We've been hearing more and more Democratic rhetoric claiming they're going to make sure “the rich” pay their fair share of income taxes. That's all well and good. But what exactly does “fair share” mean? For that fact, what does “the rich” mean? First, let's take a look at what the rich are paying in income taxes.
...the top 1% of taxpayers, those who earn above $388,806, paid 40% of all income taxes in 2006, the highest share in at least 40 years. The top 10% in income, those earning more than $108,904, paid 71%. Barack Obama says he's going to cut taxes for those at the bottom, but that's also going to be a challenge because Americans with an income below the median paid a record low 2.9% of all income taxes, while the top 50% paid 97.1%. Perhaps he thinks half the country should pay all the taxes to support the other half.
So the top 10% earners pay 71% of all income taxes collected and those making less than the median income level only pay 2.9%. The only way taxes on “the rich” could be increased without having an adverse effect on the economy is to redefine “the rich” as anyone with a job. Or maybe the plan is to create a confiscatory tax plan to soak even more capital out of the economy. That will work, right?
It's been tried in other countries before and all it managed to do was cause a flight of capital and a major downturn in their economies. Just ask the British what their economy was like in the late 70's into the late 80's. Top tax rates were 98% and everyone with money found ways to move it out of the UK in order to prevent the government from confiscating their wealth. The economy collapsed, the jobless rate rose to levels not seen since the Great Depression, factories closed, and countless people were forced onto welfare.
One of the biggest problems I've found most Democrats wishing higher tax rates tend to have is that they believe the myth that wealth is a zero sum condition, that wealth is finite. If someone got richer it must be because someone else became poorer, as if the rich stole it from the poor. That may have been true when wealth was based upon the possession of precious metals and other limited specie. However, those days are long gone. That still doesn't stop them from wanting to “take it back” and return it to the people from whom the rich supposedly stole it.
Wealth is something that can expand to include more and more people, lifting everyone out of poverty. Or it is something that can be taken away by the state, reducing everyone to a state of poverty. (At times I wonder if that's exactly what the Democrats want. If nothing else it gives the government total control over everyone's lives. Their philosophy seems to be that government is the answer to all problems, even the ones that government cause. It's a shame that government is so clueless and stupid, incapable of running anyone's life better than people can run their own. We've seen enough examples of that throughout history.)
In any case, the claim that the rich aren't paying their fair share is correct. I won't disagree with that statement because it's true. That's because the rich are paying more than their fair share. Even the IRS says so. They shouldn't be penalized by being forced to pay even more based upon the ignorance of those in Congress and those seeking even higher office.
Note: I actually wrote this Monday night, saved it, but never posted it. I guess I could blame a mind half-asleep.