If one were to attend a union, anti-poverty or general left-wing rally, you would be bound to hear, “Stop the war on the poor! Make the rich pay!” This slogan is shouted incessantly at these types of demonstrations, but would they stop if attendees were showed a report that highlighted the fact that the rich pay all of the taxes and the poor receive a massive redistribution of wealth?
The Congressional Budget Office (CBO) published a report this week that included an interesting tidbit: the nation’s top 40 percent pay 106 percent of the country’s taxes, while the bottom 40 percent pay negative nine percent. One group pays 100 percent (the rich), the other group pays less than zero (the poor).
According to the CBO, a wage earner can pay negative taxes when they receive refundable tax credits through the forms of government transfers, such as food stamps or Social Security. With one-third of the country not participating in the labor force and 120 million people receiving some sort of check from the government, these figures are surely going to widen.
The federal tax rates are expected to go up for everyone, but the largest increases will see the top one percent get hit with the biggest increases. In fact, the non-partisan group says the top one percent could very well see the highest federal tax rate since 1997 in 2014.
For years, especially throughout the Obama administration, economic inequality has been one of the most talked about topics. It is argued that the income gap between the rich and poor is vast and must be addressed through heavy taxation on the rich and massive redistribution of wealth. Both are taking place, but nearly seven million Americans have entered into poverty since President Obama entered office.
In addition, according to an infographic from Fact Check, consumer prices have risen more than 10 percent, food stamp recipients have increased nearly half (49 percent), household income has fallen five percent and gasoline prices have jumped 82 percent. This does not include the negative effects of the Federal Reserve’s quantitative easing.
Of course, as long as there are statesmen and world-renowned leaders that call for more government, a reduction in capitalism and free markets, higher taxes and economic stimulus by central banks, poverty will always remain rampant in the world. The solution is to return to a capitalistic free market economy that gets the government out of the way, lowers taxes and produces sound money.
This won’t happen. Christmas is coming, though, so one can always wish.