The Magic Calculator
David Brooks has a new calculator where he adds state and local taxes to income taxes and comes up with a super duper number to show the burden on the henpecked rich:
BROOKS: You know, they made some progress on the Hill, they got a House bill out, they got a Senate bill moving forward. They’re scaring the dickens out of the moderates in their own party, let alone the Republicans. They’re scaring the dickens out of them because the House bill calls for raising the top tax rate to 52 or in some cities, 57%. That’s higher than in France, Spain, Italy…
Magically, Brooks neglects that other little line item on the tax form - the part with all the deductions. In many states, you can deduct your federal taxes on your state taxes. And then there's the deductions for mortgage interest, and charity, and every phone call you have with someone in your business, and every dinner, and all of the other hundreds if not thousands of deductions and credits and givebacks available to those in the top tax rate, not to mention tax shelters and numbered Swiss bank accounts and the like.
There's only one tax rate that matters, and that's the effective tax rate, measuring the amount of money individuals actually pay to the federal government. The effective tax rate for the top 1% was down to 31.2% in 2006, down measurably from the previous year and at an almost historical low.
Now, maybe some of those Democrats in wealthy districts could get out their calculators and explain this to their constituents, but I think they all have David Brooks' calculator model.