Lies, Damn Lies, and Whining Tea Baggers

The tea baggers, in the person of John Boehner mostly, are whining that the rich pay too much tax, and the poor get too much services.  As they always do.  The counter example is always Alaska, home of the Tea Baggers, and blessed with the highest per capita Federal largess.

So I thought I'd lay out a small thought experiment.  The Tea Baggers continue to argue that taxes are too high, ignoring (not out of ignorance) that during their much loved 1950's (when men were men, women stayed at home, and darkies did all the real work for pennies) the highest tax rate was 91% and a Republican ran the White House.  I suppose they've already ousted him from the party.

Let's start with a country of 1,000 people, $1,000,000 of GDP, divided as it was in 1980 (approx. of course) with 1% taking 8% and the remaining 99% getting 92%.  Let's set the 1% rate at 60% and the 99% rate at 30% at the start.

Here's the arithmetic:

.6 x .08 x 1,000,000 =  $48,000
.3 x .92 x 1,000,000 = $276,000
               total = $324,000


Now, fast forward to today, with the same rates, just a shift in distribution with the 1% getting 24% and the 99% getting 76%.

.6 x .24 x 1,000,000 = $144,000
.3 x .76 x 1,000,000 = $228,000
               total = $372,000

The problem, of course, is that Reagan/BushI/BushII cut the 1% rates about in half, so

.3 x .24 x 1,000,000 =  $72,000
.3 x .76 x 1,000,000 = $228,000
               total = $300,000


For some actual numbers, have a look here.  The conclusion, so far as I'm concerned, still holds.  Warren Buffett said that there really is a class war, and that the rich are winning.  Boy Howdy, I'd say.