Tax The Rich?

Much has been said recently about increasing taxes on the “rich” to solve our national financial crisis. Why don’t the “rich” pay their fair share of taxes? And just who are the “rich”?

Fact: 47% of all Americans paid no federal income tax in 2019. Of those, some 23 million claimed refundable credits greater than what they paid in Social Security and Medicare taxes. In other words they got cash back. No wonder about half of all Americans consider their taxes “fair”. Of course these people pay some taxes: property, sales, etc, but we all do.

These people are not stakeholders; they have no investment but they receive the benefit of taxes paid by others. I believe everyone should pay something, however small, to fund the cost of the government from which they benefit. If they did, they might be more attentive when increases in expenditures are proposed by bureaucrats.

Fact:  In 2017, the top 50 percent of all taxpayers paid 97 percent of all individual income taxes, while the bottom 50 percent paid the remaining 3 percent..  Not paying their fair share?

If you want to see the “rich” who are being targeted just look around you.  They are small business owners, professionals, hardware store owners, restaurant owners, grocery store owners.  They get what is left after paying expenses and making payroll. And sometimes there isn’t anything left.   Other “rich” own something whether it is capital stock, buildings, equipment, and other investments that generate income.

All of these “rich” people have in common the risk of their assets and time, much more so than leaving their money in the safety of a bank vault or working for a salary. What is the incentive to excel and achieve when more earnings just mean higher taxes? As late as the 1960’s the top marginal rate was 91%. For every $100 earned there was $91 in federal income tax. Now there’s an incentive for you.

Well, what about all those yachts, Bentleys, and mansions these “rich” people own? Surprise, these assets are acquired with after-tax earnings. On acquisition most states charge a sales tax. Each year thereafter a property tax is due based on taxable value. And why can’t people buy what they want, it’s their money after all.

In 2017, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. The top 1 percent of taxpayers paid roughly $616 billion, or 38.5 percent of all income taxes, while the bottom 90 percent paid about $479 billion, or 29.9 percent of all income taxes.

And for you Warren Buffet types out there, you can always send in extra money; the Federal Government accepts any and all donations.

Who’s not paying their fair share?

(Stats used on this page based on data compiled by the Internal Revenue Service)