Today, in a Washington Times op-ed, Bill O’Reilly complains that if President Bush’s tax cuts “on those making $250,000 or more” are repealed, “me and other rich folks” — who as “part of the 1 percent of Americans that paid an astounding 40 percent of all federal income tax in 2006″ — would have to finance “folks who dropped out of school, who are too lazy to hold a job, who smoke reefers 24/7“:
That means people who drink gin all day will get some of my hard-earned money. Folks who dropped out of school, who are too lazy to hold a job, who smoke reefers 24/7 all will get some goodies in the mail from UncleBarack and Aunt Nancy, funded by me and other rich folks.
O’Reilly’s characterization of the 99% of Americans who earn less than $250,000 a year notwithstanding, his argument that the richest Americans are overburdened by taxation is demonstratively false. According to Internal Revenue Service data, “the share of income reported by the very wealthy has risen faster than the group’s share of income taxes.”
In fact, “the average tax rate of the wealthiest 1% fell to its lowest level in at least 18 years,” allowing the wealthiest 1% of Americans to garner “the highest share of the nation’s adjusted gross income for two decades, and possibly the highest since 1929.” The “average tax rate in 2006 for the top 1%, based on adjusted gross income, was 22.8%,” down from “28.9% in 1996, and…24% in 1988″:
After calling the “present” Social Security “setup” — in which “we are paying present-day retirees with the [payroll] taxes paid by young workers in America today” — “an absolute disgrace,” Sen. John McCain (R-AZ) reversed his pledge to not raise payroll taxes and suggested that he might preserve the “present setup” by increasing payroll taxes:
STEPHANOPOULOS: So, that means payroll tax increases are on the table, as well?
MCCAIN: There is nothing that’s off the table. I have my positions, and I’ll articulate them. But nothing’s off the table.
I don’t want tax increases. Of course I’d like to have young Americans have some of their money put into an account with their name on it. But that doesn’t mean that anything is off the table…
McCain’s reversal “drew a sharp rebuke Monday from conservatives” and has led the McCain campaign to backtrack from the senator’s promise that “everything is on the table.” During an appearance on the Fox News Channel today, Tucker Bounds, McCain’s national spokesperson, said that raising the payroll tax is “absolutely out of the question”:
KELLY: You’re off point. We’re talking on a go-forward basis. McCain gets in the White House, is he going to raise the payroll tax? Might the Social Security tax go up? Is that on the table?
BOUNDS: No Megyn there is no imaginable circumstance where John McCain would raise payroll taxes. It’s absolutely out of the question.
Watch a compilation:
In fact, McCain has gone back and forth on increasing the payroll tax:
– In 2005 on Meet the Press, McCain said, “As part of a compromise I could” support lifting on the cap on Social Security taxes to apply them to incomes above $90,000. [MSNBC, 2/20/2005]
- During an interview with the National Review, McCain promised to not raise payroll taxes under any circumstances. [National Review, 3/5/2007]
- In 2007 on Fox News Sunday, McCain denied his earlier comments and said, “I want to right now tell you I will not support a tax increase. I don’t see how it would be — it’s off the table, certainly, now.” [FNC, 4/30/2007]
- In 2007, McCain said, “I am against tax increases. I am against increases in taxes. I think there are ways to fix Social Security without that.” [SFSSS, 6/2007]
According to the Social Security and Medicare Board of Trustees, the longrange, 75-year actuarial deficit is equal to 1.95 percent of taxable payroll. Eliminating the cap on both the employer and employee side would be more than enough to bring the system into long-range balance. Removing the cap on the employer side would thus go a long ways toward restoring solvency as well as help ensure greater progressivity and fairness in the payroll tax.