Saturday, August 8, 2009

Let's Just Tax the Rich

Great idea, except that's what's already happening. To Sean Hannity fans, I'm sorry to disappoint, but he's way off on his assertions. A little fact checking clears it all up, however. He's got the right idea, but his percentages are a little skewed in his enthusiasm (he says the top 1% of America's rich are paying 95% of the taxes -- just not true!) So how do we find the revenues needed to sustain our debt ($11 Trillion) and our deficits ($1 Trillion)? Well, let's just tax the rich. . .

Here are the true facts from the IRS (2007 data -- such stubborn things!):

The top 50% of income earners pay a whopping 96.5% of federal income taxes, while the lower 50% pay just 3.5%.
The top 25% pay 83.88% of federal income taxes
The top 10% pay 65.8% (these are people with an adjusted cross income of about $95,000 or higher)
The top 5% pay 54.4%
The top 1% pay 34.3% (these are people with an adjusted gross income of about $300,000 or higher)

So keep these numbers in mind the next time a politician (or anyone else) says we should have a more “progressive” Federal Income Tax. Ask them what percentage of federal income taxes they want the top 1/5/10% of earners to pay, what is their ideal amount?

Should the top 1% pay over 50% of the total collected?

Should only the top 10% of earners pay any federal income tax at all?

Is that what they want to see? Nail them down on their numbers. Class warfare over taxation is so. . . well, it's just so yesterday.

While you’re at it, ask them what they think rich people do when they get a tax cut. Do they reinvest that money into their businesses, hire more employees, purchase goods and services that keep poor- and middle-class people employed, and give more money to charity?

If you listen carefully to the debate talking points coming from those who oppose the rich and want to raise their taxes so the government can redistribute their wealth what do you hear? It seems they believe the rich never do these things. They would have us believe that the rich just hoard this money in a sack under their bed, or burn it, or put it in an offshore account that in no way helps the US economy.

In reality of course, the opposite is true almost 100% of the time.

Tax policy -- where do you really stand on that debate? Post your comments, please. . .


  1. The percentage of total taxes that the wealthy pay is not disproportional to their share of total income. They simply pay a greater portion of their taxes in the form of federal income taxes while the middle class pays a greater portion in the form of state and local taxes.

  2. Very true, and that's the point I forgot to mention in my first post -- looking only at income tax is only part of the story. Thanks!