How much do Americans really pay in taxes?

I try to get input from both the right and the left on issues, and I am grateful to have Ezra Klein of the Washington Post as a source of liberal viewpoints.  I have found that he is a very effective spokesman for his side, and I really appreciate that he stays away from ad hominem attacks and demonization of the right.  His points are always reasonable, i.e. based upon reasons, rather than being emotional appeals to his liberal tribe.

He presents a really interesting fact about taxes - how much do the different strata of society pay in taxes?  Actually, all strata pay substantial taxes.  Here is the chart:



The bottom fifth income group pay a total of about 17% in total taxes, and the top fifth income group pay about 30% of total taxes.  

So, the idea that some conservatives have that they are being taken advantage of by freeloaders (the beliefs of Ayn Rand, Paul Ryan, and the donors that Romney was appealing to in Boca Raton) is just nonsense. The lower strata don't pay as much Federal Income Tax, but they pay state and local taxes.  The less income they have, the lower the percentage of federal taxes they play and the greater the percentage of state and local taxes they pay.  

Here is that chart:




I think this is an example of the damage that Rush Limbaugh and conservative radio has had on the Republican Party.  I know that years ago, Limbaugh had a statement on his website that half of Americans didn't pay taxes.  I don't remember if he distinguished that he was only talking about Federal Income Taxes.  I just looked at his website and couldn't find that graphic today.  But I think that became a rallying cry for conservatives who felt taken advantage of by the Takers who were seen as exploiting the Producers.

But, a little analysis, and the picture changes dramatically. Is it really some kind of injustice that the lower fifth income group pays 17% while the upper fifth has to pay 30%?  Don't the lower fifth have their hands full with food, shelter, and a hope for an education for their children without the upper fifth trying to figure out ways to raise taxes on them?

I think the Democrats are winning this one, by a pretty wide margin.

The 47% Moocher Nation?

After the Republican Primary, I wrote on 9/1 that the Republicans see the country as divided between those who want the country to be an Opportunity Society (Republicans) vs those who want the country to be an Entitlement Society (Democrats).

After the Democratic Primary, I wrote on 9/5 that the Democrats see the country as divided between those who think You Are On Your Own (Republicans) vs those who think We Are All In It Together (Democrats).

Mitt Romney has just made that distinction between the parties amazingly explicit.  He was quoted verbatim at a fund-raiser as saying:

"There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax....Romney went on: "[M]y job is is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives."

This is a precise, even if overly candid, expression of the libertarian, Paul Ryan, Ayn Rand view of America - the takers vs the producers.

Liberals will say a lot about how the 47% who "don't pay taxes" actually pay a lot of taxes - not income tax, but rather pay social security taxes, sales taxes, property taxes, capital gains taxes, there are probably more...

Conservatives are probably in two camps:  those who are glad to get their main issue on the table, and those who are appalled that a candidate would actually say something that they all believe.  

So, to me, this is a really positive development in the campaign.  We finally are no longer dealing with symbolic campaigns on both sides.  We now have the basic philosophical differences of the two parties clearly expressed, at least by Romney.  

The country really has a clear choice of two competing philosophies, clearly stated.  

Will the voters agree with Romney and the Republicans that this is a choice between an Opportunity Society vs an Entitlement Society, or will they agree with Obama and the Democrats that this is a choice between a country where You are On Your Own vs a country where We Are All In It Together?

Let's stay out of the internal Islamic wars

The current wave of violence spreading across the Middle East is disturbing, of course, especially since in includes the murder of our Ambassador in Libya.  But what is going on?

I am always grateful to be able to read the thoughts of David Ignatius on these issues.  He seems to me to be someone with real connections to our intelligence community and the forces in the region as well. His approach is always filled with understanding and insight.

It looks to me like this is about the violent fights for power amongst the various factions in the Middle Eastern countries, i.e. their internal wars for power.  As usual, demonstrations in the streets are very anti-American, but underneath it are struggles for power over the countries themselves.  

In other words, this is between them, and the U.S. is just being caught in the crossfire.  

In Egypt and in Libya, the less violent and less Islamist extremist parties won political power through the political processes.  The more violent Islamist extremists are not happy and seem to be looking to seize power in the more traditional Middle Eastern ways - by revolution and force.

Ignatius says that in Egypt it is 

"...a challenge by the Salafists to their rivals in the Muslim Brotherhood government of President Mohamed Morsi."  

And in Libya it is a 

"...challenge to Prime Minister Abdurrahim el-Keib and the secularist parties that are the backbone of the new Libyan government."

How extreme are some of the elements?  According to Ignatius:

"Also worrisome is the link between Salafists (whose posters disturbingly appear in Cairo neighborhoods near Heliopolis populated by members of the military) and the more violently "takfiri" wing, which believes it's permissible to kill apostate Muslims, and has links with al-Qaeda. The takfiris hate the ruling Muslim Brotherhoood, if that's any consolation."

That being said, it seems to me that Romney's inserting himself into a very difficult diplomatic situation upon the death of our ambassador seems remarkably foolish to me.  For a man whose reputation is to be one who gathers all the facts and makes thoughtful choices, his remarks seem impulsive and inflammatory.  I guess the facts that he gathered are about his losing the campaign, and his choice is to inflame his party's base.  Unfortunately it also inflames the Islamist extremists.

It seems to me that a person who will say anything in order to get elected is demonstrating his untrustworthiness.  If he will say anything, who knows what he will do?

This election is supposed to be about the economy according to the Republicans, and about the cultural issues according to the Democrats.  But how the two men, and two parties, react to the world may end up being the most revealing of all, and could decide the election.  

To me, Romney, the Republicans, and especially the hard right wing have lost this one.

A good summary is given by Ignatius in his article:

"Let's return to the main trigger for these events: It's the success of the tolerably non-extremist (I won't say "moderate") governments in Egypt and Libya in consolidating power, and the anger of the more radical Salafists at this success. "

Let's stay out of the civil wars in the Middle East.  No more American blood should be spilled in those lands, as far as I am concerned.

The introvert in chief

One of the most fascinating things about President Obama is that he is an introvert rather than an extrovert.  The main criticisms of Obama, especially from Democrats, is that he is not like Clinton or LBJ, i.e. he is not a people person.  He is not good at reaching out, persuading, twisting arms, making alliances, gathering people and resources around him, giving and getting favors that he can use to promote policy agendas.  In short, he is not a normal politician.  

I can understand that, because I am much the same way.  I am a salesman who is not a normal salesman.  I am not really a people person.  I am not an extrovert.  But I am a good salesman even though I am not the way many salesmen are.  So, I am happy enough with the job that Obama is doing, even though he is an introvert rather than an extrovert.  Who says you have to be an extrovert to be a president?  I think there are many leaders who are basically introverted.  I think introverted people are more likely to be more thoughtful, cautious, calculating, strategic, evaluating people.  And I think they can be very effective indeed.

Gay conservative, Andrew Sullivan, makes the same observation.  Indeed, he says one of the reasons he likes Obama is because he is also an introvert who  has good communication skills and can identify with him because of that.  Me too.

What was it that Obama said? Or Romney?

I guess it is no surprise that President Obama’s speech last night wasn’t as good as  Bill Clinton’s the night before, but I think I was surprised by how far it fell short.

After Clinton spoke, I thought that the election might be over.  He laid out the case for Obama and the Democratic Party in remarkably clear, immediate, and visceral language.  He handed the election to Obama on a platter. 

And the president said… what did he say again?  I really don’t much remember.  I think the faithful were excited because they are excited anyhow and love the president and are afraid of the Republicans.  But…

The president’s speech seemed to be mostly platitudes, generalities, a kind of collection of presidential ad-moments jammed into one speech.  There was a mention of citizenship, and his job is really tough, and it’s going to take a long time, and we can all make a better future, but…

What is his plan?  What is he going to do?  Where is he going?  Other than he really likes government, and loves his family, and cares about our future.  I was not moved.  I was not persuaded.  As opposed to being both moved and persuaded by Clinton the night before.

So, now it’s on to the debates.  But after watching the meaningless focus-grouped, poll tested platitudes that each candidate spewed out in their acceptance speeches, I am not very hopeful that I’ll see much in the way of substance in the debates either.  It’s like both candidates seem to think that all they have to say is “I’m not that guy.”

Where’s the beef?  

We're all in it together vs You're on your own

It is no surprise that Bill Clinton gave a great speech at the Democratic convention, but I think he surpassed my expectation.

Probably a lot to think about what he said, but the two things that stand out to me is his basic definition of the differences in the two parties from the liberal point of view - We're all in it together according to the Democrats vs You're on your own according to the Republicans. This is certainly the world view of the Dems.

The other thing that's staying with me was his summary of the Republican argument - Republicans say that we gave Obama a Huge mess, he didn't fix it fast enough, so give it back to us. Pretty good argument against giving it back to them. 

Watching Clinton give that speech made me wonder if he ever would have lost an election if he had not been term limited out. Hard to tell which of the two were more talented politically, Clinton or Reagan. Each could really sell his case. 

The opportunity society vs the entitlement society

Because of circumstances, I never had a chance to watch the Republican convention while it was happening. But I saw some of the speeches last night and this morning. I think it was a a fairly successful convention for Romney and the Republicans.  I think it accomplished a couple of important goals for them.  

They did a lot to show that Romney is not the caricature of a rapacious, ruthless plutocrat that Obama and the Democrats had been portraying him over the last few moths with their attack ads and editorials.  They gave a fairly convincing story that he is a hard working, committed, successful businessman, family man, and religious man. 

Plus, I think that the Republicans were able to lay claim to the stance that they are the party that is focussed on personal and business success, and that they are interested is a creating opportunity for people to succeed, and they see the essence of America as successful people looking for opportunities. I believe they see themselves as the keepers of the flame of the opportunity society, and feel that their opponents are the keepers of the flame of the entitlement society.

Romney promises change, but I appreciated his closing pledge, not to offer the grandiose promises of Obama to halt the rise if the oceans, but rather to help people and their families. His message is one of a pragmatic hard working problem solver focused on the economy, rather than an historically transformational figure.

His is the message of competency rather than the message of inspiration. 

I think the Republicans got their messages across competently. 

Checking on Realclearpolitics.com, Romney's pre-convention standing was 1.0 percent behind, and this morning, Romney's post-convention standing is 0.3 percent behind.  So, looking at the Real Clear Politics average poll numbers, he gained only 0.7 percent.  The post convention numbers could be a little out of date, however, as some of the polls may not have post-convention data yet. But, Romney needed about a four percent bounce, I thought, since that is about the average bounce from a convention.

It could just be that not that many people watched, or at least not that many who weren't already on the Republican bandwagon.  This election may be one where just about everyone has made up their mind, and there aren't that many folks left to compete over.

So, a job pretty well done, but perhaps not good enough. We'll see what Obama and the Democrats come up with.