Scott Hodge of the Tax Foundation has, in rebuttal to President Obama’s State of the Union speech, published two charts that show how radically progressive our current tax system is:
We found that federal tax and spending policies are already very progressive and redistributive. As the charts below indicate, the bottom 60 percent of families – those earning under about $85,000 in 2010, receive more in total spending benefits from government than they pay in all taxes combined. In other words, the benefits they receive from government – from education and roads to national defense and welfare – greatly exceed all the federal taxes they pay – from income and payroll taxes to gasoline and corporate income taxes.
Indeed, the lowest-income Americans paid less than $1,700 in total taxes, but received $17,617 in spending benefits. In other words, they received more than $10 in spending benefits for every $1 they paid in taxes of any kind. Remarkably, middle-income families – whom Obama says government does not do enough for – got $1.15 in spending benefits for every $1 they pay in taxes.
By contrast, the top 40 percent of families pay far more in taxes of all kinds than they receive back from government in benefits. For example, families earning between roughly $86,000 and $110,000 paid an average of $23,289 in total taxes, but received $22,938 in benefits – equal to about 0.98 cents on the dollar. The wealthiest families, those earning over $712,000, paid more than $660,000 in taxes but received $283,000 in spending benefits – equal to about 0.43 cents on the dollar.
The charge that the rich aren’t paying their fair share of taxes is a blatant lie. But in spite of its dishonesty, it sticks. Why? Because few people will take the time to research and understand the truth, which, as Scott Hodges illustrates, is that the rich and successful fund the lion’s share of government and receive relatively few benefits in return.
So, yes, unfairness exists, but not in the class-warrior way the radical left wants you to believe. Unfairness exists because those who pay the least into the system receive the greatest benefits from it and those who pay the most into the system receive the fewest benefits from it. What egalitarians really object to is that the system isn’t unfair enough.
Progressives simply cannot abide the fact that some folks are wealthier and more successful than others. They just know in their bleeding, tolerant and compassionate hearts that if inequality exists, it must be a result of greed, treachery and abject cheating.
Make no mistake about it, liberals’ primary goal is income and wealth equality. Consequently, they will do anything they can to malign, defame and undermine the wealthy and successful, regardless of how much these folks pay into the system and how little they take out of it.
These radical egalitarians have no earthly clue as to how to raise the prosperity of the poor, so, in order to achieve their Utopian equality, they promote policies that will lessen the prosperity of the rich. And the number one policy they espouse to acheive this artificial equality is confiscatory taxation. Of course, the only way they can get the masses to support tax increases on the rich is to convince them that the rich are, a) gaming the system; b) getting all the breaks; and c) not paying their fair share, so they lie, lie, lie, just like Alinksy told them to do.¹
Scott Hodges’ charts won’t stop these class-warriors from lying, but they at least provide powerful evidence that they are lying.
Footnotes:
¹ Here are some examples of the subversive trash Alinsky peddles in Rules for Radicals:
The organizer dedicated to changing the life of a particular community must first rub raw the resentments of the people of the community; fan the latent hostilities of many of the people to the point of overt expression. He must search out controversy and issues, rather than avoid them, for unless there is controversy people are not concerned enough to act.
The tenth rule of the ethics of rules and means is that you do what you can with what you have and clothe it in moral arguments. …the essence of Lenin’s speeches during this period was “They have the guns and therefore we are for peace and for reformation through the ballot. When we have the guns then it will be through the bullet.”
3 responses so far ↓
1 Mike B. // Jan 25, 2012 at 9:57 pm
Who are the 1%’s employees? Who does the 1% rely on for cheap labor enabling them to reap profits (they haven’t arrived at their positions in society by doing all of the dirty work themselves)? What would the 1% do without them (and how much money would the 1% then make)? The analysis above paints 60% of society as leeches – but if the 1% is smart, it’s happy that roads are there for the 60% to get to work, the 60% have the disposable income to pay for insurance to stay healthy and go to work, and the 60% are educated enough to perform the functions that the 1% don’t have the time, interest or desire to perform themselves.
Sure if you look at the numbers on a per capita basis, assuming that every person gets an equal benefit from every tax dollar spent, the numbers may look skewed. This obviously isn’t an accurate (or necessary) assumption – it’s just a helpful one if you are the 1%.
Out of curiosity, do the figures above include the billions of dollars in bailout money received by big banks and big auto?
You talk about proponents of income/wealth equality taking away from the “successful.” How many of the 1% got there on their own individual successes?
If you are saying that success is what matters – you’d surely support a system that would provide incentives for hard work and innovation (as opposed to one that allows trust fund babies to rest on the coat tails and capital of their predecessors), no?
I can’t stop myself from reading your blog!
2 Peter // Jan 26, 2012 at 8:29 am
Mike B,
The only reason I even cite these statistics is to point out that the argument the left makes that the rich are not paying their fair share is a bogus one.
Thanks for reading my blog. I enjoy your comments. They keep me honest.
3 JD // Feb 7, 2012 at 9:45 pm
Mike B, what you say is an example of ivory tower thinking – you’ve discovered a “profound truth” that’s actually just a forgetting of something obvious.
You say the rich are nothing without the poor, but the reverse is also true. What could a worker produce without a place to work, and tools, and raw materials, and a sales channel for his finished product? He’s as worthless without his employer as his employer is without him.
So how do we resolve the fact that both sides owe each other? The way we’ve done it for thousands of years – with employer and employee agreeing on compensation before work begins. That compensation covers what the two owe each other. You’ve forgotten it in your analysis.