Last week, House Speaker Nancy Pelosi (D-Calif.) unveiled the Democrat lawmakers that will serve on the new “Select Committee on Economic Disparity and Fairness in Growth.” The committee will be led by Rep. Jim Himes (D-Conn.) and will feature progressives like Reps. Alexandria Ocasio-Cortez (D-NY) and Pramila Jayapal (D-Wash.).
This Committee is nothing but a progressive vanity project designed to cheerlead for far-left policies like tax hikes and wasteful spending. It is a waste of time and taxpayer dollars and will have no legislative authority.
Contrary to progressive claims, the tax code is already steeply progressive, rich people pay a significantly higher share of total tax revenue, and the policies progressives consider “giveaways” to the rich, and therefore would like to eliminate, have actually resulted in faster wage growth for low-income Americans than any other group.
Progressives falsely claim that “the rich” pay less than low- and middle-income families. In reality, the tax code is already steeply progressive, as shown in a recent report from the Joint Committee on Taxation.
Taxpayers making $1 million and up pay an average federal tax rate of 31.5% while the bottom half of income earners ($63,179 or less) pay an average federal tax rate of 6.3%. That’s nearly five times as much in taxes as a percentage of income.
According to JCT:
- Taxpayers with income of $1 million or more pay an average federal tax rate of 31.5% and an average federal income tax rate of 26.3%.
- Taxpayers with income of $50,000 and 75,000 pay an average federal tax rate of 13.6% and an average federal income tax rate of 2.4%.
- Taxpayers with income of $30,000 to $40,000 pay an average federal tax rate of 7.2% and an average federal income tax rate of NEGATIVE 3.3%. In other words, they receive money back from the federal government due to refundable tax credits.
- The bottom half of income earners pay an average rate (of all federal taxes) of 6.3%, while the top 0.01 percent pay 32.9%.
The rich also pay both a higher share of federal income taxes and a higher share of taxes as a percentage of their income. The top 1 percent earned 21 percent of all income, but paid 40 percent of all income taxes, as noted by research from the Heritage Foundation. Further, the top 10 percent earned 48 percent of all income, but paid 71 percent of all income taxes.
Progressives wrongly claim that the 2017 GOP tax cuts was a “giveaway to the rich.” However, this is not borne out in the data as middle-income Americans saw significant gains following passage of this law. For instance:
- Following the passage of tax cuts, the bottom 25 percent of wage earners experienced wage growth faster than the top 25 percent of wage earners, according to the Atlanta Fed. Black and Hispanic Americans saw their median income hit record levels, while the poverty rate declined to 10.5 percent, the lowest rate in decades.
- Key demographics experienced the growth, including Black Americans, Hispanic Americans, and women, with each group seeing their unemployment rates drop to all-time lows and wage growth increasing by record levels.
- The unemployment rate dropped to 3.5 percent in 2019, a 50-year low. In the same year, median household income increased by $4,440 or 6.8 percent, the largest one-year wage growth in history. This wage growth dwarfed the wage growth experienced under the entire eight years of Barack Obama’s presidency, which was just 5 percent.
- Under this economy, there were more job openings than job seekers for 24 consecutive months. In March 2018, the ratio of unemployed persons to job openings dropped to 0.9. It remained at this low level until the pandemic hit America.
The new “inequality” committee is nothing but an excuse for Democrats to push for higher taxes, more spending, and more burdensome regulations. Instead of highlighting policies that have resulted in significant gains for low- and middle-income Americans, this new committee is just a vanity project for the radical left.