April 7, 2010: Yet again, today I heard not one but two conservative commentators Laura Ingraham, and Rush Limbaugh comment yet again on the tax burdens allegedly borne by the wealthy. Ingraham, like so many other conservatives misstated the facts. This time, Limbaugh got it right.
It goes something like this:
Ingraham: The upper 10% of the people in this country pay 47% of the taxes. This is a statement, with variations, that I have heard Sean Hannity (3 times), Neil Cavuto (4 times), Bill O'Reilly (twice) and a plethora of other (of my fellow) conservatives say in recent months on the air.
Limbaugh: The upper 10% of the people in this country pay over 50% of the Income Taxes.
It's not accurate to aver that the rich pay most of the taxes and those who make these statements know it. In fact the breakdown on the (Federal) taxes collected is this: (irs.gov)
39 % - Personal income taxes.
30 % - Social Security, Medicare, unemployment taxes.
10 % - Corporate income taxes,
6 % - Excise, customs, estate, gift, etc. taxes.
15 % - Borrowing to cover deficit (comforting statistic).
The upper 10% of Americans pay 50% of FEDERAL INCOME TAXES. That is: half of 39% of the taxes collected by the FEDERAL GOVERNMENT. But do they pay half of ALL TAXES? Hardly, and those people mentioned above darn well know it.
In fact, Social Security taxes are capped at $105,000. SO, as I mentioned on other pages long ago, A persion making a million dollars per year actually pays .079%, while my son, who makes about $20,000 pays 7.5%, which is 10 times the rate rich guy pays. Say, Laura, is THIS a fair tax?
Sales taxes run about 7% on average. EVERYONE pays sales tax EQUALLY.
Property taxes - everyone pays the same rate.
The mantra of both was, quite accurately, that you can't continue to expect 10% of the population to pay for all of the costly welfare programs that the Obama Administration has passed or proposed (and yes, Obama Care is a welfare program, plain and simple). But by misstating the facts over and over, you create a false sense of the problem; and from my HOME PAGE on, the entire Sawyer Solution to our problems is predicated on this: If we are going to solve a problem, we first must identify what is causing that problem.
The problem isn't that we don't tax the rich enough as the 'Progressives' assert. Nor is the problem that the rich shoulder a disportionate share of the tax burden. The problem is that WE ALL pay too much in taxes, and governments spend too much. The solution to the problem is (simply):
CUT TAXES AND SPENDING
Now here's the Sawyer insight. The polarization of the two party system is, as usual, not the solution, but the problem. First, whatever one side offers the other side disagrees. Party first. For example: When Rush or Laura tell us that 10% (or 25, even) assume a large protion of the tax burden, they are correct. Their conclusions, however, are fallacious. To them it is unfair for a small segment of Americans to pay from their pockets for others who did not earn the benefits they receive - many of whom are third, fourth, fifth generation slackers who just don't see getting a job as a viable alternative. (see separate but unequal)
Liberals argue that it is unfair for a small segment of society to benefit so much while a large segment of society receives so little. The Obama/Pelosi/Reid crowd (themselves very rich) pass legislation to "level the playing field" or to permit "social justice."
SO WHO IS RIGHT AND WHO IS WRONG?
Both, actually. And this is where Madisons 'factions' work against the interests of the people that the members of those factions purport to represent (that's you and me, Broward County).
As I explained in detail (see jobs, jobs, jobs), it is vital for America to have a large middle class. After WWII with the worlds only surviving economy, and because of the new-found power of labor unions to provide a good living for workers, this country developed, for the first time, a large middle class. During the past three decades or so, however, we have been shipping these high-paying jobs overseas, where labor costs are much cheaper, and government regulation far less intrusive. We were told by the conservative factions that this brought cheaper prices for goods to the American consumer, and that cheaper prices were good.
Cheaper prices ARE good - but at what cost? On any given day you can shop at Walmart and mingle with middle America. Walmart, like almost all retail stores sells mostly goods made by foreign workers in foreign plants. Should one ask these customers if they are concerned that their purchases of foreign products is taking jobs away from American workers? No, those shoppers won't want to hear you noise - they are busy shopping.
Tell those shoppers on the day they or their spouse gets laid off from their job. Then they might understand. Not only do American workers lose good-paying jobs, but they also lose buying power. If the worker can't spend, he can't buy a computer, then those in the computer business, who may never have seen the inside of a factory, might get their pink slip. SMall business owners, their employees, professional people who provide services, EVERYONE suffers when workers get laid off.
For years the tax codes, political decisions, and a whole lot of other events over which the American people have little say, have combined to deprive us of our once- prevalent high standard of living. Our middle class, for which we all worked so hard since the 40's has all but disappeared. Welfare and other assistance, small but vital during the Great Depression, have become "entitlements" , upon which so many have become so addicted that it has robbed many, even for generations of families, the incentive to improve their lot in life. And the rest of America pays for the leisure of these slackers, with the approval of their enablers - the "Progressives."
Conservative politicians, have allowed our manufacturing jobs to go to China, India, Indonesia, Mexico, et al, in the name of "Free Trade" (click), and told us how "Free Trade" is so good for all of us. Of course it has been better for some of "all of us" than others. The average Congressman and Senator receives a bribe, oops . . . campaign contribution, of over one million dollars from Wall Street and manufacturers. Now, of course, "Free Trade" for Americans runs into an annual deficit of about $800 Billion Dollars:
Do the math: A manufacturing job pays, what, $40,000 per year? At $800 Billion in trade deficits (2006), that comes to 20 Million good jobs we have shipped overseas. This is free trade?
So who benefits from Free Trade? Well, the 10% of the people who pay 50% of the taxes so extolled by conservatives, and demeaned by progressives. And who takes it on the chin? The rest of us - the (ever diminishing 'Middle Class.'
But, like not seeing the forest for the trees, both progressives AND conservatives are right about the 10%. Progressives rightly see that our politicians have enabled fewer and fewer people to accumulate wealth in this country, and conservatives observe that this smaller segment pays most of the Income Taxes.
Squabbling over who pays more Income Taxes or what taxation is more fair or levels the playing field is an argument for coffee house gatherings and country club social functions. While our elected officials argue over these, mainly to access an advantage - that is to persuade you and me to vote for them is greatly taking their (myopic) eyes off the ball. The problem isn't who pays taxes; and the solution is not in adding new taxes.
The problem is that the middle class is disappearing in America, forever. The solution to the problem is to WORK TOGETHER to bring those jobs back to America - and to restore the middle class. On (Economics 101) page, I tell you exactly how President Sawyer would do it. But make no mistake about it: If your elected officials continue to stir up 'factions' for the sole purpose of getting themselves re-elected and for their party to maintain power, America will not recover. We can do it if we all put aside our differences, and work to make this a better country - and throw all of them out of office.