It’s the politics of greed and envy:
Paying for the rest of government, that is, everything envisioned by the Founders — national defense, infrastructure, basic research, education, etc. — plus subsidizing the entitlements relies on the income tax. As has been well documented, 51 percent of Americans pay no income tax, and the top 5 percent pays nearly 60 percent of the income tax.
The bottom line is that a small minority is paying for all of the government Americans enjoy. Why is it fair that they be required to pay more?
I’m not sure the word “enjoy” is quite the right one here. I’m glad that we don’t get all the government we pay for.
There is gonna hafta be a tax increase for everybody, but until that becomes clear (or politically possible) the GOP is right to take taxe increases “on the rich” completely off the table. Now the democrats will have to run as the party of tax raisers, the republicans as the service cutters, and We the People get to choose.
… the top 5 percent pays nearly 60 percent of the income tax.
The bottom line is that a small minority is paying for all of the government Americans enjoy.
Holtz-Eakin is incorrect. Federal income tax only accounts for about 40% of federal revenue. The top 5% does not come close to paying for “all of the government Americans enjoy.”
About 90% of American households are net taxpayers to the IRS, and even the poorest 10% support government in other ways (e.g. by paying sales tax, gas taxes, etc.).
About 90% of American households are net taxpayers to the IRS, and even the poorest 10% support government in other ways (e.g. by paying sales tax, gas taxes, etc.).
Not necessaryily, Jim. If someone in the bottom 10% has children, between things like the Earned Income Tax Credit, food stamps, WIC, and a host of other social welfare programs, they’re likely getting far more back from the government than they’re paying in payroll taxes (SS and Medicare). If they’re single with no kids, not so much.
It’s a silly notion that taxing the rich can substantially reduce our debt. Studies noted on this blog have shown that the government takes in roughly 20% of GDP, regardless of tax rates.
The reason is simple, but requires peeling back the layers of the onion. The money that “The Rich” get does not get spent on consuming products and services which the rest of us might otherwise consume. Well, it does, but not significantly, because they are so few and we are so many, and there are limits to how much a single person can consume.
So, we take their money, and now we have more money. But, do we have more goods and services on which to spend it? Actually, by siphoning off investment capital, we will have fewer. So, the money simply buys less per unit. And, since there are fewer goods and services in the pipeline, we will soon be worse off than we were.
Money is a medium of trade, nothing more. It has no intrinsic value. It continually amazes me that so much of the national debate is founded on such an elementary misconception.
“Why Do We Have To Raise Taxes On The Rich?”
Because — in the words of bank robber Willie Sutton — “That’s where the money is.”
Willie Sutton and the Left…who can tell ’em apart?
Because — in the words of bank robber Willie Sutton — “That’s where the money is.”
Nope, that would be the middle class. See here.
Ace even uses the same Willie Sutton quote.
Holtz-Eakin is incorrect. Federal income tax only accounts for about 40% of federal revenue. The top 5% does not come close to paying for “all of the government Americans enjoy.”
It’s disingenuous to count payroll taxes (SS and Medicare) which account for about 40% of the “federal revenue” since they are “contributions” to an “insurance” program which is now running a deficit that needs to be covered with some of that 40% from the income tax.
At the same time, the spending that is covered by the payroll taxes shouldn’t be counted either … only the amount that is spent to cover the deficits (when SS cashes in those bonds for example) should be counted. Then we could get a truer picture of the problems.
Jim Says:
May 5th, 2011 at 12:23 pm
Nice strawman Jim. I didn’t see the words “federal revenue” used except by you.
No need to raise taxes. We just need to bring entitlement spending under control. But in the bizaro-world lexicon of the theftists that would be a tax increase on the poor.
I think everyone is missing the point. Like my grand father use to say, “If you buy something you own it.” If rich people pay for the government who do you think controls it?
Holtz-Eakin wrote that “The bottom line is that a small minority is paying for all of the government Americans enjoy.”
If that was actually the case, a large majority would not be paying any taxes at all. In reality, virtually everyone pays taxes of one sort or another.