INVESTOR'S BUSINESS DAILY
Fiscal Policy: House Speaker Nancy Pelosi is contemplating new taxes. But even with a booming economy, thanks to President Bush's tax cuts, Americans are still taxed plenty — especially investors and entrepreneurs.
'We're not going to start with repealing the (Bush) tax cuts," Pelosi remarked last month. "But they certainly are not off the table for people making over half a million dollars a year."
Barely two weeks into the new Congress, Pelosi already was backing a bill to raise taxes on domestic oil and gas production (when we should be lessening our reliance on foreign energy), and Democratic leaders have discussed raising Social Security taxes.
Despite the president's tax cuts,
Each year, the Tax Foundation measures all taxation at the federal, state and local level as a percentage of income. By the end of the
Since 2004, however, it's rising again, standing now at 31.6%. Federal taxes are responsible for two-thirds of that tax burden. There are multiple explanations.
For instance, after the president heavily cut taxes on all income groups, the complex alternative minimum tax has kicked in for many more taxpayers. In addition, property taxes in states have risen as a percentage of income in recent years, after a steady decline in the decade of the 1990s.
As a percentage of gross domestic product, corporate income taxes rose from 1.2% in 2003 to 2.3% in 2005, the highest level in 25 years.
Those who earn the most money — and invest the most in the economy — pay almost all federal personal income taxes.
As reported by Congress' Joint Economic Committee, the richer half of the American population pays almost 97% of income taxes. And most of that — 54% — is paid by those in the top 5%. Those ranked in the top 1% — the richest of the rich — pay more than 34% of all personal income taxes collected by Uncle Sam.
What's more, the Congressional Budget Office last month found that the after-tax income of those "superrich" actually declined after the Bush tax cuts — by 8.3% from 2000 to 2004.
Hand in hand with these trends, about 14 million Americans at lower incomes have been removed from the federal income tax rolls since 2000 because of the earned income tax credit and the per-child tax credit.
"John Edwards actually got it right," Tax Foundation President Scott Hodge told IBD. "There are two
With an already rising tax burden — borne disproportionately by those who are successful, and who invest — the Democrats' plans for big tax increases could be more damaging to the