January 01, 2008 08:12 pm
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Do you want to be the others to others?
“Richer and richer,” the titled editorial in a recent Kokomo Tribune, hot off the presses of the St. Louis Post-Dispatch, wanted the repeal of Bush’s tax cuts. It is a splendid work of art, the art of class envy. It sounds the clarion call of the Democratic candidates who always want to put their hands deeper into someone else’s pockets.
The editorial states, from the CBO, that the top 1 percent of American wage earners average over $1 million a year. The top 10 percent make over $246,000. Factor in the median or smack-dab middle, and you get $50,000 of annual income, while the bottom 20 percent average only $15,300.
Using numbers from the IRS, here is what the editorial did not tell you. The top 25 percent of American wage earners pays 86 percent of all taxes. Thirty-nine percent of all taxes are paid by the group that averages $1 million, yes that 1 percent.
According to the Wall Street Journal, in 1980 the top rate of taxes was 70 percent, and the richest 1 percent of us paid 19 percent of all taxes. The top tax rate has lowered to 35 percent, but that same 1 percent pays 39 percent of all tax revenue. More then double what was paid 25 years ago. Figure that out.
There are two principles at play here. First is one of the laws of Reagan economics. Reduce the tax rate and you collect more money. Last year, 2005, a record was set for the amount of money the federal government raised through tax revenue, over $25 trillion. And if you look at when the tax cuts went into effect, the tax receipts as a percentage of GDP doubled to 16 percent. It’s almost a law of nature when you let people have more of their money, they earn more. If they earn more, Uncle Sugar gets more.
The other is the old standard of liberals or progressives, if that name is preferred. You and I never have enough money, but somebody above us on the economic ladder does, so make him or her pay more, or better said, let’s take the rich guy’s money; he has enough.
It should not matter if I make $1 million, $10 million or $100 million. We as a nation should be glad those folks are paying 39 percent of what they earn on average. God only asks for 10 percent, and the government is not satisfied with almost four times what God asked the Israelites to pay.
Could the tax rates redistribute the tax expense more fairly? I would love to pay less, but be careful because it truly is a slippery slope when I want to make the guy above me pay more, but the guy below me isn’t allowed to want me to pay more. American households are sending more of their income to Washington, even with the 2001 and 2003 tax cuts. For 2006, the average household paid $20,664, down from $22,647 in 2000, but much higher than $13,017 in 1965. The average American household’s tax burden increased steadily since 1965, rising 20 percent during the Clinton administration. Today’s tax burden remains higher than all administrations except for Clinton’s, even with the recent tax cuts, according to the Heritage Foundation.
The editorial ends with its hidden agenda exposed. “By letting the tax cuts expire and devoting the revenue to helping pay for national health insurance ...” There are many things tax revenue could be used for, but national health insurance is almost the positively last thing I would spend it on. (At least it is better than global warming.) People may need health insurance assistance, but the federal government does not need to get into the health-care business any more than it already is, which is too much. But that is another issue.
So pay attention to this. Hillary, Obama, Edwards and others like them think the government should redistribute your income and mine. They think they know better where it should go, and they are not afraid of dangling a carrot in front of people to try and get their vote. It can be hypnotic at times – the promise of more money in your pocket, but ask where it comes from. And before you say, let the others pay and cut me slack, ask yourself, do you want to become the “others” for someone else?
Mike Moran, Kokomo
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