Examiner Editorial: If top 5% paid 40% of taxes, what is their 'fair' share?

Washington Examiner ^ | Sunday, November 25, 2012

[upchuck]

Riding a wave of confidence after his re-election victory, President Obama is eager to collect scalps from the class war he appears to have won. Americans, Obama said in his postelection news conference earlier this month, "want to make sure that middle-class folks aren't bearing the entire burden and sacrifice when it comes to some of these big challenges. They expect that folks at the top are doing their fair share as well." House Minority Leader Nancy Pelosi, D-Calif., echoed this point in a fundraising pitch sent out on Monday: "Voters sent a clear message to Republicans in the election: we must stand up for the middle class and ensure the wealthy pay their fair share."

Although Obama and his fellow Democrats repeatedly call on wealthier Americans to pay their "fair share," they never specify what percentage of the nation's tax burden the wealthy would have to bear. As matters stand, the top 1 percent of American households paid 39 percent of income taxes in 2009, according to the most recent data compiled by the Congressional Budget Office, and the top 5 percent of taxpayers paid 64 percent.

But income taxes, taken in isolation, do not tell the whole story, because lower-income Americans do pay payroll taxes. But even taking into account all forms of taxation, the top 1 percent still paid 22 percent of federal taxes while earning just 13.4 percent of household income. The top 5 percent paid 40 percent of all federal taxes, despite earning only 26 percent of all income. No matter how you slice the numbers, it's hard to understand why anyone would think the wealthy aren't already shouldering a burden commensurate with their blessings.

In the next few weeks, Obama will keep repeating this "fair share" language as part of his call to raise taxes on those earning more than $250,000 per year. He also wants to close additional loopholes and limit deductions to increase their tax burden further. But bear this in mind: On top of whatever new taxes go into effect in the deal to avert the so-called fiscal cliff, there will be additional new taxes due to Obama's national health care law. These include a 0.9 percent Medicare tax hike for individuals earning more than $200,000 per year and couples earning more than $250,000 as well as a 3.8 percent surtax on investment income.

Moreover, even if Obama gets his way on all of his tax hikes on the wealthy, it still won't make a dent in the $16.3 trillion national debt. Later in his term, once he has blown all of the new revenue with spending increases and goes back to this well for still more revenues, will the media let Obama get away with claiming the wealthy aren't paying their "fair share" once again, without specifying what constitutes fairness?

[PMAS]

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[tlp2001]

I’d like to see Hollywood entertainers making more than 1 million a year taxed at a rate of 75%. I’m sure they’d love obam bam then.

[TurboZamboni]

New Nobel Laureate Warned Against Obama Stimulus Package, Calling It ‘Surprisingly Naïve’

http://www.nysun.com/national/new-nobel-laureat-warned-against-stimulus-package/87512/

“The calculations that I have seen supporting the stimulus package are back-of-the-envelope ones that ignore what we have learned in the last 60 years of macroeconomic research.”

“I recall President Obama as having said that while there was ample disagreement among economists about the appropriate monetary policy and regulatory responses to the financial crisis, there was widespread agreement in favor of a big fiscal stimulus among the vast majority of informed economists. His advisers surely knew that was not an accurate description of the full range of professional opinion. President Obama should have been told that there are respectable reasons for doubting that fiscal stimulus packages promote prosperity, and that there are serious economic researchers who remain unconvinced.”

“….if, in the United States, we create a system where unemployment and disability benefits are permanently extended in their generosity and their duration, we will inadvertently put ourselves into the situation that much of Europe has suffered for three decades.”

[Starboard]

“The only long-term solution I see might be for the red states to take preliminary steps towards the creation of an independent “coalition of states” to collectively resist the efforts to subjugate them by the federal government in Washington.”
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I looks like we share a common assessment and vision. I especially liked your Titanic analogy.

A coalition of states would effectively be a form of virtual secession. Or you could call it an agreement, just like federal agencies do with their own cooperative Interagency Agreements. The feds wouldn’t like this tactic of course, but what really could they do about it if a group of states resists or refuses to go along with the coercive power of the central government? In fact, the doundation has already been laid for this type of coalition when the states banded together to take on the onerous burdens impoosed by Obamacare. It’s now time to take it to the next level. Regards.