Tuesday, April 24, 2012

Fair Share?

I'm sure you have all heard the term "pay their fair share" in the news for quite a while now?  You also know that the "wealthy" and "successful" almost always coincide with the above statement.  The first question that must be asked following this statement is: What is their fair share? 30%? 40%? 50%?  How about 70%?  Maybe 90%?  I'm not sure if you've noticed, but there never is a percentage spoken of when they are talking about the rich paying their fair share.  They only say that the rich need to pay more.  My next question is: Why?  Why do the rich need to pay more?  Right now the top marginal tax rate is 35%.  Is that not enough?  I know that not very many pay that rate.  Normally a rich persons income tax rate is in the 20 percentile range.  Income from dividends and capital gains (investments) is 15%.  Still, why should that rise?  I think the top rate is too high to be honest, but I guess that might just be me. 

Why is punishing success so popular?  When did this country decide that to be successful you must be an evil person.  You must have got successful off the backs of others, you must have cheated, lied, or stolen to get there.  There is no congratulations any more for success.  No one is encouraged to look up to a successful person and try to find out how they did it so you can be successful too.  We are being taught that success is bad and must be discouraged because it is not fair.  (There is nothing wrong with success.  It should always be encouraged.)  This goes along with the idea that the rich need to pay their fair share and why the government, especially progressives and liberals, want to institute punitive taxes like we used to have from the 1940's until Regan got into office.  What these progressives and libs. conveniently forget is that higher taxes mean lower tax receipts into the government coffers.  All higher taxes do is make these feel good politicians feel good about themselves, while the economy stalls and starts going backwards as people are able to keep less and less of their money so their incentive to work hard stalls out as well.  If taxes are kept low, tax receipts into the government coffers get higher.  The main reason for this is that the more money a person is able to keep that they make, the more they are going to work.  As a business, if you get to keep more of your money instead of paying it out in taxes, you will probably higher more people, which in turn creates more taxpayers.  More companies are created as a result of lower taxes as well, again, more tax payers.

This has been proven time and time again.  Calvin Coolidge and Andrew Mellon proved this concept in the 1920's.  JFK proved this concept in the 1960's and Ronald Reagan proved it in the 1980's.  Each cut taxes significantly, (not just a few percentage points,) and tax receipts grew as did the economy.  Now, granted this should go hand in hand with spending cuts by the government, which Coolidge did.  However, that rarely happens.  Although Reagan constantly harassed congress to cut spending, they never obliged.  Had they done so, Reagan would have run surpluses while in office instead of deficits.

I would like to finish this off with one more thought.  If we expect everyone to pay their fair share as many politicians point out.   (Sometimes the insert 'everyone' where they usually put 'rich'.)  They why is it that almost 50% of tax payers in this country pay absolutely zero income taxes.  Many of them receive refunds in excess of what their tax would have been.  How is this fair?