Tuesday, September 27, 2011

Quote of the Day: Barack Obama on Billionaires and Janitors

If asking a billionaire to pay the same tax rate as a ... janitor makes me a warrior for the working class, I wear that with a badge of honor. I have no problem with that.

~ Barack Obama



Grouch: Last week we looked at the average tax rates by income levels according to IRS data collected in 2009 (see Omaha Hokum: IRS Data Contradicts Premise for the Buffett Rule). If we assume the average janitor makes $75K (which probably means they work for the Feds, the state or a municipality, but not the private sector), then on average they pay 11.3% of their income in federal taxes. My question on the President's statement above is does he mean that billionaires should have their average tax rate reduced from approximately 26.3% to 11.3%, or does he mean that janitors should have their taxes raised from 11.3% to 26.3%? Everyone knows the government is starved for revenue to keep up with spending, but there is much more revenue to be gotten from one choice than the other.

4 comments:

  1. Yup, It does not compute. I've been on both ends of the spectrum and these days I can say that our household tax bill easily pays someone's salary.

    I'm completely okay with paying taxes, I really am, but I don't like when people say that I'm somehow not doing enough. In addition to taxes, I also pay about $16K/year into daycare and most of it is not tax deductible, yet here I am "creating jobs."

    My mom has been poverty level for as long as I can remember. She's never taken any of the public assistance that she qualified for with the exception of collecting unemployment. She could probably get heating assistance but we can afford to help her, so we do. Would it be better that I got taxed more so that the government could help more people like my mom? I'd rather skip the middle man and do my part directly. If more of us took care of our own, it'd be a nicer place. Same goes for charitable contributions. I'd like to have some say in how my money is spent. If you're curious, the bulk of the money goes to elder services but my time goes to school/kid/learning activities.

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  2. You've probably noticed I like to have fun with politicians who try to pass off silly things on the gullible that aren't backed up by the facts.

    I pay more than most people make in taxes every year. My income level is not with the millionaires or billionaires, but my effective tax rate is at the top of their scale. What irks me is not paying taxes, but what those taxes are used for. I can't say I've ever lived in poverty, but I've had many relatives who have and survived without government assistance. I think most charities get more benefit out of the dollars they are given than government, and have a better feel for the truly needy in their areas, and they are less likely to waste the money.

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  3. If only they were able/willing to cut spending meaningfully, I think more people would have a sense of shared sacrifice rather than the feeling of being robbed. There is something wrong when 50% of households pay no income tax.

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  4. Shawn,

    My position has always been that "shared sacrifice" needs to start with the government taking some serious budget cuts, not just the usual gimmickry. I call that leading by example. Only after that happens should we talk about tax increases, and I think everyone that earns a wage above the poverty level should contribute something. I would also like to see a tax code that encourages wealth creation for all, rather than punishing the successful.

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