Class warfare quiz
By Stephen Moore
1. The wealthiest 5 per cent of Americans now capture more of the nation's total income than at any time in this century.
_____ True _____ False
2. A family living at the poverty level in the United States has a higher income than the median family income in how many countries?
3. What share of the total national income is captured by the richest 1 per cent of Americans?
(a) less than 5 per cent of the total
4. What share of total federal income taxes is paid by the richest 1 per cent of Americans?
(a) Less than 1 per cent
5. What percentage of American households on welfare own color-television sets?
(a) 10 per cent
6. Americans with incomes below the median (the bottom 50 per cent) pay what share of federal income taxes?
(a) More than 80 per cent
7. Of all the tax filers with capital-gains income in 1994, the percentage with incomes of $50,000 or less was:
(a) Less than 5 per cent
8. Which of the following nations has the highest capital-gains tax?
9. What percentage of American workers were the victims of corporate layoffs last years?
(a) 20 per cent
10. The percentage of agricultural subsidies that go to farmers with annual incomes of more than $100,000 in 1994 was:
(a) 20 per cent
11. In the eight years before the Reagan tax cuts (1981-89), the average real income of low-income households (bottom 20 per cent):
(a) Fell by more than 25 per cent
12. The average senior citizen today will receive how much more in lifetime Social Security and Medicare benefits than the amount (plus interest) that he paid in?
(a) He gets back only what he and his employers put in
13. If the Federal Government confiscated every penny earned each year by every millionaire in the United States, this would raise enough money to run the Federal Government for:
(a) 60 years
14. If the Federal Government confiscated the net earnings of all the Fortune 500 companies, this would raise enough money to operate the Federal Government for:
(a) One full year
15. Of the richest 400 Americans, what percentage inherited their fortune?
(a) 75 per cent
16. America's very first income tax in 1913 had a top rate of:
(a) 50 per cent
17. From 1980 to 1990, a period when income-tax rates fell from 70 per cent to 28 per cent, total federal tax receipts:
(a) Fell by 10 per cent
18. Which was the most expensive war in American history?
(a) The Civil War
19. This year the Federal Government is expected to spend $1.65 trillion. Adjusted for inflation, this is the cumulative total of federal spending over what period?
20. What percentage of total federal revenues come from the inheritance tax?
(a) 1 per cent
1. False. In 1993, the wealthiest 5 per cent of Americans collected 19 per cent of the nation's total income. In 1930, the top 5 per cent collected 30 per cent. In fact, in every year from 1913 (the earliest year for which data are available) through 1941, the richest 5 per cent had a larger share of total income than they do today.
2. (d)150 countries. The U.S. poverty level for a one-person household in 1994 was $7,750. This was a higher level than the per capita income in all Third World nations and even in many non-poor countries, including Greece, Saudi Arabia, Brazil, South Africa, and Venezuela.
3. (c)15 per cent of the total. The richest 1 per cent of households earn roughly one-seventh of the total income.
4. e) More than 25 per cent. It's a popular myth that the rich don't pay their "fair" share of taxes. They earn 15 per cent of the income and pay 30 per cent of the income taxes.
5. (d)92 per cent of welfare households in the U.S. own color televisions; 98 per cent own a refrigerator; 68 per cent own a telephone.
6. (d)5 per cent. The bottom half of income earners bear just 5.2 per cent of the federal income-tax burden, according to the latest IRS statistics. In 1980 the poorest half of Americans paid 7.5 per cent of the taxes.
7. (d)More than 50 per cent. About 56 per cent of the tax returns with capital gains in 1993 were for Americans with incomes of less than $50,000.
8. e) United States. The capital-gains tax rate is 28 per cent in the U.S., versus 20 per cent in Canada, 16 per cent in France, 0 in Germany, and 20 per cent in Japan.
9. (c)Layoff victims may get headlines, but they are still relatively rare. Only 3 of 100 workers were laid off from their jobs in 1995, according to the U.S. Bureau of Labor Statistics.
10. (c)60 per cent. It is a myth that federal farm subsidies provide a safety net to family farms. The bulk of the subsidies are provided to large agri-businesses.
11. (d)Grew by more than 5 per cent. It is a popular myth that in the 1980s the poor got poorer. The lowest fifth in income saw their real incomes rise by 6 per cent from 1981 to 1989. In the 1970s and 1990s, when income-tax rates were rising, the poor suffered a real loss in income.
12. (d)$250,000 more. Social Security and Medicare should not be called "entitlements,"because seniors currently receive far more in benefits than what they are "entitled" to.
13. (d)Six weeks. Soaking the rich won't balance the budget. Millionaires earn less than 4 per cent of all taxable earnings in the United States. In 1992 there were just 55,000 millionaires in the U.S. -- 0.05 per cent of all tax filers.
14. (c)Two months. In 1995 the total profits of the Fortune 500 companies were $244 billion, which would provide enough revenue to operate the government for 58 days.
15. (c)20 per cent. Only 82 of the Forbes 400 wealthiest Americans inherited their money. Most rich Americans have not "won the lottery of life''; they earned the money they have.
16. (d)Less than 10 per cent. The first income tax in 1913 had a top rate of 7 per cent. A proposed safeguard to the Sixteenth Amendment to prohibit income-tax rates from rising above 10 per cent was defeated on the grounds that no one would ever propose a tax rate that high.
17. e) Grew by 100 per cent. In 1980 federal tax revenues were $517 billion. By 1990, after two income-tax-rate reductions, federal revenues (in current dollars) had climbed to $1,031 billion.
18. (d)The War on Poverty. In 1995 dollars, World War II cost $3.5 trillion; World War I cost $500 billion; and the Civil War cost about $100 billion. The War on Poverty has already cost well over $5 trillion in total benefits since 1965. The War on Poverty has been more expensive than all the military wars fought by the United States dating back to the Revolutionary War -- combined.
19. (c)1789 - 1940. Adjusted for inflation, the Federal Government now spends more money in a month ($125 billion) than it did cumulatively in its first fifty years.
20. (a)1 per cent. In 1995 the estate and gift tax brought in $14.8 billion, or 1.25 per cent of the $1.4 trillion in federal revenues. Thanks to careful estate planning, most very wealthy families have paid virtually no inheritance tax on their family fortunes. A study by economist Richard Wagner of George Mason University finds that the Federal Government would collect more revenues if it abolished the federal inheritance tax altogether.
Stephen Moore is the director of fiscal-policy studies at the Cato Institute.
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