"Sacrifice" of the Rich No Sacrifice at All

So, horror of horrors, President Obama and congressional Democrats are asking the very extremely wealthiest in this country to sacrifice to help the economy.

But exactly what kind of sacrifice are we talking about? And what kind of "help" will that sacrifice bring?

First, the help: jobs. Every penny of extra tax revenue from the obscenely, parasitically, disgustingly rich will go to create jobs for millions of Americans.

TPM:

"I asked CBO to estimate the size of the deficit if the economy were at full employment, and CBO's response confirms that our weak economy is the major contributing factor, accounting for over one third of the projected deficit for fiscal year 2012," Van Hollen said in a statement last night. "It's clear that the fastest and most effective ways to reduce the short term deficit is to put Americans back to work."

Second, the sacrifice. This one gets a little wonky, but hang in there - it's worth it.

Greg Sargent at the Washington Post:

Ever since Obama redoubled his push to hike taxes on the rich, conservatives have been ridiculing Obama’s invocations of fairness, insisting that the rich are already paying a rising share of the overall tax burden, and accusing him of pushing for mass wealth redistribution in the quest for equality imposed from above. He has been labeled “a staunch believer in the redistributionist state,” a believer in “government-enforced equality,” and even a “socialist.”

So let’s look at how Obama’s tax policies would really impact the wealthy if they were enacted — and how those effects would fit into the bigger picture of income disparity in America.

One way to measure the impact of tax policies is to ask what impact they would have on the after-tax income of people at all income levels. This allows us to gauge just how “redistributionist” tax policies really are.

And guess what: When you do it this way, it shows that the notion that Obama’s tax proposals are redistributive in any large or meaningful way is just comical. Indeed, the big picture is that the impact that they would have on income inequality is virtually nonexistent.

I asked the nonpartisan Tax Policy Center to analyze how Obama’s policies would impact the after tax income of people at all levels, and to compare those results to people’s after tax income under previous tax regimes.

The Tax Policy Center graciously agreed to my request, and looked at what taxes people would pay in 2013 under various tax regimes, when the Obama proposals would take effect. The Center drew up the answers in graph form (editorial conclusions are mine; the numbers are theirs). Here’s the first result:



Here’s how the chart works. In each income group in the top 20 percent — measured here by “percentile” — the blue line represents Clinton-era tax rates; the red represents Bush-era tax rates; and the green represents tax rates under Obama’s first stimulus tax cuts.

The purple and light blue represent what after-tax income would look like for each percentile if Obama’s tax policies were enacted. The blue one includes new taxes from the health reform law that are set to take hold in 2013, and the purple one doesn’t include those taxes. Throughout, I’ll be referring to the one including the health law taxes — the light blue line — because that’s the most onerous scenario.

In other words, under the Tax Policy Center’s model, the purple and blue bars give us a rough sense of the after tax income in various income categories if Obama were to realize his policy goals. The model assumes all the following Obama proposals would get passed: Letting the Bush tax cuts mostly expire for the rich, limiting the value of itemized deductions and some exclusions to 28 percent, taxing carried interest at regular rates, and eliminating tax breaks for oil and gas companies and for corporate jets.

As you can see from the above graph, the big picture is that only the very wealthiest would see anything approaching a signficant change, and in the larger scheme of things, it wouldn’t be a signficant shift at all.

I told you it was wonky.

But it's a real eye-opener, and the wonkiness makes it impossible to refute, so it's well worth your time.

Much as I hate to give WaPo a link, read the whole thing.