Tax Policy
I was recently reading a set of comments on Facebook in regards to the "super-rich" "big business" paying their "fair share" of taxes. Usually I let such things roll by without comment, but in this case I was feeling particularly pedantic and annoyed by the use of fuzzy terms, so I wrote a response. I am also posting that response here.
Two observations - first, why doesn't anyone in there discussions ever define "fair"? I expect everyone has pretty diverse opinions on just what fair means. In terms of the income tax, in 2008 the top 1% of wage earners paid about 38% of all income taxes and earned about 20% of all income. In other words, they paid approximately double the "average" income tax payment. (And that is an actual paid amount, not a doubled tax rate.) Further, in 2007 the wealthiest 1% held 34.6 of all wealth. So how much of a higher percentage of their income should the "super-rich" pay? 50%? 75%? We tried 91% until the Kennedy administration, when he cut the highest rate substantially to 70% (as well as cutting other rates) and we saw tax revenues go up for the next for years. So certainly, the rich *could* pay more, but at what point do they stop being people and start becoming turnips to be squeezed by the public for monetary juices?
Second observation - corporate taxes. It is a common misconception that corporations pay taxes. While they transfer money to the government in the form of something we call "corporate income tax", that money actually comes from their customers. It doesn't come from the owners and/or shareholders, because their return is set by economic conditions and if it is "cut" to much by income taxes their money moves to another corporation that does better, either here or overseas. No, a company gets the money to pay taxes by raising prices on customer and consumers. So rather than sheltering low income people from taxes, the corporate income tax actually (and regressively!) adds to their tax burden because purchasing the necessities of life consume a proportionally higher percentage of their total incomes.