Question to Obama: If rich aren't paying their "fair share," then what's fair?

Washington Examiner ^ | 04/20/2011 | Philip Klein

[The_Reader_David]

There is something troubling about the way our side is using statistics in this. If the “top 1%” pay 38% of taxes but have, for argument’s sake 45% of the total aggregate income, then indeed it is reasonable to argue they are “not paying their fair share”. Of course, the other side isn’t trotting out the figures to make that case, so I suspect it’s not true.

Still, the fact that the wealthy are adept at finding and using tax shelters makes such a circumstance conceivable, if one includes tax exempt income in the aggregate income calculation, and even if the “rich” as a group are on any reasonable calculation paying “their fair share”, some, who have gone to the greatest effort to game the tax system, rather than putting their wealth to uses that maximize pre-tax profit and likely are more beneficial to the economy, arguably are not.

The cure is, of course, not to raise the top marginal rate, which harms capital formation, but to curtail tax shelters. I personally do not advocate abolishing any of them, simply limiting the amount of income that can be excluded from taxation by any combination of deductions, tax-exempt sourcing or credits (a credit functionally excludes an amount of income equal to the amount of the credit divided by the top marginal rate). I’d allow unlimited deductions for charitable contributions, as these support the function of civil society in doing things that are better left outside state control, but other than that, I’d limit the amount of income which could be excluded from taxation to $250,000 for individuals, $500,000 for married couples, and $100,000 for those who can be claimed as dependents, with the unused portion of a dependent’s un-taxed allowance transferring to the parent or guardian. I’d abolish the AMT, which was an unnecessarily complicated attempt at this sort of idea.

Curtailing tax-shelters is probably the one and only policy move that can be simultaneously seen as “soaking the rich” while being pro-growth and not punishing achievement: it just forces those who have achieved financial success or inherited wealth to put their capital to more productive use, rather than going to lots of effort to hide if from taxation.

[DB]

You did read the article?

"In 2008, the most recent year for which full data is available, the infamous top 1% – those earning over $380,354 – paid 38.02 percent of federal income taxes, according to an analysis of IRS data by the Tax Foundation."

And

"The top 1 percent, for instance, earned 20 percent of the nation's adjusted gross income in 2008"

Is your answer.

[r-q-tek86]

Ping

[Kellis91789]

“If the “top 1%” pay 38% of taxes but have, for argument’s sake 45% of the total aggregate income, “

Go back and re-read the article. The top 1% do NOT have 45%, but only 20% of the total income.

[DB]

Regarding your "limits"...

The AMT came in to existence by:

The AMT was enacted by the Tax Reform Act of 1969[15] and went into effect in 1970. Treasury Secretary Joseph Barr prompted the enactment action with an announcement that 155 high-income households had not paid a dime of federal income taxes.[16] The households had taken advantage of so many tax benefits and deductions that reduced their tax liabilities to zero.[17] Congress responded by creating an add-on tax on high-income households, equal to 10% of the sum of tax preferences in excess of $30,000 plus the taxpayer’s regular tax liability.[18]

So because congress was unhappy that 155 wealthy people - out of millions - hadn't paid income tax that year they made a special law to target them. And over time that law ensnared millions of regular taxpayers... How long to you think it will be before your plan for hitting the "wealthy" hits everyone else? In 50 years the dollar may be worth zip and an income of $500,000 a year be that of a fast food cook...

Repeatedly those who try to selectively whack the wealthy end up whacking everyone else - in more ways than one.

[Kellis91789]

Why don’t authors of articles like this, so full of good data, mention that the SAME total income tax revenue could be collected with a simple 10% rate on everybody ?

I think there are a lot of people out there that have been mislead into thinking “the rich MUST pay 35% or the system just won’t work !” The simple fact is that the ONLY reason anybody has to pay 35% is so that others can pay ZERO.

[dalereed]

Everyone pays 10% of gross income, no deductions, no credits, no earned income thax credit etc!

Flat 10% of gross of every ones income.

[Georgia Girl 2]

Obama’s tax return.

Line 1.....How much do you make?

Line 2.....Send it in.

[taxcontrol]

Here is a proposal to make the libs head explode. Alter the AMT so that regardless of tax credits or deductions, or any other means of tax calculation, everyone has to pay a minimum amount equal to the lowest tax rate times their gross income without any deductions, credits, exclusions or other tax calculation.

[Kellis91789]

That would be a good modification. It has always bothered me that something called the “Alternative Minimum Tax” did not apply to everyone, but only the “rich”.

The idea that EVERY American should pay a minimum amount to pay for government has merit, but targeting the successful under the guise of everybody paying a “minimum” is just dishonest.

[newzjunkey]

Instead of the 35% bracket they're in, the Obamas paid less than 26%. I saw on another thread, the Bidens paid only 22%.

I guess they'd know first hand the rich did not "pay their fair share" wouldn't they?

[BobP]

Obama’s tax return. Line 1.....How much do you make? Line 2.....Send it in.

--------------------------

Zer0 knows what he is doing, and he is having a great time doing it. The game played by the Marxists is war where the end justifies the means. No matter how it's dressed up, his budget is an assault on America's freedom. We know that's his intent.

The winning rule in 2012: Direct and non-stop political attack on Obama!

Obama:  ''Millionaires don't have a right to keep any of their hard-earned cash.
                I do think at a certain point you've made enough money. It all belongs
                to the government.''

Obama believes economic collapse will make people long for the strong hand of big government.

FDR inherited a government that was puny and weak and enhanced it; Obama took one that was already obese and tried to expand it.

Countdown until Obama leaves Office: 639 days as of April 21, 2011.

[bgill]

Someone ask Obomba how come he took the MORTGAGE deduction on his house....when he isn’t even listed as an owner...and doesn’t pay the taxes.????

Hear, hear!

[bgill]

And he took the deduction for the taxes as well.

Paging Al Capone...

[jonrick46]

"they'll [the Left] often respond that the only reason such a distribution exists is that there's a lot of income inequality in America.

when the rich do what they are supposed to do and reinvest their wealth, they get richer. However, by reinvesting their wealth, they give money to a business needing new capital to grow their business, hire new workers and grow the economy. Why the Left can't understand this is like looking at a dog who wants to chase cars.

[The_Reader_David]

No worries: include in the same legislation a reform of the way the CPI is calculated, back to the old way (so we’d now be showing 10% inflation) and index all dollar-amount caps and brackets in the tax code to inflation defined as the maximum of the CPI, PPI and GDP deflator measures on a quarter-by-quarter basis.

[dforest]

It will only be fair when you go to work to pay all you make to Obama’s voting blocs.

[driftless2]

You’d be amazed (or maybe you wouldn’t) at how ignorant most Americans are concerning who pays taxes. Many of my Dem friends are firmly convinced that the rich don’t pay any taxes. When I recited the one percent paying close to forty percent of all income taxes to a Dem friend of mine, he refused to believe it. I’ll assume most libs and Dems are as ignorant as my friend.

[Kellis91789]

Remember that the “bracket” you are in does not apply to all of your income. The 35% rate only applies to the portion of your income that is higher than the bracket ($373,651) limit. As a family of four, even the Obamas would only pay:

Taxpayers Filing as Married, Filing Jointly or Qualifying Widow(er):

* 10% on taxable income between $0 and $16,750
* 15% on taxable income between $16,751 and $68,000
* 25% on taxable income between $68,001 and $137,300
* 28% on taxable income between $137,301 and $209,250
* 33% on taxable income between $209,251 and $373,650
* 35% on taxable income over $373,651

And investment income is calculated separately, so dividends or capital gains from stocks sold would have been at 15%. Income from certain bonds would be untaxable.

Paying an average rate of 26% is quite high for anyone. Especially when you consider that if everyone paid just 10%, the total taxes collected would be almost identical. Some people pay 26% just so others can freeload and pay nothing, or even get welfare “refunds” from the IRS when they didn’t pay anything to begin with.