And again those are marginal tax rates. Unfortunately, most people don’t understand the difference between marginal rates, which is how much tax you pay on the last dollar you earn, and what people actually end up paying. The Carter administration didn’t confiscate 70 percent of rich people’s money in income taxes. The effective federal tax rate for the top 1 percent in 1979 was just 22 percent (including all taxes, particularly corporate income tax, the overall effective federal tax rate for the top 1 percent was 37 percent, well above 2007’s 30 percent rate, which is surely lower today.)
Then there’s this stunner:
Despite all of this, the refrain from Treasury Secretary Tim Geithner and most of the Democrats in Congress is our fiscal mess is a result of “tax cuts for the rich.” When? Where? Who? The Tax Foundation recently noted that in 2009 the U.S. collected a higher share of income and payroll taxes (45%) from the richest 10% of tax filers than any other nation, including such socialist welfare states as Sweden (27%), France (28%) and Germany (31%). And this was before the rate hikes that Democrats are now endorsing.
Moore’s logic: Since the U.S. collected a higher share of taxes from the richest 10% than other nations then that means we haven’t cut taxes for the rich. I don’t think I need to explain that one.
A couple of points I will make, though: The rich pay more taxes here because they get much bigger share of the income pie than their counterparts in Sweden, France, or Germany. And here’s a chart that shows how much of the debt comes from the Bush tax cuts of 2001 and 2003, which were extended for a couple of years by Obama late last year:
The folks on the WSJ edit page are no dummies. They know all this stuff. But spreading disinformation is just fine as long as it serves their larger purpose. And sure enough, the zombie lie is starting to spread.
It’s hit the heartland in a post by Milwaukee Journal-Sentinel columnist Patrick McIlheran, who uncritically parrots the bogus 62 percent number and doesn’t understand the concept of marginal tax rates:
Why is it, Stephen Moore asks in the Wall Street Journal, that Democrats think taking away two-thirds of someone’s income is sustainable policy?…
You can ask why it’s just that two-thirds of someone’s income vanishes, but Moore is practical: Will this help government fund itself?
Human Events spreads it. WSJ sister network Fox News does too, turning Moore’s question into a declarative “Dems Want 62% Top Tax Rate,” as does Moneynews.com and dozens of lesser blogs. CNBC and Larry Kudlow lend a hand:
Hey, throw enough stuff against the wall and something’s going to stick.
Reason No. 5,752 why you should never trust The Wall Street Journal’s editorial pages.