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More Taxes From the Rich!
Should the Rich Pay More Taxes?
The battle lines are drawn in Congress and the debate rages on whether the Bush-tax cut on the wealthiest Americans should be extended. There is much rhetoric on both sides of the aisle. The Republicans are arguing for continuity and stability which they say will bring economic certainty and progress. Conversely, the Democrats are saying that the rich should pay more taxes, because it is the right thing to do.
I thought it would be interesting to let you in on some facts and then you can decide how this debate should end. In the latest numbers from the Congressional Budget Office (CBO), the amount of taxes paid by Americans is as follows:
1. The top 1% of income earners pay 37% of all federal taxes;
2. The top 5% of income earners pay 60% of all federal taxes;
3. The top 10% of income earners pay 70% of all federal taxes; and,
4. 90% of Americans pay 30% of all federal taxes.
One other way that the numbers break down is that the top 50% of Americans pay 97% of all taxes, while the bottom 50% pay 3%. 50% of Americans, about 150 million people, contribute 3% to government coffers. Check your last tax return statement (Form 1040) and look how much taxes you paid. The fact is that many of us get so many deductions and credits - child tax credit, earned income credit, dependent care deduction, mortgage interest deduction, education deduction, real estate tax deduction, charitable giving deduction, etc., that our final rate is really low. In fact, many people pay nothing at all. They may pay during the year, but they get that back and even more from the many credits and deductions.
Here is another figure that should make some people mad. Between 2001 and 2007, the number of rich people increased and so did the size of their wealth. It is said that due to breaks like lower capital gains tax and reduced tax on dividends, wealthy Americans had more money and therefore invested more. Consequently, their wealth increased. However, the CBO's report also added that as a result of the wealthy's increased fortunes, their tax contribution also increased. Interesting!
As I listen to the debate, what I found quite interesting is that people are not giving all the facts. Each side seeks to paint the other as the bad guys. Well, I guess that is politics. Get the facts for yourself. Visit CBO.gov and get the numbers.
Here are some facts about "rich" people. Most of them get their wealth through hard work and, many of them invest their money so that businesses can expand and work. This means that poorer guys get hired.
One final note: no one wants to pay more taxes. Many of those who say that the rich should pay more taxes, will one day be "rich." I wonder what their mantra will be then. Probably, "Let the richer pay more taxes!"