On 1/10/2014 12:05 PM, jim wrote:
>
>
> prime cut wrote:
>>
>> On 1/10/2014 11:51 AM, jim wrote:
>>> you still have individual income taxpayers
>>> paying for around 40% of what is left of federal spending.
>>
>>
http://money.cnn.com/2013/03/12/news/economy/rich-taxes/
>>
>> Put down your pitchforks. The wealthiest 10% pay a big majority of
>> federal income taxes.
>
> So what?
Drop dead.
http://www.thenewamerican.com/usnews/constitution/item/17186-cbo-report-the-rich-pay-most-of-the-taxes-the-poor-get-checks
Jane Wells, a business news reporter for CNBC, after reviewing the
latest report from the Congressional Budget Office (CBO) on who pays
income taxes in America, claimed that the rich pay them all. The CBO,
wrote Wells, showed that the top 20 percent pay nearly 93 percent of all
income taxes, while the top 40 percent pay 106 percent of them.
How is that possible? The bottom fifth of wage earners get more from the
government than they pay in taxes. Hence, the anomaly of the so-called
rich paying more than 100 percent of all income taxes received by the
government.
The CBO�s math is straightforward: For the year 2010, the bottom fifth
earned �market income� � wages, business income, capital gains,
retirement income, and so on � of $8,100 per person. But they also
received �government transfers� � cash payments and in-kind benefits
such as SNAP � of $22,700, leaving them with a per-person after-tax
income of $30,800. Each person�s income tax liability in that group?
Exactly zero.
For the second lowest quintile, the numbers for 2010 were similar:
income of $30,700 per person, government transfers of $15,200 with
income taxes paid of $2,500 per person, leaving them with an after-tax
income of $43,400.
This government largess must be paid for in some way, and it�s the
remaining three-fifths of Americans who do the paying, especially the
top fifth. Says the CBO, the average wage earner in the top 20 percent
of all wage earners had an income in 2010 of $234,000, received
government benefits of $6,500 and paid taxes of $58,900, leaving each
with an after-tax income of $181,900.
Concluded Wells:
People who make more should pay more, generally speaking. In America,
they are.�
When it comes to individual income taxes, they�re also covering the
entire bill. And leaving a tip....
Fair or not, I will let you be the judge.
Josh Barro, the politics editor at Business Insider, picked a nit with
her but not about whether such taxation is �fair� but over her � and the
CBO�s � analysis and conclusion: There are many other taxes aside from
income taxes that every sentient soul in the country pays, whether they
know it or not. There are payroll taxes, state income taxes, sales
taxes, property taxes, and excise taxes. There are taxes buried in the
cost of gasoline, and in manufactured goods reflecting corporate income
taxes. There are employer-paid payroll taxes that properly should be
ascribed to the individual wage earner. And so on.
Said Barro, �The federal personal income tax only made up 28% of all
U.S. government tax collections in 2012. Federal, state and local
government collected $4 trillion in taxes last year, just $1.1 trillion
of that [coming from] federal personal income taxes.� He concluded:
Rich people do pay a lot more taxes than poor people, both in absolute
terms and as a percentage of [their] income. But the rich are not paying
all the taxes.
Barro neatly avoids any discussion, however, of just how �fair� these
taxes are, or should be.
There are many ways to argue for or against the amount people pay in
taxes. One way is to assume that government should take everything it
can get � to be put to good use by the government � as long as the taxes
by the government aren't so high that they discourage people from
earning money or paying taxes. If one were determined to extract the
maximum government revenue from an economic system, he could employ the
Laffer Curve, which shows that the maximum revenue to be extracted
approaches some 70 percent of income. If it were higher than that, the
incentive to produce more would diminish and revenues would go down. If
it were lower, the government would be leaving revenues on the table for
its original owners to spend as they wished.
Then there is the �sovereign citizen� argument that says that any
extraction above zero represents �involuntary servitude� as explained by
libertarian philosopher and economist Murray Rothbard:
In a sense, the entire system of taxation is a form of involuntary
servitude. Take, in particular, the income tax. The high levels of
income tax mean that all of us work a large part of the year � several
months � for nothing for Uncle Sam before being allowed to enjoy our
incomes on the market.
Part of the essence of slavery, after all, is forced work for someone at
little or no pay. But the income tax means that we sweat and earn
income, only to see the government extract a large chunk of it by
coercion for its own purposes. What is this but forced labor at no pay?
There is the moral argument that the income tax system violates at least
two of the 10 Commandments � thou shalt to steal and thou shall not
covet � and three of the Seven Deadly Sins � Greed, Sloth, and Envy.
There is another response to the unanswered question, however, drawn
from Article I Section 8 of the U.S. Constitution � the enumerated
powers given to the national government. Prior to the ratification of
the 16th Amendment, the national government ran itself on tariffs and
excise taxes, at a vastly lower cost. One thing is certain, according to
Ron Paul:
The Founding Fathers never intended a nation where citizens would pay
nearly half of everything they earn to the government.
Nor did the Founders contemplate such a system of taxation. As Dr.
Adrian Rogers, pastor emeritus of Bellevue Baptist Church, wrote,
What one person receives without working for[,] another person must work
for without receiving. The government cannot give to anybody anything
that the government does not first take from somebody else.
When half of the people get the idea that they do not have to work
because the other half is going to take care of them and when the other
half gets the idea that it does no good to work because somebody else is
going to get what they work for, that, my dear friend, is the beginning
of the end of any nation.
A graduate of Cornell University and a former investment advisor, Bob is
a regular contributor to The New American magazine and blogs frequently
at
www.LightFromTheRight.com, primarily on economics and politics. He
can be reached at
bade...@thenewamerican.com.