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New IRS Tax Numbers: "Rich" Pay Highest Share in 40 Years

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RUSH: The latest IRS data have arrived on who paid what share of income taxes in 2006. We mentioned this last week, but it's going to be hard for the rich to pay any more in tax than they already do. Let me go through the numbers for you. Wall Street Journal has an op-ed today on their website. "The top 1% of taxpayers, that's defined by people who earn $388,000," almost $389,000; $388,806 is the number. If you earned that or above, you're in the top 1%. "In 2006, you paid 40% of all income taxes, the highest share in 40 years. The top 10% in income, that's income above $108,904, paid 71% of all income taxes. Barack Obama says he's going to cut taxes for those at the bottom. But that's going to be a challenge, because Americans with an income below the median paid a record low of 2.9% of all income taxes, while the top 50% paid 97.1% of all taxes."

Now, we're told the rich paid more taxes because they made a greater share of the money. That's true. "The top 1% earned 22% of all reported income, but they also paid a share of taxes not far from double their share of income." In other words, the tax code's already steeply progressive. Yes, even at 35, 36%. And what this proves is the old adage that when you lower taxes, you get increased revenue. Listen to these numbers. "In 1990, the richest 1% were 14% of the nation's income. They paid 25% of all taxes. In 2000, they paid 37%. In 2005, they paid 39%; and 2006, 40%." So since 1990, the rich, top 1%, richest 1% have paid from 25% in 1990 to 40% in 2006 of all income taxes. The richest 5% in 1990 paid 44%. In 2000, they paid 56%; in 2005, paid 60%. The top 10% now pay 71%. But the big number is the top 50% are paying 97.1% of all taxes.

"It proves the way to soak the rich is with lower tax rates, and the IRS data from last week provide more powerful validation of that proposition. But, nevertheless, the Democrats and Obama continue to say that these tax cuts have been a giveaway to the rich and it's a figment of their imagination. Taxes paid by millionaire households more than doubled to $274 billion in 2006, from $136 billion in 2003." What happened in 2003? We rolled back the Clinton tax increases! "No president has ever plied more money from the rich than George W. Bush did with his 2003 tax cuts. These tax payments from the rich explain the very rapid reduction in the budget deficit to 1.9% of GDP in 2006 when it was 3.5% in 2003."

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