Income Inequality and the Marco Rubio Tax Plan

Dividends TaxationPaul Krugman provided this fine pie chart that shows who exactly is paying taxes on long term capital gains. The reason it is important is because Marco Rubio wants to eliminate this tax. Up until now, this idea has been extreme even for Republicans. And you can see why: over half of benefits from Marco Rubio’s tax cut would go to the top 0.1% — the people in the top 1/1000th of the income distribution. And if you look at the whole of the top 1%, that’s almost 80% of where all the benefits go.

Still, I find the graph a tad bit deceptive, because people tend to assume that “everyone else” is somewhat equitable. I’m not suggesting that Krugman means to imply this. He’s making a different point anyway. I just know how non-mathematical people think about this kind of stuff. Something that Krugman has written about over the years is that inequality is kind of like a fractal. (Actually, I believe that’s my analogy, not his.) It doesn’t matter where you are in the income scale, the people above you are a lot more rich than you are. It’s such that people barely in the top 1% often think of themselves as poor because they are around people who are so much more wealthy. And so on until you get to Bill Gates, who when asked if he was rich said only, “Well, I’m certainly not middle class.” (Or something like that.)

Marco RubioThe data for this graph comes from the Tax Policy Center. And if you look at the top 5%, you get 92.3%. The top 10%? 95.4%. And the top 20% — the upper class? 97.5%. So 97.5% of Marco Rubio’s tax cut on long term capital gains would go to the upper class and only the upper class. Pretty amazing, huh?

So let’s talk about what these high incomes mean. In order to just make it into the top 10%, you would be making over $115,000 per year. To just make it into the top 1%, you need to be making more than $400,000. I can’t find data on the top 0.1%, but we are talking millions per year. So these are not people who are struggling. They are not the people who need helping and they are not the “job creators” who will start hiring if only they had just a bit more money.

But it’s worse than even that. There’s 2.5% left over for the bottom 80%. Is it shared even somewhat equally? Of course not!

The upper middle class gets most of the remaining: 1.9%. The middle class gets almost all of the rest: 0.6%. The lower-middle class get the final 0.1%. The lower class — those in the bottom 20% — get nothing at all. Of course, you can depend upon the Republicans finding some middle class person who gets all their income from long-term capital gains and dividends, and making a commercial where they talk about how much better their lives will be. Meanwhile, millions more children will go to bed each night hungry. But that won’t be mentioned.

Income inequality is a virus that is killing our democracy. And it does those who have excessive money no good. As Henry George noted long ago, “Man is the only animal whose desires increase as they are fed; the only animal that is never satisfied.” I don’t think this is a natural state, but rather the result of a civilization that has no values beyond that of commerce. And people like Marco Rubio think this is just great. The next time he mentions God, remember what he really worships.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

12 thoughts on “Income Inequality and the Marco Rubio Tax Plan

  1. I fully expect Marco Rubio to be the next US president. I’d be delighted to be wrong. I doubt I’m wrong.

      • W was lazy too (although Rove wasn’t), and cognitively challenged to boot. Two terms, madam. Two goddamn terms.

        Beware Rubio. His level of Pure Evil is higher than you think. Carson, Fiorina, Trump, they pretend to be soulless maniacs, but they’re just garden-variety nincompoops. Rubio’s the real deal. He’s serial-killer insane. If wearing a belt made from human livers would bolster him 1% in the polls, he’d be trolling the streets at night, aching for that sweet sweet taste of bleeding flesh.

        Cruz is much the same, but he’s dumb.

        • Have you been having a little bit of the something something? Because your hyperbolic language is getting more and more out there.

          Rubio is a fairly lazy guy and while he is slippery, Clinton will run him ragged.

              • Do keep in mind that beyond the something something, my Internet training has been on sports blogs. On sports blogs, it’s a big deal to be the first to say, “this player will stink/have a great season, mark my words.” Nobody ever cares who predicted this, nobody marks their words. And yet it’s pretty much all sports blog participants want to do, is predict stuff. I suppose it rubbed off a little.

                But — MARK MY WORDS — Rubio is getting some pickup from the vanity candidates who quit after Iowa. (They’re all vanity candidates, to be sure.) The thugs who love Trump already love Trump. Others dropping out of the race isn’t going to help him. It will help Cruz/Rubio. My instinct would be to say “there’s no way a national political party could nominate Ted Cruz, he’s too much of a blithering idiot” but that hasn’t stopped them before, has it?

                Ladies and gentlemen, your next Leader Of The Free World: https://www.youtube.com/watch?v=VcFLpCzZea0

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