Tuesday, August 28, 2012

More Americans Believe Rich Should Pay More Taxes

[Abridged version with commentary to follow]

Most Americans say rich should pay more taxes, according to new survey

(AP) WASHINGTON - As the income gap between rich and poor widens, a majority of Americans say the growing divide is bad for the country and believe that wealthy people are paying too little in taxes, according to a new survey. [snip: The poll was released Monday by the Pew Research Center.  The Pew survey involved telephone interviews with 2,508 adults conducted from July 16 to 26. It has a margin of error of 2.8 percentage points.
The poll found that many Americans believe rich people to be intelligent and hardworking but also greedy and less honest than the average American. Nearly six in 10, or 58 percent, say the rich don't pay enough in taxes, while 26 percent believe the rich pay their fair share and 8 percent say they pay too much.
Even among those who describe themselves as "upper class" or "upper middle class," more than half -- or 52 percent -- said upper-income Americans don't pay enough in taxes; only 10 percent said they paid too much. This upper tier was more likely to say they are more financially secure now than 10 years ago -- 62 percent, compared to 44 percent for those who identified themselves as middle class and 29 percent for the lower class. They are less likely to report problems in paying rent or mortgage, losing a job, paying for medical care or other bills and cutting back on household expenses. [snip]
The results reinforce a tide of recent economic data showing a widening economic divide. America's middle class has been shrinking in the stagnant economy and poverty is now approaching 1960s highs, while wealth concentrates at the top. A separate Pew survey earlier this year found that tensions between the rich and poor were increasing and at their most intense level in nearly a quarter-century. [snip]
According to Pew's latest findings, about 63 percent of Americans say the GOP favors the rich over the middle class and poor, and 71 percent say Romney's election would be good for wealthy people. A smaller share, 20 percent, says the same about the Democratic Party. More Americans -- 60 percent -- say if Obama is re-elected his policies will benefit the poor, while half say they'll help the middle class and 37 percent say they'll boost the wealthy.
"The Great Recession was not an equal opportunity disemployer," said Sheldon Danziger, a public policy professor at the University of Michigan who describes the gap between rich and poor as the widest in decades. "College graduates, whites and middle-aged workers had fewer and shorter layoffs than high school graduates, blacks, Hispanics and younger workers. And, only a small percentage of the rich work in the hardest-hit industries, like construction and manufacturing."
About 65 percent of Americans say the gap between rich and poor has gotten wider in the past decade, while 20 percent believe it has stayed the same and 7 percent say the gap has gotten smaller. Separately, 57 percent say a widening income gap is a bad thing for society; just 3 percent say it is a good thing.
Asked to estimate how much a family of four would need to earn to be considered wealthy in their area, the median amount given by survey respondents was $150,000. For middle class, the median amount was $70,000. [snip]
DATA DRIVEN VIEWPOINT: This survey reinforces other recent data suggesting a consensus that income and wealth inequality is a growing problem and that the rich are not paying their fair share of taxes.  The unabridged article makes a point that the wealthy already pay a greater share of the tax burden as a result of the progressive tax code.  For a number of generations the progressive tax code was considered fair based on the principle that for those to whom much is given, much is expected.  There was once a clear understanding that the success of  wealthy American's was built on the social, governmental, educational and physical infrastructure of the nation.  Support for that idea has eroded over the past 40 years, as has both the progressive tax code and hourly wages.  (see A 99 Year History of the Progressive Tax Code, and  A Fair Wage for A Days Work.)  It is interesting to note in this PEW survey that the perception of the income needed to be considered middle-class, $70,000, is nearly $30,000 more than the median income.  An analysis of where the median income would be if hourly wages continued to keep pace with increases in hourly productivity over the past 40 years showed that median income would be over $100,000 today.  When American wages remain flat, as they have since the 1980's, there is also no raise in federal income tax revenues.  Think for a moment how much more federal tax revenue there would be if the median household income was $100, 000 in stead of $52,000.  At the same time the progressive tax structure has nearly collapsed resulting in an enormous loss of federal tax revenues.  The third and final assault on federal tax revenues is the huge increase over the last 40 years in corporate welfare and federal aid to the working poor who cannot live self-sufficiently on present day wages.  

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