Here’s a riff from Obama’s budget speech today that I predict you’re going to hear quite often over the next year:
Meanwhile, these proposed tax breaks would come on top of more than a trillion dollars in tax giveaways for people making more than $250,000 a year. That’s an average of at least $150,000 for every millionaire in this country -- $150,000. Let’s just step back for a second and look at what $150,000 pays for:
A year’s worth of prescription drug coverage for a senior citizen. Plus a new school computer lab. Plus a year of medical care for a returning veteran. Plus a medical research grant for a chronic disease. Plus a year’s salary for a firefighter or police officer. Plus a tax credit to make a year of college more affordable. Plus a year’s worth of financial aid. One hundred fifty thousand dollars could pay for all of these things combined -- investments in education and research that are essential to economic growth that benefits all of us. For $150,000, that would be going to each millionaire and billionaire in this country. This budget says we’d be better off as a country if that’s how we spend it.
This will, I think, prove one of the crucial arguments of the election. If Obama can convince the electorate that taxes go to fund services they actually care about, and the Republicans are unwisely committed to gutting those services in order to cut taxes on the richest Americans, then he’s likely to win. If Mitt Romney is able to persuade them that taxes are mostly wasted, and that spending should be gutted to pay for large tax cuts, then he’s likely to win.
That said, I’m not sure where Obama’s $150,000 is coming from. I’m guessing that the White House is using the Tax Policy Center’s analysis of the Ryan plan. Table T12--0079, to be exact. That’s where they break Ryan’s plan down by income percentile. And sure enough, the top one percent gets an average tax cut of $155,000.
But Obama said “millionaires and billionaires.” Perhaps he means folks making at least a million dollars a year. (If not, then it’s not true that every millionaire and billionaire gets a huge tax cut. After all, some seniors are millionaires, but they don’t pay much in income taxes, and so won’t get a big tax cut.) If that’s the case, then remember: the top one percent begins around $400,000. If you’re just looking at millionaires and billionaires, you need table T12-0078, which breaks Ryan’s plan down by cash income. There, you’ll see that taxpayers making more than $1 million get a $265,000 tax cut on average. So that goes even further to make Obama’s point.
Or perhaps I’m looking at these numbers the wrong way and they’re based on some calculation of the taxes paid by the average millionaire