Tax Day

It’s tax day, April 15th. I’m just returning from the post office where I mailed my tax return along with a rather large check to help our government operate. Given that, it’s worth spending a few moments pondering tax fairness, political rhetoric, and the direction our government takes as a consequence. The presidential contenders, aided and abetted by a MSM that refuses to consider context or present facts that belie their most beloved narrative, suggest that “the rich” don’t pay their “fair share” of the nation’s tax burden.

Steven Malanga comments:

One of the most persistent themes in this presidential campaign is that the rich are not only getting richer, but that they are also not paying their fair share of taxes, mostly because of tax cuts that favor the wealthy. We hear this not only from the Democratic candidates, but from the media, and even from some of the rich themselves.

Last week, for instance, the Economic Scene column in The New York Times informed us that our tax code has become more favorable to high income workers--the big winners in the last boom, the column added--and asked rhetorically, “That doesn’t make sense, does it?” Meanwhile, Sen. Hillary Clinton has decried “reckless tax cuts for the rich,” which she says are adding to the middle class tax burden. Then of course there’s high financier Warren Buffett, who declared last year that taxes were too low on the wealthy. To prove it he’d done a survey in his own office and found that his tax rate was below that of many of his employees.

Reading all of this after having filed your taxes, you probably imagine that the rich are doing a nifty job of avoiding theirs, and that it’s an overburdened middle class that is mostly supporting America’s government—from the war in Iraq to our many domestic programs. And you’d be wrong. As Internal Revenue Service data demonstrate, the rich are getting wealthier, but they are also paying a steadily increasing share of the federal tax burden. Over 25 years, in fact, the percentage of the federal income tax bill paid by the wealthiest Americans has doubled, even as it has shrunk for all others. We are rapidly becoming a society in which a very few pay the greatest part of the cost of government, and everyone else enjoys the benefits. And many people, from our Democratic presidential candidates to members of Congress, want to make it even more so.

IRS data indicate that the top 1 percent of taxpayers pay 40 percent—closing in on half—of all taxes collected from individuals. And by the way, that’s up from only 19 percent during the last year of Jimmy Carter’s star-crossed presidency. And if you consider the top 10 percent of all taxpayers, the number skyrockets to 70 percent. That’s right, 1 in 10 taxpayers pay $70 out of the $100 collected in taxes. The bottom 50 percent of taxpayers pay just 3 percent of all taxes collected.

Those of us in the top 10 percent might grumble a bit, but we pay our taxes without great protest, recognizing that for all the waste, abuse, and dishonesty, many government programs and services are necessary. What offends us, quite frankly, is to listen to Hillary and Barack suggest that we’re somehow not paying our fair share. Making that statement is dishonest, and represents class warfare at it’s worst.

The problem with a country in which only a few pay the preponderance of taxes is that those who don’t, really don’t care much about how the government operates. They’re not paying, therefore, why should they? Malanga decries “corruption, pork barrel spending, and government inefficiencies” and then continues the discussion:

Yet little changes in the government…, much to the amazement of outsiders, who often wonder why voters continue to stand for it. The answer, I tell them, is that a very small percentage of voters are paying for this waste, mismanagement and bloat. The rest pay so little that they don’t really care, or they benefit from bloated government, either through jobs in the oversized public sectors, or as users of services.

And remember, Social Security and Medicare are moving toward bankruptcy and the Democratic contenders want to save these entitlements and implement “free” medical coverage for all. Laudable goals no doubt, but someone’s going to have to pay. Guess who?

The problem for those of you who are class warriors is that “the rich” are not a bottomless source of revenue. At some point, their pockets will be empty. But the 90 percent who paid relatively little for all of the unnecessary programs and services paid for by the top 10 percent will still want them. Someone else will have to pay. Now, guess who that might be?