Election Realities
November 3, 2010
AS THIS election season comes to a close, let’s remember one of the most significant facts about politics in America: a very small number of people pay the bills. As the MoneyHoney Blog wrote earlier this year:
Consider this: the top 1% of Americans pay 40% of federal income taxes, the top 5% pay over 60%… while the bottom 50% pay less than 3%! (Data from the Congressional Budget Office, latest available tax burden release, 2006.)
Half the population is getting something for nothing, and they call this fairness?
As is always the case with expanding welfare states, generous entitlements are paid for by everyone except the actual beneficiaries.
There is nothing fair about redistributing incomes, much less on such a massive scale. There is no fairness in the government penalizing someone for working harder than others. (Not to mention it is unsustainable over a longer term – you will run out of wealthy people to tax.)
Now can you see the fundamental problem here? 40% of American households paid 86% of total federal tax liabilities. However, when it comes to deciding how the government should spend that money, they are outnumbered by the 60% who paid just 14% of taxes.
Is it any wonder that government spending is out of control and the US is coming close to fully adopting European-style socialism? The majority of voters decide on how to use other people’s money – why would they want any spending cuts?
Given these voter statistics, the Tea Party victories are even more significant. It is not just taxes and job loss that have inspired voters this election season but the government takeover of the private sphere that Obamacare represents.
— Comments —
Brittany writes:
The wealthy should pay more taxes because it is not hurting them. Do you think Bill Gates struggle to pay taxes? Madonna? Shaq? or any wealthy individuals? If you can afford a mansion, yacht, and 10 cars then you can afford taxes. If you are struggling with paying bills and feeding your family then you should pay a lot less taxes. The in general is the cause of these struggling people in the first place. Business owners are outsourcing our jobs and hiring illegal immigrants so yes a lot of people are too poor to pay taxes because good jobs are disappearing.
Laura writes:
The wealthy should pay more taxes but they should not have substantial property confiscated without power to say what is done with it. Given their disproportionate numbers, they have very little say and for many voters, government is like a credit card with no payments. They can buy what they want and never receive the bills. This leads to rampant and irresponsible growth in government spending. Should I take my neighbor’s oriental carpets because “it is not hurting” him if I do? Socialism is based on envy and forced charity, which is not charity at all. By the way, we are not only talking about Bill Gates and Madonna but businessmen, doctors, lawyers and others who are in top income brackets but do not make millions. This taxation without representation.
Jim B. writes:
This is a bit of a canard. They way they justify it is to look only at income taxes, and ignore, for example, the extremely regressive payroll taxes that make up the vast majority of most worker’s federal tax bill. And this is to a certain extent “back to the future”: from the time the Income tax was instituted in 1913 until the tax hikes of WWII, less than 3% of american households even filed a return. The reason so few pay the majority of taxes now is the same as it was then: vast income inequality, which has crept up from the “golden age” years from the 40s – 70s (when, incidentally, it was much more financially feasible for middle-class families to survive on a single paycheck) to the current gilded age levels.
But this all brings up an interesting point: does social conservatism imply “fiscal conservatism” (however defined)? Is unrestrained capitalism good for the social values we hold dear? Chesterton
certainly didn’t think so.
And anyway, Federal taxes don’t “pay for” anything, anyway: it’s a bit long to get into now, but an accurate knowledge of how the monetary system works tends to make one throw up ones hands at the rhetoric and plans of both Democrats and Republicans. If you’re interested, here’s a short book that explains things
Warning: being exposed to these ideas for the first time can seem a little bit like going down the rabbit hole. But once you’ve absorbed them, you wonder why you didn’t see it before.
Laura writes:
The concept of Distributism is very appealing, but I struggle to understand how it doesn’t lead to rule by social engineers.
