Much has been made of the top 1% tax-filing units or as they are called the 1 %, but maybe the real issue is the 13% percent of tax-filling units or as I will call them the 13 %. According to the IRS in 2010 there were 143,490,000 tax returns filed by tax-filing units that were not corporations. The 1% is only composed of 1,494,900 tax-filing units with an Adjusted Gross Income (AGI) of 507 K$ or greater. The 13 % is composed of 18,653,700 tax-filing units with an AGI of 137 K$ or greater. Between the 1% and the 13% there are 17,158,800 tax-filing units, which is not an insignificant number.
Who is this in between population? In particular who is in this population that determine what does or does not happen in the United States Government?
Based on just their listed salaries we have the following breakout.
The Executive Branch: The President of the United States (400K$), The Vice President of the United States (230.7 K$), Cabinet Secretaries (191.3 K$), Cabinet Deputy Secretaries (172.2 K$), Cabinet Under Secretaries (158.5 K$), Cabinet Assistant Secretaries (149 K$), Agencies Admistrator/Commissioner (139.6 K$), General/Admiral (0-10) (184.8 K$), Lt General/Vice Admiral (0-9) (161.6 K$), Major General/Rear Admiral (UH) (147.5 K$), and Brigadier General/Rear Admiral (LH) (138.5 K$)
Judicial Branch: Chief Justice Supreme Court (223.5 K$), Associate Justices Supreme Court (213.8 K$), Circuit Justices (184.5 K$), and District Judge ($174 K$).
Legislative Branch: Speaker of the House (223.5 K$), Majority Leader (House/Senate) (193.4 K$), Minority Leader (House/Senate) (193.4 K$), and Member House/Senate (174 K$).
If there ever was a privileged class this has to be it. Their AGI are greater than 86% of all tax-filing units. For them the system is good, hell better than good it is great and for some it is just plain fantastic. What a deal, these tax-filing units earn at least 2600 dollars a week of AGI. Many earn much more.
While 50 % of the tax-filing units earn less than 827 dollars of AGI every week. The in between population have at least 3 times as much AGI every week. But it gets even better; the average member of the House or Senate weekly AGI is at least 4 times greater than the 50 % of tax-filing units. And we wonder why the government is disconnected from the people.
There can be no doubt that the net taxes of the 1 Percent tax-filing units need to be increased. How much the net taxes should be increased is a matter of debate.
The net taxes of the “in between population” (2-13 Percent of tax-filing units) also needs to be increased. Again how much the net taxes should be increased is also a matter of debate.
Notice I said the net taxes, I really do not care at this point how this is accomplished, either by creating additional tax brackets and new rates for those brackets, or by removing features of the existing tax code or by a combination of both, but it really needs to be done.
That said; will it get done? I do not hold much hope out for this in that those who occupy the House and Senate are the one who need to make it happen, and given every one of them is a member in good standing of the 13 %. Human nature being what it is, these individuals are not willing and therefore not able to accomplish this tasks, since it would directly affect their taxes and conversely their standard of living. These individuals have had no major issues in raising someone else taxes, be it someone who makes significantly more or be it someone who makes significantly less. There are many ways to raise the tax that an individual pays without actually change the rate that is applied to the Adjust Gross Income. Most if not all the changes actual deal with how the AGI is calculated, since it is real easy to get individuals upset when there is talk about changing the rate, but it is in many cases much harder to get individual upset when the talk is about the minutia of tax code, this latter is typically the path taken to increase revenue.
Make no mistake that these individuals are not dummies, they are extremely perceptive, manipulative, conniving, and in many cases self-absorbed to the point of being narcissistic. They should not be under estimated for their ability to tell half-truths, and to ignore the evidence is legendary. Finally they do it for a living.
The effective tax curve has been flatten, and even compressed over the past 60 years. The political cry had been that the tax code is too complicated, and too onerous. This was not a lie; it had been complicated and onerous to the 13 %. To those 50 % it was never that complicated or onerous. The 50 % tax-filing units returns have for the most part been simple, manly due to the fact they never did make very much, and what they did make was quickly spent on life basic needs, (Food, Shelter, Health, Transportation) in that they were never in a position to take advantage of the features and nuances that existed in the tax code that Congress had so thoughtful provided.
Remember the words of Balzac, “The secret of great fortunes without apparent cause is a crime forgotten, for it was properly done.” it as true to today as it was when they were penned in 1835.