Chait Versus Fleischer

Oh, sure, Fleischer makes a few minor clerical errors, like saying rich people are paying a higher share of their income now than they did in 1979, when they're actually paying a much lower share. Excuuuuuse me, Mr. Math Nerd. But Fleischer's overall point remains irrefutable: rich people own the newspapers, and they can print whatever they want in them, so STFU.

There is a lot to make issue of in Fleischer's piece, but Chait's last point misrepresents Fleischer's claims.

Chait - "He cites a study last year by CBO which, he says, shows that since 1979, the "[The top 1 percent] share of the nation's income has risen, but their tax burden has risen even faster."

Rather than citing the relative proportion of taxes paid, he cites the decrease in the relative tax rate. Fleischer's argument is that the top 1% pay MORE OF THE TOTAL TAX, not that they pay a greater % of their income in federal taxes...

Fleischer's argument is that the top 1% pay MORE OF THE TOTAL TAX, not that they pay a greater % of their income in federal taxes...

Ah, but has their share of total taxes paid gone up as fast as their share of total income? Permit me to doubt . . .

Chait is so stupid as to make mr. yglesias look merely retarded and not the brain dead mass of stretch marked flesh he is.

Seems like Chait's beef is mostly with the headline writer, not Fleischer.

DaveInTheCorn, your objection is weird. "Their share of the nation's income has risen, but their tax burden has risen even faster": first, it is absurd to interpret "tax burden" to mean "share of the total tax paid" rather than "share of their income paid". If everyone else in the country stopped paying taxes entirely, while my taxes merely fell from $15,000 to $10, would you say my "tax burden has risen" because I'm now paying 100% of the country's entire taxes?

Second, it is possible to have a situation in which a. the income share of the top 1% of wage earners rises, but b. their share of overall taxes paid rises even faster, while c. the actual percentage of their incomes paid as tax falls dramatically. But there's only one way this can happen: if almost ALL of the country's rise in incomes goes to that top 1% of wage earners, while the other 99% don't make any more money at all. That is, let's say you have a function like federal tax revenues which takes about 20% of the total of GDP. Then let's say GDP grows by 10% from 2000 to 2004, but everyone's income stays the same except for the top 1% of wage earners, who take that whole 10% increase. So their share of GDP has risen by about 9% of total GDP (10/110). Now let's say just 25% of that new income goes to taxes. That will amount to about 2.5% of the year 2000 GDP, so their share of federal revenues will have increased by 2.5/20 = about 12.5% of the total. So, indeed, their income went up; their share of total tax revenues went up faster (12.5% of total vs. 9% of total); but their overall tax rates went down.

But for this to be true, nobody else's incomes can have gone up much; if they did, they would be paying more taxes too, so the share of overall tax paid of the top 1% would not have risen so much. In other words, Fleischer's argument is essentially an indicator of extremely unequal gains in income, with the top 1% taking almost all the new income generated by economic growth. For them to then COMPLAIN about this fact...let's put it this way: if they gave all their poorest employees 10% raises, their share of total national tax paid -- their tax "burden", as Fleischer defines it -- would immediately go down. Problem solved, right?

I wonder if I'd be a happier person if I were as easily amused as the 12:12 commenter seems to be.

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