|
|
TAX THE RICH With tax time just around the corner, I cannot think of a better moment to offer my own version of Econ 101. It amazes me, in a country that has achieved all its greatness due to capitalism, that we have reached a place in history where profits are considered evil. It is profit that motivated Benjamin Franklin, Thomas Edison, and Paul Allen. The greatest inventors, the biggest risk takers, and the monumental achievements that were once highlighted throughout American history books were all inspired by the freedom to achieve wealth. We are now made to believe that every successful business, from Wal Mart to Microsoft, from McDonalds to Google, are evil and greedy entities who would sooner kill their neighbors then reduce the profit line. Today's great pioneers are stoned by media and politicians, and forced into guilty seclusion for the crime of accomplishing great things. Our tax system is the prime example of how far we have fallen since the days of Edison. Income taxes are set up to punish those who succeed, by taking an ever-increasing amount of their earnings away from them. Our tiered tax rate system has become so steep that the top earners now pay virtually all the taxes, while the bottom half pay none. In fact, we now have a term called ‘negative income taxes' referring to the 30% of families in this country who collect more in ‘tax returns' then they paid in income taxes to begin with. This happens with tax credits of different types, which are continually added year by year. Income taxes have now become a means of transferring money from the rich to the poor. We now consider poverty virtuous, while wealth is evil and selfish. Never mind that Americans give more to charities then any other nation on this planet. Never mind that wealthy Americans not only support those in poverty in the United States, but also give great amounts to those in need throughout the entire world. Never mind that the stability of every economy on Earth depends on wealthy Americans getting up tomorrow morning and continuing to produce even more capital then they did today. Does anybody thank the rich for funding all our social programs? Hell no. Instead most Americans detest the rich, and demand on every issue that the rich should pay more. What? You don't believe me? Let me show some numbers Chart 1 (2003 Congressional Budget Office statistics) Notice that the richest 1% among us, those making $295K and over, fund 34.27% of the federal budget. The top 10% of wage earners fund over 65% of the federal budget. Meanwhile, the lower half of wage earners, those with family incomes under $29K per year, fund a measly 3.46% of the budget. In other words, half the people in this country pay virtually no income taxes at all. Some of you are now saying, “I make less then $29K, and I pay lots of taxes.” I am referring to income taxes, not payroll taxes such as Social Security and Medicare. If you want to completely eliminate those, the rich will all be on your side. The same political groups who repeatedly insist on raising taxes on ‘the rich' are responsible for creating and protecting these additional bankrupt programs that take an ever increasing bite out of everyone's paycheck. Some of you are probably thinking, “Sure, but the rich make all the money so they deserve to pay all the taxes.” But if you notice the blue bars on Chart 1, you will see every income group pays greater then their ‘fair share'. Every group, that is, accept for the bottom 50% - who earn 14% of the wages but only pay 3.5% of the taxes. The rich also pay an ever-increasing percentage, as you will see in Chart 2. Yes, the rich have been getting richer. The blue line indicates the top 5% earned 22% of all combined income in 1985, where in 2003, the top 5% topped 31% of all US income. However, the maroon line shows the ever-increasing tax burden for this same group. While their income has raised 9%, the tax burden on the richest Americans has raised by nearly 22%. It is not really the rich that are getting richer, but the government instead. When politicians talk about ‘the rich', whom are they talking about? They will make such statements as, “I do not want more tax cuts for the rich, I want tax cuts for working Americans”. Do you know anyone who does NOT consider themselves a working American? Politicians throw terms like this around, knowing that the average person will think they are only referring to multi-millionaires. Just once, one of these politicians should be asked the question, “What percentage of Americans do consider non-working Americans?” The top 25%? The top 10%? What percentage is it? Chart 3 indicates where the true income groups are divided. Most people are surprised how low these numbers truly are. If the top 25% are rich in the eyes of tax-happy politicians, this means – using 2003 CBO numbers – families with an income over $57K per year are well-off, non-working families deserving of a tax hike. Maybe this is not what they mean. They may only be referring to the top 10% of wage earners. After all, families taking in more then $95K per year are filthy rich, right? For example, a registered nurse married to a truck driver, grossing out at $98K per year. How could we possibly consider giving a tax cut to unearned wealth like that! When some talking head in D.C. tells you that he/she only supports raising taxes on the rich - take one more peek at Chart 3 before giving your vote – because you might have a bull's-eye on your chest! Darrin Barker
|
