President Obama thinks that he will bring billions back into the treasury by raising taxes on the top 2%, also known as the ‘rich’. Of course they won’t call it that because that truth is too harsh. Instead they fudge it by calling it ‘allowing the Bush tax cuts on the rich to expire’.
What’s with the Democrats today? In their world view, there are only the ‘rich’ and the ‘poor’. They imply that we live in a feudal society where people are born into their economic strata, never to be able to move up, but always with the specter of moving down- unless they get the benevolent help of a Democrat hand out.
But first, let’s shine the light of truth on the President’s statement. The term ‘rich’ is at once vague and subjective. To a teenager, someone making $100,000 a year might seem ‘rich’. To a working adult, some making over $1,000,000 a year might seem ‘rich’. What is really being described is someone who is productive and/or successful at what they do.
Essentially what President Obama wants to do is increase the burden/take away more money from those who are the most productive and successful in our society. This is because they don’t pay their ‘fair share’, right?
Wrong. The facts are stark. An insanely small percentage of our citizenry are already paying the majority of our total income taxes.
According to IRS figures from 2006:
Top 1% of income earners paid 40% of our total income taxes.
Top 5% paid 60% of our total taxes.
Top 10% paid 71% of our total taxes.
Top 50% paid 97% of our total taxes!!
Bottom 50% paid 3% of our total taxes
Bottom 40% paid none of our total taxes!!!
Well come on, you might say- that top 1% or even top 10% must all be million-plus-dollar-a-year types, right? Again, not so. The Adjusted Gross Income (AGI) of these groups is as follows:
Top 1% AGI: $388,806 or more a year
Top 5% AGI: $153,542 or more a year
Top 10% AGI: $108,904 or more a year
Top 25% AGI: $64,702 or more a year
Top 50% AGI: $31,987 or more a year
Can you see what a myth it is that taxes are ‘unfair’ for the poor or how the ‘rich’ don’t pay their ‘fair share’? Most people have no idea how quickly they could find themselves as one of the ‘rich’ that Obama and Democrats want to fleece.
What will happen as a result of the Obama/Democrat tax increases? It’s a matter of human nature. Those productive people- seemingly unknown to Obama and the Democrats- are rational operators. Given less reward for hard work, they will labor less. Given less reward for running their small businesses, they will lay people off, they will defer expansion plans and therefore, the need for more employees. Given less reward for their investments, they will avoid the risk and pull their money out of the stock market and start-up funding and look for something that is less risky. The economy will continue to contract, joblessness will continue to rise, and everyone will- including the government- will end up with less money. Everyone loses until we go back to letting the free market operate.
Note to Obama and leftist Democrats: Get some common sense!