" We also pay virtually all the taxes in this country"???

What income group pays the most federal income taxes today?

The latest data show that a big portion of the federal income tax burden is shoul­dered by a small group of the very richest Americans. The wealthiest 1 percent of the population earn 19 per­cent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes. These are proportions of the income tax alone and don’t include payroll taxes for Social Security and Medicare.

He is so right about that!! Manufacturing is what made this country great!! We need to substantially reform the Worker's compensation system which is mostly responsible for the manufacturing job losses; then we need to create a proper import tax for those products like:CARS, TV'S, STEREOS, WATCHES, RADIOS, ETC that we used to make here and that have caused hundred of thousand lay offs, so that we can re-train these displaced workers with new comparable jobs to keep us being #1 in the world ( getting a job driving a truck delivering the products we used to build don't count)
Wall Street is greddy that is their nature; it is the GOVERNMENT JOB to distribute the wealth and stop injustices!!

Gary,
I tend to to agree with your article as a whole, but I have to point out the one of your supporting pieces is off the mark.

"Workers who earn between $14,000 and $125,000 per year... pay virtually all of the taxes in this country."

According to the National Taxpayers Union, workers earning more than $153,542 per year paid most of the federal personal income tax bill: 60.14%.

Their data is available here: http://www.ntu.org/main/page.php?PageID=6

W Freed, the rich may be taxed at a higher rate, but their deductions are also greater, which means on a whole their tax rates are LOWER. And just like Dubya says, they can afford to hire the high-priced accountants who know every tax trick in the book to lower their rates.

I propose a different spin:

What proportion of the DISPOSABLE INCOME does the top 1 percent have?

How does this percentage compare with the percentage of total income they pay.

In that context, are the top 1 or 10 percent paying an excessive income tax burden?

I acknowledge that at income levels above (approx) $100K, many tax deductions are lost.

While I disagree - in the context of disposable income - that the top 1 or 10 percent are overtaxed, I oppose the stealth taxation effected by the loss of deductions at higher incomes.

I don't object to current tax rates but I believe they should be transparent and lacking in revenue-raising gimmicks like the loss of deductions at a certain income level.

And as companies continue to fail or declare bankruptcy, executives at the top get their outrageous golden parachutes, stock options, bonuses, etc. as the average worker faces layoffs, reductions in everything (wages, vacation, sick time, etc.) and of course pays more in health care costs. When will we rise up and say...NO more...and stop the greed? Boycott corporations because of this greed. Demand that those obscene payouts to the execs be given back to the workers who are keep that company running. Those same workers who now work more and make less....

Good article Gary, failure to listen to advice from guys like you and me helped lead to the problems we are all facing now. Today, as a listened to the radio. with the Dow down, 700, 800... I was STILL hearing the advice...THINK LONG TERM.... the same advice we have been hearing all along. No real gains have been made in the market for the average American during the last 10 years, is that long term enough for you all? Educate yourselves please, or at least listen to some of us that are willing to question the advice of the "professional" financial advisers out there. You wouldn't be hurting so bad now if you had opened your mind and at least considered the fact that all the "pros", who all say the same thing all the time, might be wrong (while they were collecting huge salaries & bonuses that came out of your pocket). Oh, well, all I can say is, it's your choice, keep listening to the "Wall Street Experts" & "Financial Advisers" or really diversify your holdings.
And yes Gary I would agree, manufacturing, is what made this county great, all this "we are a service economy" stuff, that began in the 1980's is a fraud.
One of the problems here is that we don't respect manufacturing anymore. These have become low paying jobs and aren't appreciated like they should be. This country made a wrong turn somewhere along the line, but i think things will correct themselves eventually.
O.K., now it is time for me to "OFFEND" like I usually do, and now,as the "stuff" is hitting the fan, I feel the time is right. I'm sure both me & Gary have had the experience of trying to do a good quality manufacturing job, but we have been over-ruled by some wet behind the ears, 30 something year old, who maybe has brown-nosed their way, or colleged educated their way up to the position they are in. So, they have become a "production expert" without even picking up a screwdriver in their life time. To all of you, and I hope you know who you are, please step aside, (although your ego's will never allow it). You-all can take all the 6 Sigma,Lean manufacturing courses you want, you still won't get it. I don't mind telling you that you are helping to bring this country down, you should resign, and start cleaning toilets until we are ready to promote you.
And all you "financial adviser experts" out there, the same goes for you.... "buy & hold"...kiss my ass.

Yes...it was industrialism and manufacturing that built us and gave us strength. However, the powers behind the hidden agenda to bankrupt this country, have already taken that into account and prepared for it. Now you might understand the "Green Movement", for what it is,....a ploy to tie our hands behind our backs, so we can no longer harvest the resources of this rich country. And the sheep in this country fell into lockstep with this plan. So don't be looking for this country to dig it's way out of this mess soon if ever. We don't even manufacture steel to any significant extent in this country...and haven't for twenty years or more. we import it! There really isn't much in the way of manufacturing that this country does produce anymore, as it got too hard to compete with other countries who could do it cheaper because they did'nt have to deal with all the Government intrusion, regulation and labor unions. All according to "The Plan"!!

Peanut butter!! It's what's for dinner!!

I think 125,000 is too high to be called middle class. I have my own definition of the upper end - somebody who never quite exceeds the Social Security Max.

And for the person who said the wealthy have more deductions, people lose deductions as they climb the ladder.

When I did my last return I had 3 documents that had potential deductions that were denied, in full or in part, because my income was too high - I'm not complaining. I'm glad it was too high.

Julia - Simple math tells us that if the top 1 % make 19% of the income and pay 37% of the income taxes, their *effective* tax rate (which factors in the accountants, loopholes, etc) is 2.5 times greater than the rest of the population. The top 1% of taxpayers also pay an effective rate 8.4 times higher than the lowest 50%.

We ALL played a roll in the downfall of the USA. For it was "WE the people" who spent their money on buying all of the foreign imported products that entered the USA since 1970. Face reality "WE did it to OURSELVES"...all of us. The unions warned us back in the 1960's and 1970's that if we started buying imported TV's Cars, cameras etc....we would be putting ourselves out of work. Nothing remains now but the crying as it is now far too late to recover as we dug the hole far too deep to crawl back out of for OURSELVES.

As a poor person, I claim self defense. I bought what little I could afford, and I couldn't afford domestic products made with $30/hr labor.

A consumption tax would be more fair. That way the people who currently compose the 30% of our underground economy would pay their fair share.

Don't believe 30 % of our economy is underground? A huge amount of consumer business flies under the radar. Ever pay your landscaper in cash? Or your cleaning lady? Did you give a 1099 to the remodeler you you wrote a personal check to?

Trust me. A lot of these guys don't even exist on paper. Some aren't even citizens. Remember all those cabinet nominees that had to withdraw becasue they paid their maids and nannies in cash?

A consumption tax taxes everybody. It's not perfect but it is better than what we've got.

has anybody ever heard of the amt tax? could be the biggest rip off ever impose on the american tax payer. it was never index for inflation, so in a short time it will included you local mailman, [ not just the high earners]meaning no tax deductions, plus double taxation.i use to make good money, but when the amt hit i started paying a lot more taxs. it took away any incentive to be more productive [ now that's a great way to build a business/country]. anyboby ever read atlas shrugged, could be there.

Last year I made 320,000.00 and my Federal tax bill was 79,000.00 so I don't know what your smoking, but I pay a disproportionate amount of my income as tax.

Yes, $125,000 SHOULD be middle class. As cost of living keeps rising, and incomes remain stagnant or fall for those of us not involved in the financial industry, the tax burdens should shift accordingly. I make $100k but I can't deduct my $11,000 per year in student loan interest, which then helps prevent me from affording a mortgage, which then keeps me in a situation of ever increasing rent ($100 increase this year, thanks to all the foreclosure folks moving into my building - my rent is higher than their mortgage was), etc etc etc. My employer keeps dropping benefits so I had $25,000 in medical bills. I have an elderly disabled parent to support. I work in aerospace - how many jobs do you think we will lose after the election? The liberals will slice and dice govt contracts just because they're liberals, the Republicans will have to cut back to justify war funding.... oh yeah, I'm just SWIMMING in money. I don't even have a retirement account because I can't afford one. And best of all, Obama thinks I'm rich and wants to jack up my taxes even higher. So who says six figures isn't middle class in 2008?

A New Economic Agenda
Small changes won't do the trick. Here are eight bold initiatives we need.
By Knight Kiplinger, Editor in Chief
From Kiplinger's Personal Finance magazine, November 2008

http://www.kiplinger.com/magazine/archives/2008/11/knight_kiplinger.html

why is white collared crime so unpunishable ?? why are they allowed to keep the stolen gains that they have gotten by fruad and deceipt of innocent and trusting investors or working class. Is justice that blind . they should be stripped of that money and or any other monatary gains or assests gotten from it and the money returned to the system from where it was stolen and then see how the economy might turn around .now is not the time for finger pointing nor lack of action we all know where and how it all fell in the crapper it is time that crime is treated as crime reguardless of the color of the collar we wear .Its for the people by the people not for the few by the few.