Taxing the Wealthy?

One interesting aspect of politics is that it is completely fungible. Depending on one’s perspective a political stance can basically mean anything and it doesn’t seem to be something that is always consistent with an accepted line of thinking.

In a recent with a conversation with a friend whom I had assumed was mostly conservative we talked about an issues that is in the forefront in regard to this fall’s election, the tax cuts enacted under President Bush in 2001 and 2003 that are set to expire next year.

In the context of this conversation I learned that my friend, who I thought was mostly conservative, is an advocate of tax increases and more specifically an advocate of raising taxes on “the wealthy”. I was appalled because that position is something that I will never support. Every time that I hear politicians rant against “the rich” not paying their “fair share” I am instantly turned off. I am not wealthy and if anyone commits tax fraud I believe that they are certainly not paying their fair share by literal definition.

My friend’s position is that because there are so many obligations of government, benefits and services, taxes must go up and that because “the wealthy” make so much they would not miss it so they should be taxed more. And with that my friend whom I had assumed was mostly conservative changed to my friend who apparently is an advocate of big government.

Assuredly there is some validity in the first part of that argument, as government grows it costs more and as a result the money to pay for it must come from the taxpayer. That is how government makes money. Personally I disagree with that because I do not believe that every “benefit” of government is necessary and that the solution lies in a drastic reduction in spending. See, fungible, depending on one’s viewpoint.

The second part of the statement was the one that I found the most appalling. Anyone who honestly believes that “the wealthy” don’t pay their fair share is in acute need of study. In this country we have something called a “progressive” tax code that is comprised of six tax brackets. Using the brackets the higher a person’s income, the more taxes are paid on each ascending level. At the top of the bracket the earner pays each bracket on each slice of income and from the top up to the rest of their income is assigned the highest percentage.

An analysis of tax receipts shows that the top 1% of income earners pay 40.4% of taxes collected while earning 22.8% of income on an average income of about $410k. The top 10% of income earners on average make $113k making 48.05% of income and pay 71.22% of taxes.

10% of income earners is a minority of citizens in our country and because they are earners are not likely to get any “benefits” from the government outside of paved roads, sidewalks and the common defense, what the government should be providing. The bottom 50% of earners contribute less than 3% of taxes and along with the people who do not pay any taxes basically have a majority voting block on the other 97% of tax revenue, voting themselves “benefits”.

This condition is a form of tyranny. On emotion alone it can be argued that this view is cruel or reflexively anti poor. This argument and how it is arrived to is the problem. Too many people make decisions made on emotion alone and doing so discounts reality leading to the countless problems that come from big government picking winners and losers and making too many citizens into dependents. It robs the freedom of people and it has an ill effect on many communities where too many people never have a chance because they are conditioned to believe that the role of government is to provide everything and when the government provides everything it only provides just enough and there can be no success.

There should be a limit to what government can take from its citizens and there must be accountability from those citizens to hold government to that promise. The low wage earner should strive to earn more as they gain experience and not be jealous of those that earn more and not making claims on the earnings of others. The pursuit of happiness is a core founding principle of our country. Over taxation and pitting us citizens against each other on the basis of income robs us of that pursuit.