The Constitution was made to guard the people against the dangers of good intentions." --American Statesman Daniel Webster (1782-1852)

Wednesday, October 5, 2011

Using a picture to explain tax rates to your liberal friends

 Using a picture to explain tax rates to your liberal friends


Democrats have convinced themselves that there is no other way to tackle our debt/deficit crisis other than raising taxes.  Those recommendations by Obama’s own deficit commission – cutting spending and entitlement reform – apparently are not considered credible in the eyes of Democrats.  But the panel’s recommendations on tax increases, now that part MUST be credible.  And don’t even THINK about proposing the idea of growing our economy as a way to help shore up our fiscal problems.  They don’t know how to do that.  But let’s stay with this idea for a moment that taxing the rich is the only way to get our fiscal house in order.  To debunk this theory, we go to this column by Walter Williams:Tax the Rich? Good luck with that.  I’ve given you these statistics before, but they continue to be poignant in this discussion on taxing the rich.
If Congress imposed a 100% tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days, but there's a problem because there are 224 more days left in the year.
How about corporate profits to fill the gap? Fortune 500 companies earn nearly $400 billion in profits … Taking corporate profits would keep the government running for another 40 days, but that along with confiscating all income above $250,000 would only get us to the end of June. Congress must search elsewhere.
According to the Forbes 400, America has 400 billionaires with a combined net worth of $1.3 trillion. Congress could confiscate their stocks and bonds, and force them to sell their businesses, yachts, airplanes, mansions and jewelry. The problem is that after fleecing the rich of their income and net worth, and the Fortune 500 corporations of their profits, it would only get us to mid-August.
These figures, folks, are just to keep our government running .. we aren’t even talking about getting our fiscal house in order!  Now, let’s try and dissect a little more prog-logic.  Shall we?  More from this column by Ron Klain:
The single largest revenue item -- allowing the Bush-era tax cuts for the highest-income taxpayers to expire as scheduled at the end of next year -- could be devoted to several purposes. For example, a large portion could be applied directly to paying down the debt. In other words, easing the future burden on our children, not expanded government spending.
First of all, the Bush tax cuts for the wealthy would net about $800 billion.  Our debt is $14 trillion.  And how are we to trust that this money would even go to paying down the debt and not growing the size of government?  But let’s move on to something even more important.  Klain writes, “easing the future burden on our children, not expanded government spending.”  Government spending?  This prog seems to assume that allowing you to keep more of your money is “government spending.”  This implies that all money belongs to government, and it only allows you to keep a certain amount.  This, folks, is a frightening way to view wealth.  Isn’t it any wonder that these progs think we need to share the wealth?  OK .. one more from Ron Klain:
Here’s the bottom line: Tying tax increases to dedicated and popular uses insulates proposals for much-need revenue from attacks of “class warfare” or general anti-tax sentiment, and can help rebuild faith that marginal dollars collected by the government will be put to a clear and important public purpose.
So now, according to the progressives/liberal/democrat types it is OK to seize wealth from people who earned it so long as it is dedicated to “popular uses.”  Majority rules versus minority rights.  I don’t know about you, but the idea of the tyranny of the majority – democracy – scares the tar out of me.  And this is a prime example as to why.  It is mob rule, the majority forcing their will on the minority.  That is why founders had such a dim view of democracy, they knew what it had done to the Athenian republic over 2000 years ago.  A Constitutional republic protects the rights of the minority and the individual.  I like to use the analogy that democracy is 3 wolves and 1 sheep voting on dinner whereas a constitutional republic the sheep are armed.



In Pictures: How Much the Top Earners Already Pay in Taxes

America has heard a lot of talk about the “Buffett Rule” — President Barack Obama’s plan to make the tax code more “fair” by permanently raising taxes by $1.5 trillion over 10 years, with most of the burden falling on families and businesses earning more than $250,000 per year. But if he wants to talk about “fairness,” he should look at how much top income earners already pay in taxes, as the chart below shows:

In a new paper, Heritage’s Curtis Dubay explains that the supposed “fairness” of the new rule is anything but fair:
To President Obama, it is “fair” to raise taxes on families and businesses earning more than $250,000 a year by raising their income tax rates and limiting their deductions. That must also mean he believes that they currently pay too little in taxes.
Yet the data show the highest-earning families and businesses already pay the lion’s share of the federal income tax burden. According to the IRS, the top 1 percent of income earners—those earning more than $380,000 in 2008—paid more than 38 percent of all federal income taxes while earning 20 percent of all income. The top 10 percent ($114,000 and above) earned 45 percent of income and paid 70 percent of all taxes. At the same time, the bottom 50 percent of income earners—those earning less than $33,000—earned 13 percent of all income and paid less than 3 percent of federal income taxes.
Read more of Dubay’s paper, “The Buffett Rule: Fair to No One,” at Heritage.org.

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