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The Fiscal Cliff and the Forty Seven Percent

Updated on December 10, 2012

As our economy is hurtling towards disaster once again, there seems to be plenty of people that want to raise taxes but just not on themselves.

Mitt Romney's now infamous quote that 47% were “dependent on government” is not exactly true. Let's be clear. 47% don't pay federal taxes or they receive more money back from taxes then they put in.

A large part of the 47% getting government “handouts” or entitlements are those that receive social security and don't pay federal taxes. Those people I have no problem with. I also don't have a problem for families in that 47% that are in the lowest tax brackets that truly can't afford to pay federal taxes.

What I have trouble comprehending is that almost half the tax payers in the United States can't afford to pay at least $100.00 in federal taxes.

I'm a republican who is open to raising the tax rate on the top wage earners but only if there is a flat tax across the board for everyone.

I want to cite two examples how punishing just the top wage earners have gotten out of hand. The first example is the cash strapped state of California.

Top wage earners in this state could face a marginal income tax rate of just under 52 percent if tax rates rise because of the passage of proposition 30 in November by voters in that states. Proposition 30 effectively already raised the rates of anyone making over $250,000

. Incidentally a $250,000 annual income in the state of California doesn’t go as far as in most states. Over half your income to the government?

If over 50% of your income being taken by the government sounds outrageous consider the next example which takes place outside the United States.

France has now initiated a mind blowing “temporary” 75% tax rate on the top wage earners.

Where will this taxation stop on the wealthy without more revenue from other tax brackets? Is 35% as it stands now enough? Maybe 40%? Not enough? Let's make it 45%.

I don't want to play political games because I see blame on both political parties. That being said, I wonder just how many voters that voted democrat realize that republicans wanted no new taxes on anyone at any tax bracket.

I think that is a tad too unrealistic but so is the democratic push to just tax the wealthy. As I said when I started this article everyone doesn’t mind raising taxes on someone else, just not on themselves.

Personally I believe if the democrats could, they would tax everyone. Of course the republicans can't consider that idea as they are already branded as the party of the rich riding on the backs of the middle class.

An idea of how taxation through a one party democratic power has run amok only needs to look no farther then Chicago. The amount of “special taxes” in the downtown area would make your head spin. Chicago also has boosted the sales tax to 10.25.

USA Today has rated Chicago the most expensive city to do business in the United States. All this while city pensions are underfunded by $26.8 BILLION.

I'm saving the Chicago mess for my next article.

I know I don't have all the answers but I believe the first step would be a flat tax rate. There are those that want to see capital gains taxed at a higher rate. I don't agree with that. They are taxed at a lower rate because if you invest $10,000 dollars in a company and the company goes bust you lose the whole $10,000 of which you can only write off $3,000 in losses against your other income. I base this on the average individual investor.

I see the lower tax rate on capital gains as a reward for investing in the economy and the risk you take in doing so.

I would like to see loopholes closed such as giving tax breaks to oil companies that are making record profits.

Do people realize that we give $65 million in aid to China annually? Of course that is a tiny fraction of our annual budget but why pay this economic powerhouse anything?

I believe there are hundreds, if not thousands, of wasteful expenditures such as these examples which would add up to a significant revenue savings if we can eliminated them.

I also believe that we could drastically reduce our military in Europe. The cold war is long over and I think Europe can defend itself from any threat (and from each other).

The problem is politicians to get elected and to stay elected won't make the hard choices that need to be done. Can we blame them? We the voters are the one's that put them in office after all when they promise of doing more for us without charging us more. I cringe to imagine the state of our economy decades down the road.

Of course I will be 50 next year so I suppose things won't get too bad in my lifetime. I guess I can hand the debt we are creating to my kids and their generation and if they get lucky they can do the same to their kids and the next generation. So come to think of it, why should we even care?


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    • Charles James profile image

      Charles James 5 years ago from Yorkshire, UK

      ExitOnly 14 hours ago from Atlanta, GA

      "Charles, the problem is that it has become "From each according to his means; to each according to his desires." Abilities and needs went out the window ages ago. And "fair" is a totally subjective term."

      Abilities and needs are still with us - and in the same order as Engels chose. "Fair " is subjective but we can still recognise it! And its absence.

    • JON EWALL profile image

      JON EWALL 5 years ago from usa


      The solution is simple, the government should follow the law, PAY-GO. 2/13/10 Pay Go Law

      The President lied?


      USDA moves to end questionable food stamp

      Renewable energy money still going abroad, despite criticism from Congress

      GOVERNMENT WASTE,past 5 years, the Social Security Trust fund has paid $400 billion to dead federal employees.

      The joke is on the American taxpayer.

    • ExitOnly profile image

      ExitOnly 5 years ago from Atlanta, GA

      Charles, the problem is that it has become "From each according to his means; to each according to his desires." Abilities and needs went out the window ages ago. And "fair" is a totally subjective term.

    • Charles James profile image

      Charles James 5 years ago from Yorkshire, UK

      As Engels phrased it "From each according to his ability; to each according to his need"

    • redwhiskeypete profile image

      redwhiskeypete 5 years ago from Indiana

      Thanks James for you comment. I understand that everyone

      here pays sales tax in addition to special taxes such as on tobacco and gas, that is why I made sure I stated Federal taxes not paid.

      Actually, I just lost my job after almost 25 years last week so I will gladly accept a government "handout".

      You may be right about the rich not paying enough but I'm conflicted on that. Many, many wealthy people have a business that folds. Their income could be slashed dramatically and maybe paying over 50% in taxes could contribute to that. Again how much is enough on how much they should pay? I fully understand that many people can't pay taxes but I still believe that there are also many that can at least pay something.

    • Charles James profile image

      Charles James 5 years ago from Yorkshire, UK

      Sales tax is not paid on many purchases. Even people who do not pay income tax pay some sales tax. The working poor pay income tax and sales tax. When figuring what is "fair" you must consider the full tax burden.

      In the UK in the 1950s we got to 102% tax on unearned income and 87% income tax on normal income. We developed a tax evasion and tax avoidance industry.

      The problem in the USA is that the very rich do not pay anything approaching their fair share of taxes.

    • ib radmasters profile image

      ib radmasters 5 years ago from Southern California

      First of all SS and Medicare are TAXES that have been paid by those collecting benefits, and their employers when they were contributing to SS and Medicare.

      These are not handouts, FICA is paid by the wage earner and their employer as long as they earn wages, and that includes wages earned after retirement.

      Second, why aren't tax brackets a violation of the equal protection clause, and a discrimination by the government?

      The Income Tax System is also an invasion of personal privacy for the collection of a tax. Other less invasive forms of taxing could be used by the government.

      The Internal Revenue Code can only effectively be used by the wealthy.

      Does it make sense to change the income tax code every year?

      Instead of always focusing on raising taxes to raise revenues, the government should work as hard to lower the spending. They both work to the same goal.

      Every government employee, and every government agency and department is a tax liability. Start by removing the defined benefits pensions that are guaranteed by the taxpayers. Lower the benefits for the government workers to what it available to the average middle class private sector worker.

      California is a perfect example of the problems caused by the issues mentioned above. California hasn't had a balanced budget this century, or even budgets that are submitted on time.

      The government system is lobsided, and the tax system is the reason, along with the increase in the size and scope of the government.