The Real Stats On The "Lucky Duckies"

by Randolph T. Holhut

But it's not a joke. A few weeks ago, the Journal actually came out in favor of raising taxes on low-income Americans. In the paper's view, someone that earns $12,000 a year "pays a little less than 4 percent of income in taxes;" so little that it is not "enough to get his or her blood boiling with rage."

Never mind that the 4 percent figure that the Journal threw out is false, because that is only reflects the federal income tax. If you add in what that low income worker pays in Social Security and Medicare payroll taxes, as well as in state and local taxes, the real percentage is closer to about 20 percent.

No, the Journal believes the working poor are taxed too little and these folks "can hardly be expected to care about tax relief for everybody else," such as the clientele that reads the Journal.

Sounds absurd, doesn't it? Not to the Bush administration. They're actively considering raising taxes on the working poor, while cutting taxes even more for the wealthy. Their latest scheme is a proposal to cut taxes on corporate dividends in half -- something that would cost the Treasury more than $100 billion over the next 10 years and would overwhelmingly benefit the rich.

These, and other tax cuts, are being proposed in the name of economic stimulus. Meanwhile, proposals that would provide real economic benefits for working Americans are being ignored. But seeing working Americans getting screwed at the expense of the rich isn't exactly news.

When you here people talk about the need to give more tax relief to the rich, remember these facts:

• 80 percent of Americans earn less than $50,000 a year.
• 60 percent of Americans don't own any stocks or bonds.
• Just 10 percent of Americans own 80 percent of all the stocks and assorted securities.
• More than 60 percent of American households owe money on their credit cards - an average debt of about $7,000, and often much more.
• Over the past 30 years, real wages for most working Americans have decreased. About 25 percent of the jobs in today's economy pay under the federal poverty line. Of the few new jobs are being created in this stagnant economy, more than half pay less than $20,000 a year.

Compare this life with that of the real lucky duckies, the less than 1 percent of the U.S. population that owns 40 percent of the total wealth. According to the Internal Revenue Service, the average annual income of the top 400 richest individual taxpayers rose from $50 million in 1995 to $110 million in 1998 (the latest figures available) -- an increase of 117 percent. But those top 400 saw their average tax rate decline from 30 percent to 22 percent during that period. You can expect that figure to go down further with the reduction of the top tax rate from 39.6 percent to 35 percent by 2006. Those top 400 taxpayers will see an average tax cut of $1 million a year, thanks to President Bush.

Today, the gap between rich and poor is as great as it was during the era of the Robber Barons -- the so-called Gilded Age of the late 19th century. It was this age of excess and greed that prompted the creation of the federal income tax in 1913.

Unfortunately, excess and greed are back and is worse than ever. The corporate scandals of the past year bring a new meaning to the contemptuous response of rail magnate William H. Vanderbilt in 1883 when he was asked by a reporter whether he was working for the public or his shareholders. "The public be damned!" roared Vanderbilt.

And damned we still are. In this new Gilded Age, the official public policy is to shower more and more wealth on the folks who already have too much, while bleeding the average person dry. This is not sustainable, and the Bush administration find this out soon enough.