For the past few years, we’ve been inundated with platitudes referring to the top one percent. Evict the one percent, pay their fair share, redistribute the wealth. Occupy Wall Street made some of these phrases quite popular, even when they didn’t really understand economics or the real state of affairs (the Federal Reserve System, for instance).
A part of the reason why Bernie Sanders is so popular with young people is because he exploits their irrational thoughts and unjustified ideas. Kids want free education so he promises to give it to them. Kids want the rich to give their wealth away so he vows to do it. Kids want government to look after them from cradle to grave so he pledges to do so.
Indeed, we’re regularly told how wealthy the one percent is. We’re always told there is a widening gap between the rich and the poor, and there must be a government solution to the growing income inequality.
But one thing we’re never told is how much taxes the top one percent already pay. If we were informed daily as to how much taxes the richest members of society pay then wouldn’t there be an agreement that the rich already pay their fair share? Perhaps, but it’s doubtful. The people want to extract more, they want to elect politicians to steal more on their behalf.
According to numbers from the Internal Revenue Service (IRS) via the Tax Foundation, the top one percent pay nearly as much as the bottom 95 percent of Americans. The data suggest that the top one percent dole out just under 38 percent to cover all federal income taxes ($465 billion), while the bottom 95 percent pay 41.45 percent of taxes ($510 billion).
Here is what Mark Perry for the American Enterprise Institute writes:
We can thank the top 1% of US taxpayers for paying almost as much in federal income taxes in 2013 (most recent year available, see Tax Foundation data here) as the entire bottom 95% of taxpayers. By the numbers, the 1.38 million taxpayers in the top 1% earned 19% of total income in 2013 (about $1.7 trillion of $9 trillion total) and paid nearly 38% (about $465 billion) of the total federal income taxes collected (roughly $1.2 trillion). In contrast, the nearly 137 million taxpayers in the bottom 95% earned 65.6% of the total income (about $6 trillion of $9 trillion total) and paid 41.45% of the total federal income taxes collected ($510 billion). Thanks to the “Top 1%” for paying what could be considered to be more than their “fair share” of federal income taxes paid in 2013!
The next time some college kid who just came back from his gender studies class demands the billionaires to pay more then show him this chart:
People want to rid the country of the one percent. But who will pay for all of their goodies?
Because of the narrow definition of ‘income’ – these numbers are misleading. If you look at total ‘Wealth’ – Top 5% of population owns 62% of the nation’s wealth, with the net wealth of many being negative because of debt. The capital gains on this (often inherited) wealth is often not considered in ‘income’ numbers stated.
So if Warren Buffet has an economic income of $3 billion (untaxed capital gains) but taxible income of just $30 million the data reports only a tiny fraction of the income of the 1%. It is further distorted by failing to report the percent of payroll taxes paid by the 1%.
Better tax reform would eliminate job killing payroll taxes and allow all taxpayers to choose a rate between 8% and 28% that would be paired with a net wealth tax of 2% gradually reducing to zero for the top rate. Each taxpayer could maintain up to $500,000 in tax free savings for retirement, education or health care. The charitable deduction would be limited to charities that provide some transitional jobs to those in need. Wealth taxes paid could be used to offset estate taxes so even the very wealthy would want to pay some wealth taxes as an inexpensive form of life insurance. Business tax reform would require nothing more than a 4% VAT and 8% C corporation income tax.
Imagine fair tax reform where all taxpayers have the same choice, modest family wealth is encouraged and the wealthy pay the same rates as the poor.
Fair tax is never going to happen, it would keep companies like GE from paying ZERO tax on 4 billion in profits. The Corporations have bought the government and they will never allow a fair tax to become law. Anything that would really help the middle class will never become law.
What’s more comical is how those who engage this popular argument don’t think through their core argument thoroughly eniugh to realized it makes no real supportively credible point. Much less befitting the marture, adult tone as much is supposed to address. Perhaps Mr. Moran needs an adult level reality upgrade.
of course the top 1% pay more in taxes they have so much more income that is subjected to tax. Ask any of those 1%ers if they want to live on $19,644, like my wife and I did in 2015, I bet they would say hell no. It is a stupid argument, for sure.
Somewhere behind closed doors someone let on that only little melting snowflakes pay taxes. Now even the bigger flakes are melting.