Marc Lamont Hill, an Associate Professor at Teachers College, Columbia University recently said on the O’Reilly Factor that “Right now the wrong people are paying taxes, so a wealth tax would target people who may not have a ton of income but have substantial wealth….that would probably make the tax burden of most Americans lower.” Mr. Hill, Paul Krugman, Warren Buffet and many other folks have been perpetuating the myth that the selfishly rich have rigged the system by transferring the tax burden from themselves to the middle class and the poor. I will leave it to the reader to judge whether they are simply misinformed or if they are up to something else.
The following tax statistics were gathered directly from the IRS’ own website, so no spin from me here. They are for 2009, the most recent year with available data. The facts show that the top 1% of earners, who on average had an adjusted gross income of $960,000, paid 37% of all federal income taxes. The top 5% of earners paid 59% of all federal income taxes. The top 10% of earners, who averaged $245,000 in earnings, paid 70% of all federal income taxes. The top 25% of earners paid 87% of all federal income taxes, and the top 50% of earners paid 98% of all federal income taxes. In contrast, the bottom 50% of wage earners paid only 2% of all federal income taxes. (Source: http://www.irs.gov/pub/irs-soi/09inratesnap.pdf ).
These figures speak for themselves and prove that the popular claim that the “wrong people” (meaning the poor and middle class) pay the bulk of federal taxes or that the rich do not pay their “fair share” is just utterly ridiculous. The people perpetuating this myth should be embarrassed. As a wise lawyer once said, “facts are stubborn things.”
This brings me around to the real issue. The U.S. government is heading towards financial bankruptcy. When countries like Japan and China stop lending us money because they decide we are a bad risk the U. S. Treasury will stop sending out checks every month and there will be enormous human suffering in this country. The problem cannot be solved by raising taxes on “rich people.” The problem is spending. We must reduce federal spending. That is the only answer. That means everything must be cut. If we don’t reduce the size and scope of the federal government the coming fiscal implosion will make the financial crisis of 2008 seem like small peanuts.
(Note: If you are one of those people who thinks that all Federal spending is essential, you are not paying attention. Washington wastes a lot of taxpayer money. We’ll give you several examples in a future post.)