Saturday, July 11, 2009
Tax the Rich
As an ever more voiced result of class envy (distinct from the Marxian class struggle) we hear that the solution to our government's severe tax revenue problems is to raise the tax rates on the rich even higher. There was a time in England that the top rate was a confiscatory 95%, as memorialized in the mid-career song Taxman: "Let me tell you how it will be/ There's one for you, nineteen for me." During Kennedy's administration the top income tax bracket was just a smidgen over 90%, which the Camelot President helped lower to 70%. Reagan lowered the top rate to 28% and then Clinton jacked it up again to 36% George Bush younger lowered it again to 35%, but that rate is history next year. Yet President Obama talks about tax rate hikes for the rich (top 5%) and lately tax cheat Rep. Charlie Rangel (D-Harlem) is talking about funding the government's stealth takeover of health insurance by taxing the rich even more.
I look on income taxes as the "rent" for living is such a great country. I don't eagerly pay them, but I am perfectly willing to pay my fair share, which recently was in the second tier of top rates and will migrate up due to my fortuitous marriage (economically speaking of course, there is no money value you can place on true, deep and abiding love).
Of course the rich will pay more taxes on their income because the percentage taxed on higher incomes is of course higher. But that there is a tier system, with higher income earners paying not just more, but more at a higher rate, is a moral sink hole. There is no logical justification other than there is more there for the government to confiscate. Certainly the idea that the rich take more governmental services is demonstrably wrong. The rich rarely cash an unemployment or welfare check. They are less involved than the poor in the various governmental services and systems, such as the criminal justice system. They are net tax givers; yet the Democratic elite want them to give involuntarily even more. Moral bankruptcy is a kind way to describe that so called thinking.
A flat rate, which motherfraking Russia has, Russia!, is the fair way to go of course (since a consumption tax seems unachievable) because everyone pays rent at the same percentage of his or her income. If we were to cut the corporate taxes to half or more and go to a 15% flat rate with few deductions, we would soon lead the world out of the doldrums of our current recession. Everyone is willing to work harder if he or she gets to keep the overwhelming bulk of the fruits of their labor.
As it is now, the top 1% pays about 40% of federal income tax; the top 5% pays about 60% and the top 10% pay about 70%. Yet our demagogic leaders say that's not good enough; that's not paying their fair share. The lowest half of the income earners pay a whopping 3% of federal income taxes. Yeah, that seems fair.
The down side of confiscating the rich citizens' income is that they will quit, go 'Galt', shelter their income or leave the country with the corresponding bad economic effect that will have on the area they once inhabited.
Tax the rich even more. An idea whose time has passed logically and morally, yet which seems all the more popular now. More's the pity
I look on income taxes as the "rent" for living is such a great country. I don't eagerly pay them, but I am perfectly willing to pay my fair share, which recently was in the second tier of top rates and will migrate up due to my fortuitous marriage (economically speaking of course, there is no money value you can place on true, deep and abiding love).
Of course the rich will pay more taxes on their income because the percentage taxed on higher incomes is of course higher. But that there is a tier system, with higher income earners paying not just more, but more at a higher rate, is a moral sink hole. There is no logical justification other than there is more there for the government to confiscate. Certainly the idea that the rich take more governmental services is demonstrably wrong. The rich rarely cash an unemployment or welfare check. They are less involved than the poor in the various governmental services and systems, such as the criminal justice system. They are net tax givers; yet the Democratic elite want them to give involuntarily even more. Moral bankruptcy is a kind way to describe that so called thinking.
A flat rate, which motherfraking Russia has, Russia!, is the fair way to go of course (since a consumption tax seems unachievable) because everyone pays rent at the same percentage of his or her income. If we were to cut the corporate taxes to half or more and go to a 15% flat rate with few deductions, we would soon lead the world out of the doldrums of our current recession. Everyone is willing to work harder if he or she gets to keep the overwhelming bulk of the fruits of their labor.
As it is now, the top 1% pays about 40% of federal income tax; the top 5% pays about 60% and the top 10% pay about 70%. Yet our demagogic leaders say that's not good enough; that's not paying their fair share. The lowest half of the income earners pay a whopping 3% of federal income taxes. Yeah, that seems fair.
The down side of confiscating the rich citizens' income is that they will quit, go 'Galt', shelter their income or leave the country with the corresponding bad economic effect that will have on the area they once inhabited.
Tax the rich even more. An idea whose time has passed logically and morally, yet which seems all the more popular now. More's the pity
Labels: progressive taxation
# posted by Roger Fraley @ 1:11 PM 
Comments:
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The problem with a flat income tax is that 15% of, say, $40,000 is a hell of a lot more painful than 15% of $100,000 or higher. The only way a flat tax on income would work without really hurting the people with the lowest incomes is if the tax didn't kick in until a living salary was earned (again say $40K per year). Then, it would also make sense to impose income taxes stepwise, with folks making between $40 and $60K paying 5% with no deductions, etc. up to a flat rate of 15% for around $500K-plus.
To ensure that people exempt from income tax paid something to the feds, you could impose a very low federal consumption tax (e.g., 1%) on nonmedical and nonstaple food purchases.
To ensure that people exempt from income tax paid something to the feds, you could impose a very low federal consumption tax (e.g., 1%) on nonmedical and nonstaple food purchases.
I want to include everyone so that most people do care what the tax rates are. But I like your idea of a very low consumption tax after exempting to a large but not complete degree the working poor. Thanks, Ed. T, I see some dictionaries have thrown in the towel and have a second meaning of fortuitous which is the same as fortunate, because so many, like myself, make the mistake. Glad to have been corrected, old friend.
I'm not going to argue with you, much. One thing you should know about these eastern european countries is that you pay health and social insurance based on income. So in the U.S. you pay a lot less for health care if you are rich than you would in Russia.
Keep that in mind.
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Keep that in mind.
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