Tax Rates for Top 400 Earners Fall as Income Soars – The incomes of the top 400 American households soared to a new record high in dollars and as a share of all income in 2007, while the income tax rates they paid fell to a record low, newly disclosed tax data show.
In 2007 the top 400 taxpayers had an average income of $344.8 million, up 31 percent from their average $263.3 million income in 2006, according to figures in a report that the IRS posted to its Web site without announcement that were discovered February 16. (For the report, see Tax Analysts Doc 2010-3372 .)
The figures show that widely published reports in major newspapers asserting that the richest Americans are losing relative ground and “becoming poorer” are not supported by the official income data.
The effective income tax rate of top earners fell to 16.62 percent, down more than half a percentage point from 17.17 percent in 2006, the new data show. That rate is lower than the typical effective income tax rate paid by Americans.
Based on 2007 data, top earners bring in the same amount in three hours as the average American earner receives in an entire year. The top 400’s share of all income grew from 1.31 cents out of every dollar earned by all Americans to 1.59 cents. Since 1992, the bottom 90 percent of Americans have seen their incomes rise by 13 percent in 2009 dollars, compared with an increase of 399 percent for the top 400.
Payroll taxes did not add a significant burden to the top 400, not changing the rounding of rates by even one decimal.
The top 400 reports understate actual top incomes because of deferral rules. For example, managers of offshore hedge funds who deferred their gains may not be counted in the top 400 reports, which are based on the figure on the last line of the front page of Form 1040. At least three hedge fund managers made $3 billion in 2007. It is not known how much, if any, of their income they deferred.
The annual top 400 report was first made public by the Clinton administration, but the George W. Bush administration shut down access to the report. Its release was resumed a year ago when President Obama took office. The Statistics of Income Division at the IRS created the top 400 reports at the urging of Joel Slemrod, a business professor at the University of Michigan.
Contrary to What You Have Been Led to Believe, Federal Spending is Down, Monthly Deficit is Falling – The U.S. government monthly deficit fell by $49.3 billion in January, 2010. The January deficit was $42.6 billion, less than half of the $91.9 billion shortfall reported in December, 2009. It even came in below the $63.5 billion deficit reported in January 2009, the last month that Bush was in office.
“[The deficit reflects] the cost of fighting the financial crisis and recession,” said Gus Faucher, director of macroeconomics for Moody’s Economy.com.
Driving the fiscal 2010 deficit is the fact that tax revenues have fallen faster than government spending. In the first four months of the fiscal year, government receipts fell by $80.5 billion compared to the year before, while outlays only decreased by $45.7 billion from the same period.
Nearly Half of World’s Primate Species Are Now Endangered – Nearly half the world’s primate species are in danger of extinction. The main threat facing primates — including apes, monkeys, and lemurs — is tropical forest destruction, with the illegal wildlife trade and commercial bush meat hunting also playing roles. Of the world’s 634 primate species, 48 percent are threatened with extinction, according to the report, issued by the International Union for Conservation of Nature.
A handful of primate species count populations in the dozens. For example, there are just 60 to 70 Asian monkeys known as Golden Headed Langurs, found only on an island in Vietnam’s Gulf of Tonkin. There are fewer than 100 remaining Northern Sportive Lemurs, which live in Madagascar, and around 110 eastern Black Crested Gibbons, found in northeastern Vietnam.
John McCain Falsely Claims He Has Never Favored Capping Greenhouse Gas Emissions – Last week, Sen. John McCain (R-AZ) — who is facing a primary challenge from former right-wing GOP congressman J.D. Hayworth — played along with Fox News host Sean Hannity’s uninformed idea that the recent snow storms in the mid-Atlantic region disprove that the earth’s climate is changing. “I think they made some movie that showed that the earth was going to freeze over as a result of global warming. I never quite understood that,†McCain said.
Yesterday, a local Arizona conservative talk radio host told McCain that “80 percent†of global warming science “is based on fraud and misinformation.†Despite having previously refuted such nonsense publicly, McCain again remained silent. Pandering to the far right, the Arizona senator later said he “never†supported capping carbon emissions.
In fact, McCain has actually co-sponsored cap-and-trade legislation. “We need a successor to Kyoto, a cap-and-trade system that delivers the necessary environmental impact in an economically responsible manner,†McCain wrote in a 2008 op-ed. And during the his 2008 presidential campaign, he delivered a major speech on his plan to address climate change. “A cap-and-trade policy will send a signal that will be heard and welcomed all across the American economy,†he said in the speech.
Tea Party Speaker Suggests Hanging Elected Official – A tea party gathering in Asotin County, Washington turned more than a bit ugly on Saturday when a featured speaker actually called for the hanging of Sen. Patty Murray (D-Wash), the fourth ranking Democrat in the Senate and a vulnerable re-election candidate.
“How many of you have watched the movie Lonesome Dove?,” asked an unidentified female speaker from the podium. “What happened to Jake when he ran with the wrong crowd? What happened to Jake when he ran with the wrong crowd. He got hung. And that’s what I want to do with Patty Murray.”
Former Bush Speechwriter Lies About Role of FBI and Usefulness of Torture – In his book, former Bush speechwriter Marc Thiessen discounts the role of the FBI in the interrogation of Abu Zubaydah that led to the capture of Khalid Sheikh Mohammed (KSM), arguing that “since the CIA took over interrogations from [FBI agent] Soufan, dozens of senior al Qaeda leaders have been captured, including KSM.”
However, a review of the Inspector General’s report shows that FBI interrogators Soufan and his colleague “Agent Gibson” played vital roles in the interrogation of detainee Abu Zubaydah. And according to the report, their use of “rapport-” and “relationship-building” techniques -not “enhanced interrogation techniques”–is what led Zubaydah to reveal to them the identity of KSM, the self-proclaimed mastermind of the 9/11 attacks.
The IG report also stated:
“”… these [aggressive] techniques were not as effective for developing accurate information as the FBI’s rapport-based approach…if ‘aggressive’ techniques are used long enough, detainees will start saying things they think the interrogator wants to hear just to get them to stop…Second…the use of the aggressive techniques failed to take into account an ‘end game.’ D’Amuro stated that even a military tribunal would require some standard for admissibility of evidence…Third, in addition to being ineffective and short-sighted, using these techniques was wrong and helped al-Qaeda in spreading negative views of the United States” (71-72).â€
Thiessen is now making the news show circuit, trying to convince us that torture is good. Plus, he’s trying to sell his book.
The New Champions of Greed – Wall Streeters were widely considered a shoo-in to take the coveted Corporate Greedhead Trophy this year — but, holy cow, what a comeback bid we’re now seeing from the Giants of Insurance!
Let’s recap their amazing charge: Last week, the news broke that America’s five largest health insurance companies (United Health, Wellpoint, Aetna, Humana and Cigna) had scored record profits in 2009, totaling $12.2 billion. This was a stunning 56 percent hike over the previous year, a drive made all the more impressive by the fact that these gains came from people suffering during the worst economic downturn since the Great Depression.
As American families struggled financially last year, Team Insurance was able to boot 2.7 million more people out of their private health plans, leaving those folks in the corporate dust. In an even slicker, hidden-ball play, three of the five giants cut the proportion of premiums they spent on their customers’ medical care, shifting those premium dollars into corporate salaries, profits and administrative overhead.
By the way, buried in that increase for the insurers’ administrative overhead was a little statistic that often gets overlooked: lobbying expenses. The Big Five spent $16.8 million last year to lobby against comprehensive reform of our health care system.
Republican Leadership Not Too Comfortable About Open Discussions – President Obama issued an executive order on Thursday that formally creates a bipartisan fiscal commission, a first step to forcing painful decisions needed to get the U.S. debt load under control. Raising taxes, cutting spending and reforming Medicare and Social Security are all fair game, and thought to be impossible without the backing of both Republicans and Democrats. “Everything’s on the table. That’s how this thing is going to work,” the president said immediately after signing the order.
It was not clear before the president signed the executive order whether House and Senate Republicans would even choose to participate. A spokesman for House Minority Leader John Boehner, R-Ohio, gave some indication that House Republicans might participate but didn’t say it was confirmed.
After the President signed the order, a spokesman for Senate Minority Leader Mitch McConnell, R-Ky., said that McConnell will name three Senate Republicans to the panel. But his instructions to them will be to focus more on spending cuts than tax increases. (I guess they are not interested in that “everything’s on the table” idea.) (Now, read again the article at the top of today’s Bad Deeds about how tax rates for the rich have dropped. – JLV)
Regards,
Jim
Andy Hailey