Income Tax: Who Pays and How Much

How much money do you make?  That is one of the two questions that my mother said should not only never be asked, they should absolutely never be answered.  The other question was, “For whom did you vote?”  Mom didn’t mince words when asked either of these questions.  It was none of your business.  So, in deference to Mom, I am asking the original question only in its rhetorical form.  If you ask most people how wealthy they are, they will usually say, “…middle class.”  Here are some guidelines.

 

Less than $32,395       bottom 50% of Americans   who pay   2.25% of total tax burden

Over         $32,395      top       50% of Americans    who pay 97.75% of total tax burden

Over         $66,193      top       25% of Americans    who pay 87.30% of total tax burden

Over        $112, 124    top       10% of Americans    who pay 70.47% of total tax burden

Over        $154,643     top         5% of Americans     who pay 58.66% of total tax burden

Over       $343,927      top         1% of Americans     who pay 36.73% of total tax burden

 

            Personally, I was three years away from retirement, and a school principal, before I got to the top 25% of Americans, and never made it to the top 10%.  But, if you want to know who those much mentioned, “1%-ers” are, it is anyone who, as an individual or a couple, or as an owner of a business or farm, who makes more than roughly, $350,000.  I would be willing to bet that anyone making that amount of money would be shocked to think of themselves as part of the privileged class.  They are undoubtedly grateful for having the brains and energy to make a good living.  They are probably grateful for having had opportunities for schooling and work.  They know that there are many reasons (including a certain amount of luck) for their success, but they also know that none of those factors work if they don’t work. 

            However, I don’t want to talk about the top 1%.  Frankly, they aren’t rich enough.  I want to talk about the cream of that particular crop--the top of the 1%.  This ultra-top (1/10 of the 1%) are those earning over $1.3 million/year. What would happen if we were to raise the tax rate on the richest of the rich from its present 24.3% to 30%?  This is the so called Buffet rule.  How many problems would it solve?  How much debt would it reduce?  How much good would it do?  The government would acquire an extra $34.5 billion dollars.   To me—the retired school teacher—that sounds like an amazing amount of money. 

            Here is the part I want you to think about quietly, reflectively, honestly, in the quiet of your favorite room and favorite chair.  While over $34.5 billion sounds like a great deal of money, the fact is that if we collected that extra tax revenue for 43 years (!) it would just equal the Federal budget deficit for the year 2011.  Now think about this.  Suppose we could take that same amount of money and leave it in the economy year after year.  How many jobs and businesses would be created with that $34.5 billion a year?  How many children would be educated?  How many loans made?  How many inventions patented?  How much construction started and completed?  For that matter, how many other types of taxes, state, local and income would be paid with that money?  What would we, the people, instead of they, the government, do with that money? 

            This is why I am a Republican. 

            Happily pay your taxes, and keep the faith.