May 27 2009
Taxing the Rich
A popular tactic of the Democrat party is to promote class envy. We need more tax revenue so let’s increase taxes on the wealthy. After all, they can afford it, and they need to pay their fair share. At least that is what they tell us. However, the rich, did not get to be rich by being stupid and just accepting whatever comes their way.
The Wall Street Journal published an enlightening story on taxing the wealthy that caught my interest, mainly because it concerned my state of Maryland. Like many states, Maryland has been having trouble balancing the budget. Governor Martin O’Malley’s (a Democrat) solution, implement a “Millionaire’s Tax” by raising the state income tax on anybody earning over $1 million. O’Malley asserted that this small percentage of Marylander’s was willing and able to pay the extra taxes.
The result, is that in 2009 there were 2000 returns filed by people who earned $1 million in 2008 compared to 3000 returns the previous year. This resulted in a decline of $100 million in taxes collected from those filers. They had predicted an increase of $106 million. Not exactly the desire result. Some of the decline can be attributed to the economy, but some can be attributed to people leaving the state due to the tax increase.
We hear everyday about the budget woes of the state of California. California has one of the highest state tax rates in the country (according to the Tax Foundation they were the 6th highest state for taxes). Wealthy Californians and businesses are leaving the state for more tax friendly locales like Nevada (49th in the country). The same can be said for New York where Rush Limbaugh recently announced he was leaving the state because of the ever increasing taxes in the state (#2 according to the Tax Foundation).
Increasingly, the rich (and I am far from being one of those folks) are being asked to be responsible for more of the load. If they are continually forced to pay more of their income in taxes, they will leave for friendlier climates. It is clearly happening on the state level leaving more of the burden to fall on the middle class.
It is amazing, isn’t it? The government has become insatiable in their desire to confiscate our property and spend it how they see fit. Us little people just aren’t as enlightened as they are in knowing what is the best use of the money we earn.
I will put it this way, Wind. I have never gotten a job from somebody that was in the same income bracket as I am. I have been in business most of my life, as a buyer in the retail trade. Any time a business has an increase in the cost of doing business, that increase has been passed on to their customers. So if you increase taxes on business or the wealthy, there is a trickle down effect and the lower and middle income folks pay a larger share of those increases.
I will grant you that the republicans have failed in recent years in regards to controlling spending. It has not always been that way. There has never been spending like there is under Obama. He complains about the deficit he “inherited” and how it hurt the economy, but his solution is to spend more. Seems illogical to me.
No, I did not say anything even remotely close to that. Plus how do you define “fair share?” The top 5% of earners in the US earn 36% of the income but pay 60% of the taxes. To me that seems like a pretty fair share.
How can anyone say the “less wealthy” carry more than their fair share of the tax burden?
The uber-wealthy have insurance, private doctors, private schools, private universities, sprinklers in their homes, and often private security.
They don’t use public hospitals, public healthcare benefits, public schools, state universities, or emergency services as much. They also certainly don’t use food stamps and other welfare benefits.
They spend more money, thus pay more in sales taxes. They utilize investment vehicles more often, thus paying more in capital gains taxes.
The reason some of us defend them is as a matter of principal. If I ever get from my thirty-something thousand a year salary to the level of the uber-rich, it will be because of my own hard work and intelligence. Who is the government to punish me for either?
People don’t advocate a REGRESSIVE tax. We advocate a more fair, more equal tax, which is a) more enforceable, and b) more supportive of the capitalist ideals on which we have built the world’s greatest nation and economy.
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Very well said, Z. I actually support the FairTax. It is progressive and is based on consumption.