The Rich Don’t Pay Their Fair Share? A Look at the Facts, Not Fantasy


Tax the Rich

The Great New Society – thanks to NiceDeb for the picsource!
http://nicedeb.wordpress.com/

I just saw a debate on CNN between Justin Ruben (not Justin Bieber, like my brother thought) and Anderson Cooper. Ruben insisted that Republicans were making “a war on women” with the election, and were pitting women against students to attack both. Republican attempts to cut down deficit spending made up the heart of Ruben’s argument. But when Anderson asked him how he planned to pay for the programs we can’t afford, he whined that we should “make the rich pay their fair share” so everyone else could continue to ride the gravy train.

Their “fair share?”  If Democrats want to make this an election about fairness, they are certain to lose!

What am I talking about? First of all, look at these numbers:

  • The top 1% of income earners pay 22.7% of income taxes
  • The top 10% of income earners pay 50% of  income taxes
  • The top 20% of income earners pay 65.3% of  income taxes
  • The top 40%of income earners pay 84.3% of  income taxes
    (h/t to our source here)

The top 40% of income earners pay 84.3% of income taxes? The top 1% pay nearly a fourth? That’s not fair enough for you? Perhaps, on the issue of fairness, we should look at what the lower-income groups make:

  • The bottom 20% of income earners pay 1.1% of income taxes.
  • The bottom 40% of income earners pay 6.1% of income taxes.

Anyone have a calculator? The bottom 40% pay about 6% of income taxes. The top 40% pay about 84%. Through some elementary school-level arithmetic, we find that the top 40% pay 14 times as much in taxes as those in the bottom 40%. But yet many liberals (including President Obama) have said that the rich aren’t paying their “fair share.”

What seems fair to you then, Mr. President? Should the top earners pay 15, 20, 50 times as much? 100? 1,000?

Wait! I can hear it now… “You know, that’s just a slippery slope. Logical fallacy. Just because taxes seem unfair now doesn’t mean they’ll get more unfair in the future.”

Oh, really? Let me remind you of something. Income taxation began in 1913. In that year, the top marginal income tax rate (the highest rate you could pay) was 7%. Just seven years later, it stood at 73% – an increase of a factor of 10! Yet if I had made my case in 1913, I would have gotten the same “slippery slope” retort!

Today, things are a little better, since the top rate is only 500% of the 1913 level. But apparently that’s still not high enough. We now need to tax the rich more so we can spend more – the liberal philosophy, in a nutshell. As Oscar Wilde so eloquently put it, “the bureaucracy must expand to meet the needs of the expanding bureaucracy.” Your President believes the rich should pay for that expansion. Republicans, on the other hand think the government should shrink, and the savings should be passed on to you.

But Geez-O-Pete! From 7 to 73% in seven years? The top 1% pay 25% of all taxes? The top 40% pay 84% of the total? The lower 50% pay nearly nothing?

Looks like the last thing Democrats can afford is an election based on fairness.

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I'm a young guy with a news addiction. I love engineering, politics, and economics, and I have a mind built for analysis. Also, I write a lot, though I hate the paperwork... You can read my work at www.dynamopolitics.com !

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Posted in President Obama, The Modern Conservative
19 comments on “The Rich Don’t Pay Their Fair Share? A Look at the Facts, Not Fantasy
  1. Addison says:

    You forgot to mention that the top marginal income tax rate has dropped to 35%. And I’m sure you know income tax works in brackets…

  2. Addison says:

    I do think we should raise the highest marginal income tax rate.

    • Ok, to what? And to what end?

      • Addison says:

        I think somewhere along the lines of 40 to 50 percent would be reasonable. What do you mean by “what end”?

      • I mean, why are we raising the tax? Do you want the “social justice” or “more revenue” debate?

      • Addison says:

        revenue definitely.

      • There are numerous studies out there by the CBO and FreedomWorks that explain clearly that raising taxes on the wealthy will not even make a meaningful dent in the debt. I remember reading one study which said a 50% top marginal rate would reduce the debt by $600 billion.

        That is 4% of the debt.

        The real threat to a balanced budget is entitlement and defense spending. I say cut and modernize. The budget needs to be balanced. Trying to do it on the backs of the rich is like trying to hold up a crumbling bridge with one pillar. What we need is some new suspension cables, a better road surface, more efficient pavers and rust-proof paint. That’s how we’ll bridge the gap from the debt of today to the prosperity of tomorrow.

      • Addison says:

        How much does the gov. make on income taxes per year?

      • According to yahoo answers (haha) …

        http://answers.yahoo.com/question/index?qid=20090118134308AAieLX1

        The response seems reasonable and I trust the source, I’d say we can go with these figures for argumentation.

      • Addison says:

        Yeah, so I’m just a little confused… You said that you “remember reading one study which said a 50% top marginal rate would reduce the debt by $600 billion.” Do you mean deficit by 600 billion? Or debt over one year? Because 600 billion is a pretty substantial amount over the course of 20 – 25 years. After all, we can’t fix the debt overnight.

        Am I right? or am I being stupid?

      • I believe it was the national debt, over 10 years. Could be wrong on that though…

      • Addison says:

        What I mean is: as long as we can get rid of this deficit, we can eventually get rid of the debt. According to the debt clock we have a $1.3 trillion deficit. According to you, raising the tax to 50% on the highest bracket would make us .6 trillion [per year]. This redeuces the deficit to .7 trillion (right?). Which is obviously not a complete solution. That is why I agree with you. Defense and SOME entitlement should be cut (don’t know too much on that though). Anyways, that’s just what I think…

      • Ok well like I said I agree with the cuts idea. However, if memory serves, I think the $600 billion figure is over 10 years, meaning a $60 billion gain per year, or .06 trillion. That changes your numbers to a reduction of the deficit to $1.26 trillion on the first year, with the last year’s deficit running at $700 billion. However, that also ignores the fact that the deficit is projected to GROW each year at a rate exceeding the reduction by taxation. Simply put, every year it gets worse, and raising taxes is simply not enough to counteract it.

      • Addison says:

        Oh, I gotcha… didn’t understand what you said at first… Now I wonder if it’s actually true..

      • So do I. Look for some hard numbers and we can debate!

  3. […] think of their implications from a political perspective. Liberals generally believe raising taxes (besides being a matter of moral fairness – which it isn’t) would raise revenue for the government. But what if we were already taxing revenue at point B on […]

  4. […] dollars in income tax revenue – enough to buy 8,000,000 Ferraris. Surprisingly, though, for all the talk of the “99 vs. the 1%,” the rich paid for the vast majority of that […]

  5. […] rich pay far more than their fair share – the rich pay 40% of the taxes but make up 2% of the population! Tell us how that’s […]

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DYNAMOpolitics

DYNAMOpolitics

I'm a young guy with a news addiction. I love engineering, politics, and economics, and I have a mind built for analysis. Also, I write a lot, though I hate the paperwork... You can read my work at www.dynamopolitics.com !

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