The Washington Post website has an interesting article from Greg Sargent on after-tax income for the highest-income Americans under various tax structures, including those in effect under for most of the terms of Presidents Clinton, George W. Bush, and Obama, together with tax rates proposed by President Obama. The numbers he cites are provided by the non-partisan Tax Policy Center and are adjusted for inflation.
In brief, for all except the top one percent, the difference in after-tax income under the different tax rates is almost impossible to see on the graph, and even for the top one percent, after-tax income under Obama’s proposals would be only a modest amount less than under George W. Bush (and vastly higher than even the next 4 percent take home). So much for the notion that we’re talking about “class warfare” or punishing the well-off.
More specifically, the top 1 percent would see their average after-tax income fall from $1,240,975 under the Bush tax rates to $1,143,598 under Obama’s proposals. For the next-highest-income 4%, average after-tax income would fall from $255,379 under Bush to $251,045 under Obama — which is actually a more than the the booming 1990s, the longest period of economic expansion in U.S. history, under Clinton.
The top 20% overall would likewise have higher average take-home under Obama’s plan than under Clinton (and only a little more than under Bush), and of course after tax income would be tremendously skewed to the rich under all the tax policies.
As Sargent notes, the Tax Policy Center’s figures show that the top 1 percent would pay an average rate 5.7 percentage points higher than under Bush.
But the significance of those hikes shrivel dramatically when you consider how much better these folks have fared over time than everyone else has. The highest end hikes shrivel in the context of the towering size of their after-tax incomes — and the degree to which they dwarf those of everyone else, something that has increased dramatically in recent years.
Indeed, if Obama’s proposal is intended as a huge redistributionist scheme designed to level our society by bringing about government-imposed equality, then it can already been seen as a pretty massive failure.