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Suppose you and I go to a fancy restaurant. Under which scheme would it would be more likely for me to order a $150 bottle of Chateau LaFite Rothschild Bordeaux wine, chateaubriand and a $200 bottle of Chateau d'Yquem to go with our dessert -- if you're paying the bill, or if we each pay for what we order? The answer's a no-brainer. If you're paying the bill, why not sock it to you?
That scenario explains why Republican who calls for tax cuts don't enjoy more popularity. It also explains successes Democrats have in exploiting the issue. According to the most recent U.S. Treasury Department figures, in 1997 the top 1 percent of income-earners (those with income of $250,000 and higher) paid 33 percent of all federal income taxes. The top 5 percent of income-earners ($108,000 and over) paid 52 percent, and the top 50 percent ($36,000 and over) paid 96 percent of income taxes. Guess what the bottom 50 percent of income earners paid?
If you're among those who pay little or no federal income taxes, what do you care about tax cuts? Moreover, if you think tax cuts pose a threat to government handout programs, you might be openly hostile and support Al Gore's silly "risky scheme" talk. So many Americans paying little or no federal taxes makes for a natural spending constituency. It's like me in the restaurant: What do I care about extravagance if you're footing the bill?
We hear political demagogues like Vice President Gore and Rep. Dick Gephardt, D-Mo., in their efforts to create class warfare and envy, whine about "winners in life's lottery" and "tax cuts for the rich." It would seem that by now at least one of our know-it-all media elite might have asked: At what income level does being a "winner in life's lottery" begin? How much income qualifies one as being rich?
Does being rich start with that 5 percent of Americans who earn $108,000? Or, does it start at $250,000? Why not some media interviews with men earning $108,000 or $250,000 a year with a wife, two youngsters in college, a home mortgage and car payments and ask, "Do you feel rich?" A $100,000 or $200,000 yearly salary is nice, but it hardly qualifies as rich. It's not even yacht, Learjet and country club money.
Another question not asked of "risky scheme" politicians is how can a person be given an income tax cut if he doesn't pay any income taxes? Gore's idea of targeting tax cuts to the lowest 50 percent of taxpayers is a devious scheme to avoid tax cuts -- and keep more money in Washington.
This year's political demagogues whine that treatment decisions should be left with patients and their doctors, not some HMO "bean counter." But early in the Clinton-Gore administration, there was that failed attempt to socialize our entire health-care system. Had Clinton and Gore been successful, there would have been government "bean counters" who would have been dictating to doctors.
Right now if you are dissatisfied with your HMO, you can purchase other forms of medical insurance or even pay out of your pocket. Under the Clinton-Gore socialized medicine scheme, those options would not have existed. You would have no recourse to federal government medical edicts. In countries with socialized medicine, the government decides who does and who does not get medical treatment. For example, 20 percent of kidney dialysis centers in Europe, and 50 percent in England, refuse to treat patients over 65.
Ignorance creates a fertile climate for demagogues; maybe that's why politicians give so much support to the public education establishment.
WorldNetDaily contributor Walter E. Williams is the John M. Olin Distinguished Professor of Economics at George Mason University in Fairfax, Va.©2000 Creators Syndicate, Inc.
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The wonderful Dr. Williams!!!
A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw
Right now the bottom 60% perceive a light tax burden,(in many cases even a handout) and continues to clamor for more from government looking for the top 40% to pay for it. Politicions continue to propose to make that perception even stronger by eliminating even more participant from the Individual Income Tax rolls.
A prime example of what is happening comes from an analysis, the Individual Income Tax effective rates in comparison with the Total rates of Federal taxation:
Those who perceive little burden play the role of Poor little Paul:
| Effective Individual Federal Income Tax Rate (Percent of reported gross income) | |||||||||||
| Income Category | 1977 | 1979 | 1981 | 1983 | 1985 | 1987 | 1989 | 1991 | 1993 | 1995 | Projected 1999 |
| Lowest Quintile | -0.6 | -0.8 | -0.2 | -0.5 | -0.2 | -1.3 | -1.9 | -2.9 | -3.4 | -5.6 | -6.8 |
| Second Quintile | 3.6 | 3.9 | 4.6 | 3.5 | 3.9 | 3.2 | 3.3 | 2.7 | 1.8 | 1.8 | 0.9 |
| Middle Quintile | 7.1 | 7.5 | 8.3 | 6.8 | 6.8 | 6.1 | 6.5 | 6.3 | 5.9 | 6.1 | 5.4 |
Those that readily perceive some of the burden.
| Effective Individual Federal Income Tax Rate (Percent of reported gross income) | |||||||||||
| Income Category | 1977 | 1979 | 1981 | 1983 | 1985 | 1987 | 1989 | 1991 | 1993 | 1995 | Projected 1999 |
| Fourth Quintile | 9.7 | 10.4 | 11.3 | 9.5 | 9.3 | 8.7 | 8.9 | 8.7 | 8.5 | 8.7 | 8.4 |
| Highest Quintile | 15.8 | 16.3 | 17.1 | 14.5 | 14.3 | 15.1 | 15.1 | 14.8 | 15.5 | 16.2 | 16.1 |
To play the role of mean ole Rich Peter.
While Congress plays both ends against the middle; hiding the real burden in inflation, higher prices on all goods and services, lower takehome pay, lower return on investment, and higher interest rates. All keeping everyone right where they are in their assigned roles.
Consider that 15.3% SS/Medicare tax on the 1st $70K of wages/self-employment income, plus the 6% Federal Unemployment tax, all of which are but a portion of the effect of federal taxes embedded the price of all products we purchase. Raken together with the Individual tax rates above we all pay more than:
| Effective Total Federal Tax Rate (Percent of reported gross income) | |||||||||||
| Income Category | 1977 | 1979 | 1981 | 1983 | 1985 | 1987 | 1989 | 1991 | 1993 | 1995 | Projected 1999 |
| All Families | 22.8 | 23.4 | 23.5 | 21.4 | 21.8 | 22.6 | 22.5 | 22.6 | 23.5 | 24.7 | 24.2 |
With a peak near the center when one assumes we all pay corporate/business taxes through high prices and high loan interest rates; with the EIC reducing burden on the low end, relief from SS/Medicare tax and exception rules reducing burden on the high end; The middle stuck gets stuck in the crunch between.
All Data from IRS collections statistics and The Bureau of
Economic Analysis as compiled in tabular form by the
Congressional Budget Office.
http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0
But even those statistics are being distorted:
"The estimates of effective tax rates shown in Table 1 have been published previously, but the methodology used to estimate them has changed over time. In particular, CBO has changed its method of allocating corporate taxes from one that splits the corporate income tax between workers and owners of capital to one that assigns the whole tax to owners of capital."
And the fine print at the bottom of the tables:
SOURCE: Congressional Budget Office.
NOTES:Pretax family income is the sum of wages, salaries, self-employment income, rents, taxable and nontaxable interest, dividends, realized capital gains, and all cash transfer payments. Income also includes the corporate income tax and the employer share of Social Security and federal unemployment insurance payroll taxes."
In short, inflating the income divisor over what the wage earner will ever see lowering the effective percent tax rate; distorted to hide the effect of higher prices and lower wages have on the lower 60% of the electorate.
We wonder why over 60% of the public voters PERCEIVE no problem with the taxrates and vote for polidiots that promise to bring home the most bacon because they are the only ones that benefit from higher taxes with more spending on socialistic "gimme" programs. If this continues, expect a liberal tax and waste congress in short order, and for many years to come.
And I haven't even touched the costs impressed on business and the consumer(Voter) that are a consequence of trying to determine the amount of tax to pay and the tax litigations that burden so much of business and many individuals. That increases total tax burden to approximately 133% of the table rate values.
Town Crier Staff Writer
Clyde Noel : http://www.losaltosonline.com/latc/arch/9528/
"In a book titled "Costly Returns," economist James Payne estimates the nation's bill for tax record-keeping, audits, filing tax attorneys and accountants totals an astonishing $593 billion. To put it another way, that's more than twice as much as last year's entire defense budget and $240 billion more than all 1996 Social Security outlays."
And that was 5 years ago, I hesitate to guess what it is today, all due to the current income/payroll tax system.
It is long over time to end the Income Tax once and for all and a bill to do just that:
H.R.2525
SPONSOR: Rep Linder, John (introduced 07/14/99)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.
We are all pay through the nose, rich and poor while politicians play the tune of envy and resentment that Americans continue to respond to not understanding the full picture what is happening to them.
An ecomonics course in one post!!
One of the great failings of the Republicans over the past 20 years, I believe, has been the removal of so much of the populace from the rolls of taxpayers. That has created this situation.
There is actually a reasonably good argument against the GOP's proposed tax cuts in terms of fairness. If tax rates are lowered, little help is provided to the 50% of the populace who pay most of their taxes to Social Security (i.e. these people pay 15.65% of their total wages).
I would prefer the GOP to make this argument:
Personally I prefer a simple single stage, single rate consumption tax. Tax once then never again. Provide a baseline prebate of the tax to take the place of the exemptions and credits of the income tax and tax all new goods and services with no exceptions.
Every citizen receives the same prebate, everyone pays the same tax rate. Simple straight forward and no room for special interest deductions or other tax code type finagling that goes on now. Put the IRS and the Lobbiests out of business.
I also think that the fairer, simpler method of taxation is the NRST which not only puts more money into the pockets of wage earners, but provides them a prebate (Family Consumption Allowance) in addition.
When done in this manner everyone, even the poor among us, pay taxes and that is certainly the fastest and best method of bringing maximum heat on the politicos to reduce spending. In addition, it will greatly help the economy since it reduces consumer prices and will encourage savings and investment (which are not taxed).
Little Willie is "The Worst President In American History".
Nice theorém . ., that & a nickel won't get you a cup of coffee unless I buy it for you.Or do you prefer TEA?{as in the harbor @ Boston}
Burble, burble seventy-three.
He don't drink coffee; he don't drink tea.
But even so he prattles on.
And will no doubt do so till he's gone.
Little Willie is "The Worst President In American History".
Like a good little pet you respond quickly, but you never have anything to say.
& good people who can see through any Kings new clothes will never go away.
Burble, Burble ... it's noontime
And here the guy attempts to rhyme.
But he has a problem for all to see
Called continual (and gross) cupidity.
Little Willie is "The Worst President In American History".
Dr. Williams is, as always, right on the money in a very eloquent way. You would think even Dumbocraps would be able to understand his writings and speeches.
Burble, burble, ain't it a fright?
He links you to a TP website.
If you go there to read just please be aware
You don't battle the IRS right then and there.
Little Willie is "The Worst President In American History".
. . . or anywhere, that's just it, why fight with an idiot, when you can ask unanswerable questions that will shrivel him away like frightened turtle in a cold pool.
Burble, burble thirty four.
Now we see he does abhor
Any speech that's straight and plain.
(It's doubly tough when you've got no brain.)
Little Willie is "The Worst President In American History".
Burble, burble seventy three.
It's plain he thinks he a bogy.
Really, though, most folks would assess
He's actually just a horse's ... well, you know!
Little Willie is "The Worst President In American History".
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.
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