Every Dime You’ve Got - LewRockwell

Every Dime You’ve Got - LewRockwell



Presidential hopefuls Hillary Clinton and Sen. Bernie Sanders, along
with President Obama, say they want high-income earners, otherwise known
as the rich, to pay their fair share of income taxes. None of these
people, as well as the uninformed in the media and our campus
intellectual elites, will say precisely what is the “fair share” of
taxes. That is because they would look ignorant and silly, so they stick
with simply saying that the rich should pay more. Let’s you and I take a
peek at who pays what in federal income taxes.


The following represents 2012 income tax data recently released by
the Internal Revenue Service, compiled by the Tax Foundation (http://tinyurl.com/j5yr8cd).
The top 1 percent, 1.37 million taxpayers earning $434,682 and more,
paid 38 percent of all federal income taxes. The top 5 percent, those
earning $175,817 and more, paid 59 percent. The top 10 percent of income
earners, those earning $125,195 and up, paid 70 percent of all federal
income taxes. The top 25 percent, those earning $73,354 and up, paid 86
percent. The bottom 50 percent, people earning $36,055 and less, paid a
little less than 3 percent of federal income taxes. According to
estimates by the Tax Policy Center, slightly over 45 percent of American households have no federal income tax liability.


With this information in hand, you might ask the next person who says
the rich do not pay their fair share of taxes: Exactly what percentage
of total federal income taxes should the 1-percenters pay? I seriously
doubt whether you will get any kind of coherent answer. By the way,
since 1-percenter income starts at $435,000, it might be pointed out
that $400,000 or $500,000 a year is not even a yacht or Learjet money.
Plus, if one has two kids in college, a big mortgage and car payments, I
doubt he would declare himself rich.


Our demagogues also claim that corporations do not pay their fair
share of taxes. The fact of the matter, which even leftist economists
understand but might not publicly admit, is corporations do not pay
taxes. An important subject area in economics, called tax incidence,
says the entity upon whom a tax is levied does not necessarily bear the
full burden of the tax. Some of the tax burdens can be shifted to
another party. If a tax is levied on a corporation, and if the
corporation hopes to survive, it will have one of three responses to
that tax or some combination thereof. It will raise the price of its
product, lower dividends or lay off workers. In each case, a
flesh-and-blood person is made worse off. The important point is that a
corporation is a legal fiction and as such does not pay taxes. As it
turns out, corporations are merely tax collectors for the government.