Underground Informer Volume 5 Issue 18 November 5, 1994 Page 9 Rush Limbaugh the Anti-Christ? Part 2 (continued from previous page) By Pip... Wait a second, something is missing here. The chart clearly shows an 11 percent addition onto the tax burden of the top 5 percent of tax-paying wage earners. Rush states that the top marginal rate was reduced from 70 to 31 percent; that's a drop of 39 percent. I'm willing to credit the IRS with a lot of things, but honestly this takes black magic. OK, in 1981 you pay 70% in tax you keep 30 percent, that's 100 percent total. In 1988, you pay 31 percent tax and keep 69 percent; this too is 100 percent. Yet our friend the chart shows an 11 percent increase in tax burden. Methinks there's a bit of trickery here. Let's drag that chart out again. Share of Federal Income Taxes Paid by Income Groups, 1981/1988 Fiscal Year Top 5% Wage Earners Missing 45% Bottom 50% Wage Earners 1981 35% 57% 8% 1988 46% 48% 6% Rate of change +11% -9% -2% Total 0% Oh I see, this chart is only good for wage earners. So it seems we don't have a full picture here after all. For example, corporate profits or capital gains wouldn't be defined as wages, thus are not included in this chart at all. The point that Rush is making here is that the top 5 percent of the wage earners pay 46 percent of the tax burden. This really isn't anything new. The most tax is paid by those most able to pay. These people earn more wages, make more use of the services these taxes pay for, and thus pay a greater share. This chart is sadly lacking a few things, though. One nice factor left out is the actual amounts of income earned by these groups. Another is how this share of the tax burden fits in with the other shares. In his statement, Rush freely compares apples to watermelons to prove his point. It's the only way you can show on one hand a 39 percent tax cut for the same group you're showing an 11 percent tax increase for--if, in fact, they are the same group. Back to Rush: "Now one more chart I want to show you. This is what happened to inflation during these horrible '80s." Inflation Annual Change in Consumer Fiscal Year Price Index 1980 13.5 1984 4.3 1988 4.1 Source: Economic Report of the President, Jan. 1993, Table 13-59, p. 462 Rush explains the chart: "In 1980, the last year of the Carter administration, inflation was 13.5%. After four years of Reagan, it was down to 4.3%, and after 1988 when he left office, it was at 4.1%--and this is after the strongest recovery of all nine recoveries since World War II. Now if the Democrats want to run against all this, if they really think they can improve on this, let them try." Pip once more: I think the idea was to cut inflation while balancing the budget and reducing the national debt, not to cause a tripling of the national debt while paying lip service to balancing the budget. It's more than likely that the greatest cause of the drop in the inflation rate was the surging growth of the microcomputer industry. Look at the numbers for the second term under Reagan. Yeah, we have a 0.2 percent drop in inflation: a 9.2 percent drop in the inflation rate in his first four years and a 0.2 percent drop in his second term. The 9.2 percent drop comes as the computer industry growth booms, and the 0.2 percent drop comes as the same industry maximizes and levels out. Still want to credit this process to Reagan? I'd say there were other forces at work here that he's being credited with. Tell you what: if everything was so wonderful, let's have Rush prove it by taking a walk through Central Park alone at night. Hey, it's been two years since Bush was voted out of office. If things were so great under Reagan, and Bush did little more than follow the Reagan party line, then job creation should have been up and unemployment down when Bush left office. Logically, crime, interest rates, inflation, the price you pay for goods and services, and the national debt should have been down. The dollar should have enjoyed a higher exchange rate in foreign markets, the stock market should have been booming, and our export rate should have been up. This is the type of prosperity Rush so glowingly credits to Ronald Reagan. If this is true, then what is it that everyone is so upset about today? If we had this wonder era of prosperity under Reagan as Rush states, then what happened to it? Why isn't it still with us? The simple truth is that Rush didn't tell you everything. I doubt you'll find many failed family farmers or out-of-work steel industry workers that agree with his statements. To be sure, Rush had much more to say. I will deal with it next time in Part 3, where the proof of the Reagan greatness falls flat on its face. Pip from the darker side of sanity... ~~~~~~~~~~~~~~~~~~~~~~