Greg Mankiw’s Blog: The Progressivity of Taxes and Transfers

Greg is a mouthpiece muppet for the plutocracy.

Because transfer payments are, in effect, the opposite of taxes, it makes sense to look not just at taxes paid, but at taxes paid minus transfers received.  For 2009, the most recent year available, here are taxes less transfers as a percentage of market income (income that households earned from their work and savings):

Bottom quintile: -301 percent

Second quintile: -42 percent

Middle quintile: -5 percent

Fourth quintile: 10 percent

Highest quintile: 22 percent

Top one percent: 28 percent

The negative 301 percent means that a typical family in the bottom quintile receives about $3 in transfer payments for every dollar earned.

So, government transfer payments marginally reduce the crushing poverty of the bottom 25%, and you are resentful of this?

The most surprising fact to me was that the effective tax rate is negative for the middle quintile.  According to the CBO data, this number was +14 percent in 1979 (when the data begins) and remained positive through 2007.  It was negative 0.5 percent in 2008, and negative 5 percent in 2009.  That is, the middle class, having long been a net contributor to the funding of government, is now a net recipient of government largess.

So, the middle quintile is negative for the first time ever, during the single greatest recession / stagnation since the 1930’s, and you act surprised?

I recognize that part of this change is attributable to temporary measures to deal with the deep recession.  But it is noteworthy nonetheless, as other deep recessions, such as that in 1982, did not produce a similar policy response.

via Greg Mankiw’s Blog: The Progressivity of Taxes and Transfers.

Douche.

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