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They Keep Saying The Rich Don't Pay Their Fair Share

Guest post by: Michael Hume

Article Overview: These are facts: the top one percent of wage earners in America carry a full 40% of the tax burden. That's only about 1.4 million of us, carrying 40% of the load for the other approximately 300 million. And if the tax rates go back to pre-2001 levels, those 1.4 million who have all that money to invest (and with which to employ vast numbers of other wage earners) will certainly keep that money in their pockets... and that means it'll be sheltered from taxation.

They Keep Saying The Rich Don't Pay Their Fair Share

... But If You Want More From Them, Cut Their Taxes I recently heard a debate on talk radio about taxes. The debaters (and callers) were discussing the explosion of government spending in America (particularly on entitlement programs), the impending expiration of what are known as the "Bush Tax Cuts" enacted in 2001 and 2003 by former president Bush and Congress, and a current opinion piece in the mainstream media by a progressive pundit who continues to howl (along with other progressives in the federal government) that the rich don't pay their fair share of taxes in this country.

Hmm.

These are facts: the top one percent of wage earners in America carry a full 40% of the tax burden. That's only about 1.4 million of us, carrying 40% of the load for the other approximately 300 million. And if the tax rates go back to pre-2001 levels, those 1.4 million who have all that money to invest (and with which to employ vast numbers of other wage earners) will certainly keep that money in their pockets... and that means it'll be sheltered from taxation.

President Ronald Reagan faced a far worse economy when he took over in 1981. Inflation was in double digits, unemployment even higher than it is today, and a stock market weak and floundering. And the tax rates were what progressives would've thought were much more fair: the top one percent were only carrying 17% of the total tax burden. Working with Democrats in Congress, Reagan cut the top marginal tax rate from 70% to 28%, and the result was amazing... all that investment money came flooding off the sidelines and into the game, the economy grew, and taxable activity soared in the U.S. As a result, though the RATE of taxation on the rich went down, the TOTAL tax revenue to the government skyrocketed. More people had jobs and were paying income taxes... more investors were investing, and paying capital gains taxes. More people were starting businesses, which is the engine that drives America.

The current government knows this. That's why even some Democrats are starting to whisper this summer about extending those Bush Tax Cuts, despite the president's campaign promise over the last three years to end those "tax cuts for the wealthy." However, the general consensus is that the progressives will prevail, and the tax cuts will be allowed to expire January 1.

If you want more of something, tax it less... if you tax it more, you'll get less of it. That's a hard-and-fast economic rule. So if the government really wants more revenue, they know they'll have to cut taxes for the investor class in America. Therefore, given the plan to allow taxes to go up, an intelligent person is forced to consider the possibility that the current government actually does NOT want more revenue, capital growth, or a healthy economy. One's forced to consider the possibility that those right-wing conspiracy-theory whackos are actually right: a la Cloward and Piven (look 'em up), the current regime would prefer to collapse the system and replace it with something else.

Scary. Hang on to your wallet.

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Article Tags: economic reform, finance reform, government takeover, personal responsibility



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