interesting point i found in my research that i believe should be mentioned in the blog for everyone to read:
the attached visuals show
1. the historical top marginal tax rate for the highest earners
2. the historical public opinion regarding whether respondents believe that their taxes are too high
the government has, since 1940, consistently collected about 10-15% of the GDP from taxable income.
when the top marginal rate rises, respondents across the board respond that their taxes are too high. when the top marginal rate is lowered, as it has been in recent decades, less people respond that their taxes are too high.
a decrease in the top marginal rate means that the consistent 10-15% of GDP collected has to be made up somewhere. logic tells me that people of lower classes are inevitably taxed more when the top marginal rate is lowered. likewise, when the top marginal rate is made higher, people of lower classes are taxed less.
the public is confused about how they are taxed. the media play an important role by spinning coverage of how the top marginal rate affects all americans. taking a page from sociology, CLASS AWARENESS also plays a role. the term class awareness concludes that people will over-estimate their economic status compared to the rest of the population.
the media and the public's inability to measure its own class are what makes people respond that their taxes are too high when the top marginal rate is high. same phenomenon exists making people respond that their taxes are too low when the top marginal rate is low.
visuals:
1. http://www.truthandpolitics.org/top-rates.php
2. http://www.gallup.com/poll/127346/Americans-Split-Whether-Income-Taxes-High.aspx
