Well, the title of this post is a little tongue and cheek. First of all, I am not a wealthy person. I live in a modest home, drive modest/used cars, have a "dining out" budget and go on one vacation per year within driving distance. So, I don't have any bias here against the poor or rich for that matter.
I was prompted from a recent lecture to look at why democrats continue to waive the flag that the wealthy don't pay enough tax or get too many tax breaks. The general sentiment from the dems made me feel really sorry for the poor. One poorer person might make a few bucks then Uncle Sam swoops in to just take it away. No food or shelter tonight folks, pockets empty...
That scenario is simply not true. After searching the internet for such discussion, I discovered that Rush Limbough(spelling), made this argument years ago when the flat tax was a hot issue. However, since then, he has moved on to other topics. So what is the truth you ask? Well, I never thought the IRS was my friend, but in this case, they are very open with the stats of their business - collecting income for the running of our country. Thank you federal government! My discovery was astounding:
In 2004 (the most recent published data), the total tax share - that's who paid what portion of all federal reserve collections for the year 2004, is as follows:
The top 1% AGI Earners -- paid 36.89% of the fed reserves total collections
The top 5% AGI Earners -- paid 57.13% of the fed reserves total collectionsThe top 10% AGI Earners -- paid 68.19% of the fed reserves total collections
The top 25% AGI Earners -- paid 84.86% of the fed reserves total collections
The top 50% AGI Earners -- paid 96.70% of the fed reserves total collectionsThat means that 50% of the bottom AGI wage earners pay 3.30% into the pot to service our country. I won't address the idea that the bottom 50% of wage earner likely contributes to our country's expenses with special programs et.al. more than the top 50%, but I just don't see how this tax structure encourages success.
Heck, for the matter, for argument, let's look at it from another angle... From the statistics above, the top 5% of wage earners pay over 50% into the pot for government service that serves 100% of us. Hmm...
Taxing the successful just doesn't make since nor is it the American way. I am not for or against the poor or rich. Heck I am a middle class kind of guy here, but I am in favor for success incentives. Capitalism. The
opportunity to succeed is what our country's success was built on, not mediocrity.
After reviewing the stats, I am amazed by the facts. Even in the midst, we still are the land of opportunity that I mention above. I just think about how much opportunity is lost due to myopic ideas on taxation instead of progressive. Woah, did I say "progressive". Isn't that the new buzzword for democrats? Aren't they now labeled "progressive" instead of "liberal"? Maybe we need to define the term progressive -- again tongue and cheek.
So, what am I going to do? For starters, I will pay my taxes next year. I mean, we do live in a free and safe country where I have the privilege to make a profit (though it's taxed out the butt), worship my God, and write about my concerns about our society, among many others. I will also pay more attention to what our future leaders stand for concerning the issue of tax.
Any thoughts out there?
Source: http://www.irs.gov/pub/irs-soi/04in05tr.xls (all the way to the bottom)