressive rates. *
Setting an emergency tax rate on extremely high incomes
that would generate over $60 billion a year. *
Eliminating the tax preference on capital gains and
dividend income, generating $80 billion. * Closing
overseas tax havens for individuals and corporations,
generating $100 billion. * Scrapping $18 billion in tax
breaks that subsidize excessive CEO compensation.
“By seriously taxing the top, as we did in the 1950s,
we could raise the revenues we need to better invest in
infrastructure, education, and retrofitting our energy
system,” says Chuck Collins, an IPS senior scholar and
co-author of the new IPS brief. “Appropriately
targeted, higher taxes on the top would also serve to
dampen the speculative frenzy that has cratered our
economy.”
John Cavanagh is the Director of the Institute for
Policy Studies, and the author, with Robin Broad, of
Development Redefined: How the Market Met its Match. He
attended the Fiscal Summit at the White House on Monday
Feb. 23. jcavanagh@igc.org; 202-297-4823 (m)
Chuck Collins is an Institute for Policy Studies senior
scholar and director of its Program on Inequality and
the Common Good. He is co-author, with Bill Gates Sr.,
of Wealth and Our Commonwealth: Why America Should Tax
Accumulated Fortunes (Beacon Press, 2003).
chuckcollins7@mac.com; 617-308-4433 (m)
Sam Pizzigati, an IPS associate fellow, edits Too Much,
on online weekly on excess and inequality. He is author
of Greed and Good: Understanding and Overcoming the
Inequality That Limits Our Lives (Apex Press, 2005).
editor@toomuchonline.org ; 301-933-2710 (o)
About IPS
The Institute for Policy Studies, a progressive multi-
issue think tank founded in 1963, has published 15
widely publicized annual reports on executive pay and
economic inequality. The latest, “Executive Excess
2008″, found that five tax loopholes that benefit top
executives cost taxpayers more than $20 billion per
year.
Other Tax Day Reports: Institute for America’s Future,
“Taxes Tilting Wrong” United for a Fair Economy: “Safe,
Fair & Sustainable: Do President Obama’s Tax Proposals
Measure Up?” Center on Budget and Policy Priorities,
Rebuttal to Inaccurate “Tax Freedom Day”
For commentary, analysis and data about extreme
inequality, visit www.extremeinequality.org To learn
more about the Program on Inequality and the Common
Good, visit the Institute for Policy Studies at
www.ips-dc.org/inequality