“You owe me, Rog. Remember?”
—Tom Atkins as Michael Hunsacker in Lethal Weapon
Yesterday President Obama was on his taxpayer-funded campaign bus tour, again calling for “shared” sacrifice. The President says the “wealthy”—whoever that is—should pay more taxes because they’re not paying “their fair share.”
What, exactly, does that mean?
Presumably he will say that “fair share” has to do with those who have more contributing more. Let’s call that for the socialism that it is (“from each according to his ability . . .”—pretty sure that’s Stalin’s 1936 Soviet Constitution).
But how, exactly, is that fair?
· Do the wealthy use more government services? No.
· Do the wealthy consume more government benefits? No.
· Do the wealthy use more public roads? No.
· Does it take more military capital to defend the wealthy? No.
It wasn’t always this way. I seem to remember the American Revolution having had something to do with getting away from unjust taxes. As Jack Nicholson as Colonel Nathan Jessup said in A Few Good Men, “Yes, I’m sure I read that somewhere once.” Indeed, this nation was founded in no small part on the Fathers’ desire to be free from unfair or disproportionate taxes. This concept was embedded in Article I, Section 9 of the Constitution:
No capitation, or other direct, Tax shall be laid unless in proportion to the Census or Enumeration hereinbefore directed to be taken.
In fact, for most of this nation’s history, there has been no income tax at all. It wasn’t until the 16th Amendment eliminated the apportionment requirement in 1913 that way was clear for the taxation of incomes on a graduated basis (i.e., the more you earn, the greater percentage you pay). Graduated income taxation began in earnest in 1930, and has been here ever since.
Amazingly, we had Warren Buffett on Monday joining in the chorus to complain about how he and his “mega-rich friends” have been “coddled” for too long. To that let me say:
Mr. Buffett, put your money where your mouth is.
If the system is that unfair, then I’m challenging you and any of your mega-rich friends you can get to go along to write the check—right here, right now—for however much you think you should have been paying for however far back you think you should go. It’s empty rhetoric for Buffett to echo Obama on this whole unfairness thing when he knows he is under no imminent threat of actually having to pay anything more. If he thought it was unfair, no one forced him to take whatever deductions and write-offs he’s been taking all these years. I’m guessing I’m not gonna get any takers.
But to get to the real issue, while “tax the rich” makes for a nice TV sound bite, it’s a simple bit of arithmetic to see that it doesn’t get you very far towards resolving the country’s debt and spending situation. The fact is you could confiscate Buffett’s entire $56 billion net worth, and it would fund the federal government’s current operations for a grand total of not quite six days. You could confiscate every dime of net worth held by all of the U.S.’s billionaires combined and it would only finance the federal government for about five months, and even then only once—you can’t go to that well a second time. What do we do next year after we’ve fleeced the flock?
It’s no answer to say that the field of the “wealthy” is much broader than just billionaires. According to a report released by the IRS August 3, if you raised the tax rate to 100% and took every dime earned by everyone making $1 million or more, it would only generate about $725 billion, barely a fifth of annual federal spending—not enough to fund the government for even three months, much less make a dent in the $14.5+ trillion federal debt. Even if you dropped your definition of “wealthy” down to those earning $250,000 and taxed all of them at 100%, you would still only net about $1.6 trillion, which is still less than half of what the District spends in a year.
The problem isn’t income, it’s outgo. There simply aren’t enough wealthy to finance spending at its current levels.
That doesn’t stop Obama and his ilk, though, because it’s very easy to sell programs that give people something when someone else has to pay for them—that’s the problem/danger with what satellite radio talk show host Andrew Wilkow calls the “zero-liability voter.” James Madison warned against this very danger in Federalist Paper No. 10:
The apportionment of taxes on the various descriptions of property is an act which seems to require the most exact impartiality; yet there is, perhaps no legislative act in which greater opportunity and temptation are given to a predominant party to trample on the rules of justice. Every shilling with which they overburden the inferior number is a shilling saved to their own pockets.
It is vain to say that enlightened statesmen will be able to adjust these clashing interests and render them all subservient to the public good. Enlightened statesmen will not always be at the helm. (emphasis added)
Clearly, we’ve left the age of enlightenment.
So what is a fair share? According to data compiled by taxfoundation.org, in 2008 the wealthiest 1% of this country paid 38% of total federal income taxes, while receiving only 20% of the nation’s adjusted gross income. The top 5% of wage earners paid 59% of total federal income taxes, but earned only 35% of the nation’s adjusted gross income. The top 10% paid 70% of total federal income taxes, while earning only 45% of the nation’s adjusted gross income. At what point, exactly, have the wealthy in fact paid their “fair share,” Mr. President?
Meanwhile, the bottom 50% of wage earners—those most likely to be drawing from the system—received 13% of the nation’s adjusted gross income, but paid less than 3% of the total income taxes. And as we know, 47% of this country doesn’t pay any income tax at all.
The President told us just prior to his inauguration that “[e]verybody is going to have to have some skin in the game.” But nearly half of us don’t have any skin in the game at all, and yet the President now says many of us who do—those who are already paying in in greater proportion than the percentage they receive—need to put in even more.
What’s fair about that?