Tax the Rich and Solve What?

The cry is getting louder and louder with the President holding the Bull Horn.

OK.  What if we did raise taxes on the rich and made them pay their “fair share” (with no definition of fair coming from the left).  Would that finally solve the budget woes the country is in?

Let’s look at the math.

In 2008 (latest data available) there were 1,400,000 returns filed by people in the top tax bracket $392,149.  Their total income was 1.7 trillion dollars.  They paid 400 billion in taxes at 23% leaving them with 1.3 trillion after taxes.  The deficit is 1.5 trillion.

Since the deficit is 1.5 trillion and they only have 1.3 trillion left they would need to be taxed at an additional 115%.  Since they are already taxed at 23% their total tax bill would need to be 138% of what they made.

Of course those numbers are for federal income taxes only.  These taxpayers also paid sales tax, property tax, state income tax, and of course all of those fun little hidden taxes we love and adore.

So, now that we’ve taxed all wealthy Americans into poverty, with no solution to the budget or deficit problem, what do we do next?

That question is directed at you, the Left, since your bright idea to tax the rich doesn’t work out so well.

Let the spin cycle begin…

Source(s):
The Tax Foundation

Walter Williams, an economist, author, and syndicated columnist, truly clarifies the absurdity of going after the rich to solve all of our financial woes in this country.

Politicians, news media people and leftists in general entertain what economists call a zero elasticity view of the world. That’s just fancy economic jargon for a view that government can impose a tax and people will behave after the tax just as they behaved before the tax, and the only change is more government revenue. One example of that vision, at the state and local levels of government, is the disappointing results of confiscatory tobacco taxes. Confiscatory tobacco taxes have often led to less state and local revenue because those taxes encouraged smuggling.

Similarly, when government taxes profits, corporations report fewer profits and greater costs. When individuals face higher income taxes, they report less income, buy tax shelters and hide their money. It’s not just rich people who try to avoid taxes, but all of us – liberals, conservatives and libertarians.

What’s the evidence? Federal tax collections have been between 15 and 20 percent of the nation’s Gross Domestic Product every year since 1960. However, between 1960 and today, the top marginal tax rate has varied between 91 percent and 35 percent. That means whether taxes are high or low, people make adjustments in their economic behavior so as to keep the government tax take at 15 to 20 percent of the GDP. Differences in tax rates have a far greater impact on economic growth than federal revenues.

So far as Congress’ ability to prey on the rich, we must keep in mind that rich people didn’t become rich by being stupid.

See the Walter Williams full column here.

Related articles

• Only in America (dickiehaha.wordpress.com)
• Calif. governor: Tax rich to fill $16 billion gap (wnd.com)
• http://www.huffingtonpost.com/peter-morgan/taxing-the-rich_b_1131020.html