Thursday night’s debate triggered an incessant nattering about Obama’s use of the phrase “spread the wealth.” I find it interesting how Republicans distort the phrase and how conveniently they overlook the fact that when tax breaks are given to the wealthiest in this country by Republicans, they are, themselves, spreading the wealth.
The problem is that the spreading on the part of the Republicans is to the top of the food chain – to the 10% who already own 71% of the wealth in this country. On the other hand, the bottom 40% own less than 1% of the nation’s wealth. A Congressional Budget Office report found families earning more than $1 million a year saw their federal tax rates drop more sharply than any group in the country as a result of President Bush’s tax cuts.
Home of Paul Allen – Co-founder of Microsoft
Photo Credit: Forbes
The study, by the nonpartisan Congressional Budget Office, also shows that tax rates for middle-income earners edged up in 2004, the most recent year for which data was available, while rates for people at the very top continued to decline.
Based on an exhaustive analysis of tax records and census data, the study reinforced the sense that, while Mr. Bush’s tax cuts reduced rates for people at every income level, they offered the biggest benefits by far to people at the very top — especially the top 1 percent of income earners.
Economists and tax analysts have long known that the biggest dollar value of Mr. Bush’s tax cuts goes to people at the very top income levels. One reason is that two of his signature measures, tax cuts on investment income and a steady reduction of estate taxes, overwhelmingly benefit the wealthiest households.
The Tax Policy Center reports that the long-term effect of the 2001-2006 tax cuts on the distribution of income – note that the Center calls the tax cuts “distribution” – will depend on how they are paid for, but their immediate effect has been skewed in favor of those with high incomes.
In 2006, for example, the tax cuts were equivalent to 2.5 percent of after-tax income for the middle quintile of the income distribution compared with 4.1 percent of income for those in the top quintile. Households in the bottom quintile received a benefit of 0.3 percent of income.
For taxpayers in the top one percent, the benefits are scheduled to increase even more as additional cuts — primarily to the estate tax — phase in between now and 2010. Compared to pre-EGTRRA law, taxpayers in the top one percent will enjoy a 5.4 percent increase in after-tax income in 2006 and a 6.7 percent increase in 2010.
So, let’s get this straight – Republicans spread the wealth. The only difference is the hypocrisy of what Republicans call the spread of wealth. When Republicans spread the wealth through tax cuts and other measures that benefit the top 5% of the wealthy, they cleverly call it capitalism; when Democrats do the same thing to benefit the middle and lower classes, Republicans jump on their soap boxes and call it socialism.
Now let’s take a guess at which word will strike more fear into the heart of Americans? Nowhere to run – nowhere to hide. Republicans continue to use fear tactics.
Remember this clip where George Bush comments about his “elite” base?
Too bad many Americans are so afraid of the word socialism that they are ready to believe the lies told by John McCain and his crowd. Socialism spreads wealth, and so does capitalism. And, frankly, I am tired of the middle class getting the end of the knife that is doing the spreading.