Peter Schiff: The Fantasy of a 91% Top Income Tax Rate

Wall St. Journal ^ | 12/6/12 | Peter Schiff

[bigcat32]

Democratic Party leaders, President Obama in particular, are forever telling the country that wealthy Americans are taxed at too low a rate and pay too little in taxes. The need to correct this seeming injustice is framed not simply in terms of fairness. Higher tax rates on the wealthy, we're told, would help balance the budget, allow for more "investment" in America's future and foster better economic growth for all. In support of this claim, like-minded liberal pundits point out that in the 1950s, when America's economic might was at its zenith, the rich faced tax rates as high as 91%.

[norwaypinesavage]

"The elites won’t pay it, because they have tax evasive options. Poor suckers like us foot the bill."

that's simply not true. The top 1% of the income earners pay 39% of the income taxes, the 25% of the people in the upper income brackets pay 86% of the income taxes. The 50% of the people in the lower income brackets pay 3% of the income taxes.

[norwaypinesavage]

"Here in FL sales tax is 7.5%. Payroll tax at present takes another 5.65%. So any employed person here is paying over 13.15% in taxes, no matter how little they make."

You can't add sales tax in because a large portion of money spent may not be charged sales taxes. Items like rent, mortgages, interest, utilities, and food and labor in most states, are not charged.

[bigcat32]

“Yet in discussions about whether the rich are over or under taxed, this particular tax is generally the only one discussed by both sides. That seems a little odd to me.”

Why is that odd? Income tax is confiscation of property. Sales taxes, gas taxes and the like are based on consumption and not production. Income tax is what government takes from our production and it is this tax which should be discussed. Why should tax on production be graduated upward based on amount produced? It’s a penalty on production which suppresses production which is bad for job creation and for society. That’s the point.

[Sherman Logan]

Good point. So we pay sales tax on a percentage of purchases, not all of them.

[CA Conservative]

Here in FL sales tax is 7.5%. Payroll tax at present takes another 5.65%.

So any employed person here is paying over 13.15% in taxes, no matter how little they make. Much more in reality, of course.

There is a problem with your math. No one spends 100% of their income on taxable expenses. Most states do not charge sales tax on the biggest expenditures - food, housing, transportation, services, etc. So to get a realistic figure, you would have to estimate what percentage of their income they spend on taxable items. So if they spend 20% of their income on taxable items, the calculation would be 5.65% (FICA) + (20%*7.5%) = 5.65%+1.5% = 7.15%.

[driftless2]

Obama knows all the facts. He doesn’t care. He’s a leftist ideologue bent on destroying the traditional American economy. It’s all about “fairness” don’t you see. It’s not fair that some people make a lot more than others. Obama will fix that. He’ll fix everything. (snicker)

[Darth Reardon]

Actually, FL sales tax is 6.0%. The rest is local. Where I live it’s a county tax of 1.0% (applied only up to the first $5,000 of a transaction).

[bigcat32]

“Obama knows all the facts. He doesn’t care.”

It’s our job to inform the “useful idiots” who are brain washed by the lies of the left. It’s our job to inform the people who do care and are interested in facts. There will always be people who are informed and still want to destruct America. We need to change the minds of people where we can.