Letter: Taxes excite debate; but how to narrow the gap?
Discussion of income tax tends to excite emotions about as fast as any political debate but it is the political season and both sides will give it a spin. Seldom do we heart details or comparisons that we can apply to our own unique situations. The truth is marginal income tax rates have remained fairly stable or dropped over the last decade 28% to 15% for a median income family filing jointly in Gloucester while the median income has risen about 20% (IRS and citydata.com). The trend is similar for all brackets and you actually have to go back to the late ’80s to find higher brackets. Did our combined income go up or some deduction/credit dry up? For most yes, these number assume simple apples to apples comparisons which vary but overall apply. The IRS also claims to collect 99% of the income tax and only 70% of business and investment income. We have all heard people tell us that a small percent of people paid the majority of taxes which is very true. The IRS says the top 10 percent of earners pay about 65% of the taxes. Push that number up to the top 50 percent and the number approaches 97%. This by itself may sound very unfair to the top of our economic food chain but not when put in perspective. A New York Times article suggest that the 300,000 top income earners (no corporations) earn as much as the bottom 150,000,000 earners. Sounds crazy, right? 1.5% of tax filers earned more than 75% of all filers! Not when you look at triple-digit raises many approaching 400% coupled with tax cuts over the decade for the top earners and much flatter numbers for bottom earners.
Income taxes are a hot button but the 800-pound gorilla in the room is the rapidly growing gap between lower earners I call consumers and those at the top whose consumption cannot power an economy. These numbers are very similar to the Great Depression. Rather than cutting or raising taxes we should discuss how do we narrow the gap?
S. J. Mehaffey