Are you tired of all the tax trash talk? The rich are getting richer on the backs of the poor. Tax cuts benefit the wealthiest Americans. I plugged “tax cuts for the rich” into Google and got back 10,900,000 results in 0.23 second.
This whole attitude, fanned daily by the national media, has been bothering me for years. But I always buck up and try to ignore the chatter. If you have big taxes to pay, that must mean you are making good money. Taxes serve the greater good. Be sure to share your good fortune with those less fortunate. The need is so great. I believe these things with all my heart.
But, frankly, I’ve had just about enough talk about how wealthy people need to step up to the plate and give more, more and then some more. They need to give their fair share. This message comes at a time when, according to the Tax Policy Center, in 2009, 47 percent of Americans paid no federal income tax. I do understand most of the people who don’t pay federal income tax pay a lot of other taxes—Social Security, Medicare, state and local income taxes, sales taxes, gasoline taxes and the list continues.
However, the people who do pay federal income taxes also pay all these other taxes. If 47 percent pay zero federal tax, then 53 percent pay 100 percent of the tab. It’s the same situation we’re in with health care, where those who do pay for services pay a much higher rate to make up for all those who don’t pay for services. Somebody’s got to pay.
There are many other tax inequities. Did I mention the estate tax yet? Where is the justification for taking money that has already been taxed as it is passed on to family members? And, let’s make sure that tax is 55 percent or higher! The alternative minimum tax is basically a tax thrown in at the end of a tax return that says, “You make too much money so we’re going to take more of it.”
What about the issue of how to define who is rich? That is in the eye of the beholder and policymaker. There is quite a gray area on the lower end of the so-called wealthy spectrum. In many cases, a “rich” family is a few short months away from financial disaster if a well-paying job is lost. I assure you they don’t feel rich.
I want to make an important point about taxes. If I really thought a tax increase would dig us out of the debt mess, I would be willing to contribute more. If, for example, over the next 10 years, my “debt reduction assessment” were $15,000 a year more than I’m paying now and with everyone’s participation we’d get back to even in that time, I would be one of the first to endorse the plan. I want to help end the madness and provide a more secure future for my family and for everyone in America.
But, how do you trust a government that never has enough money whether the federal income tax rates are 92 percent or 28 percent? Both parties say we have to reduce the debt, yet the latest tax-cut deal is projected to cost almost $900 billion. The other story of the day is the Senate spending bill, a 1,900-plus-page document outlining over a trillion dollars in spending, which includes $8 billion in earmarks and pork projects. Were these politicians not paying attention in the election last month or do they just not care? Maybe they figure this is one of their last chances to get some of their pet projects funded. Many of them are leaving office soon, anyway. The bottom line is, the only thing I trust about this current Congress and administration is that they will come back at us for more and more to fund their spending addiction.
I do believe the tax code needs a total overhaul. Whether the plan is a flat tax, fair tax, flatter tax or fairer tax, I don’t know. But the time is ripe for change. In the meantime, if the powers in Washington would just stop the insane, out-of-control spending, we wouldn’t need higher taxes, no matter what plan we use.•
Morris is publisher of IBJ. His column appears every other week. To comment on this column, send e-mail to email@example.com.