Controversy Over Taxes? Must Be An Election Year

Before you read the rest of this post, write down your answer to this multiple choice question on a sticky note:

In order to be “fair”, what percentage of all U.S. federal income taxes should be paid by the top 10% of high income households (those earning $112K per year or more)?

a.  10%

b.  30%

c.  50%

    d.  70%

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Part 1

Remember hearing about that horrible “One Percent” last year?  You know, those greedy rich people who don’t pay their fair share of income taxes?

As compiled by Mike Rosen at Denver’s 850KOA radio, and corroborated by the NTU, here are the actual facts based on IRS data for tax year 2009 about who pays federal income taxes and how much:

The top 1% pays 37% of all the federal income taxes.  The top 5% pays 59% of all federal income taxes.  And the top 10% pays 70% of all federal income taxes.

Do you recall who was complaining so loudly about the greedy “One Percent” not paying enough?  It was the Occupy protesters and their behind-the-scenes political organizers, who boisterously represented the bottom 50% that collectively pays only 2.3% of all federal income taxes.  In fact, the bottom 47% now pays NO federal income taxes at all.

How can any rational person see the facts in the last 2 paragraphs and conclude that the top 1% don’t ALREADY pay their fair share??

Did you know these facts?  Did you answer the multiple choice question correctly?  I’m guessing probably not, because the liberal media establishment that dominates the airwaves and cable (ABC, NBC, CBS, CNN, MSNBC, PBS, NPR) doesn’t report them.  They’d rather you not know that their unconstrained narrative is based on a bogus premise.

Keep the above facts in mind as I move on to…

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Part 2

In nearly every major election year, it is SO utterly predictable that a giant political fight will flare up about taxes.  The unconstrained big government politicians maneuver the chess game to perfectly time a big loud fight over taxes for the autumn season just before election day.  This way they can play, yet again, the oldest trick in the political playbook:  Inciting class warfare.

The strategy is ridiculously obvious.  Just convince the bottom 90% who pay only 30% of the federal income tax burden to vote for the politicians who will raise tax rates on the “greedy” top 1% or 2%.

Click here  to see President Obama do it, right out of the class warfare playbook.  See the strategy?  Go ahead and do the November 2012 voting machine tally yourself:  Who has more votes to give to President Obama…the 2% of wealthy Americans he’s targeting, or the other 98% of Americans whose jealousy he is manipulating?

President Obama is also on record, during the 2008 debate season, for saying that even if it means the federal government would receive LESS tax revenue, he would STILL favor raising tax rates as a matter of fairness.  Click here to see for yourself (skip the first 1:05 to avoid the anti-Obama spiel and just watch the unedited version that follows).

I believe these two videos, taken together, prove that President Obama’s priority is not to rescue this country from the lingering dismal economic conditions.  His priority continues to be his goal of “fundamentally transforming the United States of America.”  Despite anything he says while on camera, his actions indicate to me that he’s willing to prolong this near-recession indefinitely in order to keep pushing to achieve the long term transformation.

Trouble for him is…he’s facing an election where his rhetoric, so well documented now, is catching up with him.  Unlike 2008, he’s no longer just an unknown orator.

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About Necessary and Proper

Jeff believes in the Individual's ability to excel when liberty and freedom of choice are protected. Also believes in the Community's ability to take care of the vast majority of its own issues and needs when the federal government leaves the Community's resources and sphere of control alone. State and local choice produce better results than centralized federal control. https://necessaryandpropergovt.wordpress.com/
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7 Responses to Controversy Over Taxes? Must Be An Election Year

  1. davidwithastick says:

    Unfortunately, so much of our country believes the lie of class warfare, especially as an ever-increasing percentage of the US is living on subsistence from the government.

    A flat tax fixes so many problems with the current opaque tax code. It takes away the power of the government to persecute individuals and businesses with obscure applications of the law, ensures that everyone, regardless of income, has at least some stake in the success or failure of the country, and also allows individuals and businesses to anticipate risk of investment by not being blindsided by new laws that are often applied retroactively.

    Question: How in the world is a country that believes that the wealthy should pay more and the middle class should pay nothing ever going to agree to a flat tax, which would be the largest tax increase on half the population in US history?

    Like

    • libertyandbagels says:

      When the country institutes a negative income tax. If everyone paid 20% in taxes, but the bottom level of income per family was $15,000, and the poor wanted to increase taxes for services, they’d have to pay too.
      Before I’m destroyed for sounding like a socialist, this is basic Adam Smith invisible hand stuff here. I may have evolved on my thinking somewhat but it’s basic stuff.

      Like

  2. libertyandbagels says:

    The multiple choice question is very misleading. If the top 10% control 50% of the wealth, they should pay 50% of the taxes. That number is closer to 80%: http://thinkprogress.org/economy/2011/10/03/334156/top-five-wealthiest-one-percent/
    How can one argue that the bottom 80%, who control 7% of the wealth, should pay more?
    That said, I think we should punish people who offshore money and jobs, give everyone a flat tax and fix the financial services industry.

    Like

    • Welcome, libertyandbagels. Thank you for commenting.

      There’s a difference between income and wealth. Taking them one at a time: The link I provided to Mr. Rosen’s data which originated from the IRS shows that in 2009 the top 10% brought in 43% of the Adjusted Gross Income in the U.S. So on a flat proportional basis which it appears you endorse, they should pay 43% of the federal income tax burden. Regarding wealth (which is the accumulation of a stream of income), I disagree that taxation should be based on wealth. The money coming into a person’s repository of wealth is taxed once by the federal government through either income taxes or estate taxes. Then the investment growth of that repository is double-taxed via the federal capital gains tax. I just can’t agree that the federal gov’t should get a 3rd bite at the apple of a person’s earned property by instituting a wealth tax. Triple taxation would be unconscionable. You are mixing apples & oranges when you essentially say that the top 10% should pay 80% of the income taxes because they own 80% of the wealth. (By the way, I didn’t check the accuracy of your 80% fact…I’m just repeating it here. No matter what that percentage is, my point stands.)

      My post did not in itself argue that taxes should be raised on lower income people. I was including the statistics about the lower 50% and the lower 47% just to finish illustrating who pays what, before I made the point that obviously the top 1% already pays its fair share. I was also setting the stage for part 2 where I illustrated how this issue is consistently used to manipulate voters by whipping the jealousy of the majority of voters into a froth of resentment just before every election.

      That said, there is some philosophical merit to Davidwithastick’s point that everyone with any income at all should have to pay at least SOMETHING in income taxes, no matter how small, so that we all have a stake in the game. At present, we’re literally voting against each other, rather than trying to find common ground that we can all vote for together.

      Finally, I am fundamentally against government imposing bureaucratic solutions upon every issue. I’m not against prudent government regulation, but I’m not for comprehensive regulation. Everything cannot be master planned by a central authority. And specifically regarding punishing people who offshore money and jobs…here’s what Adam Smith had to say about it on page 422 of Wealth of Nations, Vol 1:
      “What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.”

      And later on page 458 of the same reference:
      “In every country, it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest. The proposition is so very manifest, that it seems ridiculous to take any pains to prove it; nor could it ever have been called in question, had not the interested sophistry of merchants and manufacturers confounded the common sense of mankind. Their interest is, in this respect, directly opposite to that of the great body of the people.”

      That was Adam Smith’s view of government intervention into the international marketplace at the behest of industry and labor lobbyists. Though government intervention may have good intentions, the actual results are what should be judged. Artificial controls on international trade only result in higher prices paid by the consumers. Individual groups (labor, manufacturing industries) may benefit, but the consumers lose more than the benefitting groups gain. Trouble is, the consumers are a voiceless diffused interest, while the labor and industry groups (via their lobbyists) are a boisterous and concentrated interest.

      Thanks in advance for your continued participation here.

      Like

      • BradsDrift says:

        “Adjusted Gross Income” is misleading – definition according to investopedia.com “Definition of ‘Adjusted Gross Income – AGI’
        A measure of income used to determine how much of your income is taxable. Adjusted gross income (AGI) is calculated as your gross income from taxable sources minus allowable deductions, such as unreimbursed business expenses, medical expenses, alimony and deductible retirement plan contributions.
        Also referred to as “net income.”
        Read more: http://www.investopedia.com/terms/a/agi.asp#ixzz23kjQfSHK

        Wealth is built utilizing the systems and resources of the United States and should be taxed every year an individual or business entity increases their wealth. Therefore, the top 10% that purportedly has 80% of the wealth should contribute 80% of the taxes.

        A quick investigation shows the country’s economic health is strongly linked to the tax rate of the ultra-rich. The higher the tax rate the better the economy. (Incidentally, the tax rate is now one of the lowest it has been in our country’s history) From the Washington Post 6/11/2011 it can be seen that when the ultra rich are taxed 75% or higher, the economy grows fastest.

        http://www.washingtonpost.com/blogs/ezra-klein/post/tax-rates-and-economic-growth-in-one-graph/2011/05/19/AGLaxJeH_blog.html

        Now, the ultra rich have not actually paid this as the government sets up tax breaks in the areas investment is most needed (again spurring growth).

        I agree that ALL people should pay taxes. A flat rate (say 15%) for the bottom 90% and an 80% rate for the top 10% of WEALTHIEST Americans.

        Now, in the past, I would have jumped right into the less government in our lives thought. The problem is that by most scientific estimates, the earth is at or nearing its carrying capacity. The result is that BY DEFINITION anything that someone else does has direct impact on the rest of the population. So, we are entering – for the first time in history – a time in which the liberty of an individual will DIRECTLY AFFECT another individual. We are entering a time that will require great thought and, yes, master planning. I would rather this be a public process within the government than the way it is occurring now – the wealthiest do what they want, the rest of us pay for the impacts…

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        • Good evening, Brad, and welcome. You have an interesting viewpoint…thanks for contributing it here.

          I regret that I don’t know how to reply to your first paragraph because I don’t understand your point. You assert that AGI is misleading, but you don’t say why you think so.

          Regarding your second paragraph, you describe “the systems and resources of the United States” in an antiseptic & faceless way, as if they’re the primary or the only factors of economic production. Reading that, I must say I sure hear echoes of “If you’ve got a business — you didn’t build that. Somebody else made that happen.” Brad, humans are not drones in a beehive or an anthill. Incentives and rewards matter to the human spirit. Noticeably absent from your assertion is any mention that wealth would not materialize without the individual’s sweat, toil, sacrifice, talent, creativity, willingness to invest his/her valuable time, and the guts to risk the loss of his/her investment capital to start the endeavor in motion.

          I already explained that the ANNUAL GROWTH in a person’s wealth (via new income and/or capital gains on the investment of past income) ARE taxed…yet you act as if I didn’t already cover that. To continue taxing an individual’s personally-earned property again and again — like a shark circling back to strike over and over until the carcass is picked clean — is, as I said, unconscionable. One individual asserting a confiscatory claim to 80% of another person’s rightful property (earned income) is clear and simple theft. And when that theft is enforced by a government policy, then that societal system is called totalitarianism, not a constitutional republic.

          An Ezra Klein blogpost on a Washington Post web server is nothing more than Ezra’s opinion. It’s there to draw as many hits as possible to that web site, so the WashPo can earn money off of Disney, AT&T, and all the other ads I just saw there. Ezra’s opinion carries no more validity than yours or mine. His graph comes from a left-leaning think tank, and contains statistics that show two variables (GDP and top marginal income tax rate). Ezra then asserts that one is a cause of the other. Statistics, and the stories they tell via graphs, can be and regularly are cherry picked. Rarely can one simple graph of such a complex topic tell a whole story in a small nutshell, as his headline implies.

          Lest you think that cherry-picking isn’t a widely practiced art, let me point out that even you have just cherry picked from Ezra’s article. You said “The higher the tax rate the better the economy,” ignoring the fact that Ezra said “I want to be very clear here: I am not saying, and no one should think, that high marginal tax rates drive growth.”

          Let’s map out the stroll we’ve just taken down the cherry-picking lane: The left-biased Center for American Progress cherry-picked the statistics they wanted to graph. Then the left-biased Ezra Klein cherry-picked the graph he wanted to include in his WashPo blog post. Then you cherry-picked the WashPo blog post you wanted to include in your comment, ignoring the caveats that Ezra included after his graph. (And yes, of course, the right-leaning Jeff is cherry-picking the points he is using to reply to your comment.)

          How do we cut through all this bias? Here’s how I do it: My position is that I am willing to pay taxes on my hard-earned income, in the neighborhood of 25%-30%, allowing me to keep 2-to-3 times more of MY earned property than the government takes to spend on infrastructure and strangers outside my family’s household. What gives me the prerogative to assert this opinion? I earned my money. It has rewarded productivity that occurred primarily because of my actions. It is immoral for others who did not earn my money to lay claim to 4 times more of it (80%) than they’re willing to let me keep (20%).

          Regarding your proposed system of taxation, I must point out that since the income level of the top 10% of U.S. earners starts at an AGI of $112K, you are saying that they should forfeit 80% of that income, or almost $90K, to the government? Uhh…I’m not sure you’ve really thought that through, Brad. It’s ironic that you then go on to say it’s time we all forfeit our liberty and place our fate in the hands of great thinkers and master planners. Hmmm…well, please count me out.

          You haven’t refuted my points, Brad…you have simply asserted your own alternative view.

          I will conclude by observing that I am a realistically constrained thinker who believes in individualism…you seem to be an idealistically unconstrained thinker who believes in collectivism. We have a conflict of visions, and it is unlikely that either of us will be able to win the other over.

          I wish you good health and endless patience in your quest, though, Brad.

          – Jeff

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  3. Here is an interesting statistic. We could eliminate the personal income tax outright and we would only have to trim the government back to the size it was during Clinton’s second term to balance the budget. We didn’t even have a personal federal income tax for more than half of the country’s history. Let’s stop tinkering around the edges and eliminate the thing for everybody.

    Adam

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