Tax System Balance Needed : Many Pay Nothing

Divide and conquer - this is the agenda of the Obama administration to get votes from those that are less fortunate or just less willing to work hard or innovate to get what they want.

Mr Obama likes to tell the 'unwilling' that they deserve more from those that have more without having to produce anything. All they have to do is vote for him and he will see to it that the 'productive' in our society share their good fortunes with everyone else that is less fortunate.

How do you think this will turn out when those that are more fortunate, read this as smarter and more innovative, see their personal good fortunes stripped away and given to people that don't care enough to extend themselves beyond the ordinary to get what they want?

The go-getter's in our society won't just stand around waiting to be bent over for the sake of others less willing to sacrifice to move forward. They are where they are because they won't stand for being robbed of their personal fortunes.

The U.S. Tax System: Who Really Pays?
Source: Stephen Moore, "The U.S. Tax System: Who Really Pays?" Manhattan Institute, August 2012.

August 30, 2012
It is a common misconception in the United States that the tax code needs to be changed so that the rich pay more in taxes. Several factors fuel this myth, and policymakers are quick to act on them. Several popular arguments about tax rates are broken down and responded to by Stephen Moore, a senior economics writer for the Wall Street Journal Editorial Board.

•The main argument is that the rich need to be taxed more to make things more fair. However, the top 10 percent of tax filers make up 45 percent of the total federal taxes paid.
•Many argue that the rich pay less in income taxes than they did 50 years ago. But in 2007, the top 10 percent contributed 71 percent of all personal income-tax revenue whereas the bottom 50 percent, earning 12 percent, only contributed to 3 percent of the tax revenue.
•Tax cuts do not take from the poor and give to the rich. Tax cuts incentivize people and businesses to innovate and propose new ideas, which create more opportunities for those who are not in the top tax bracket.
•Some argue that the budget deficit is because of low tax rates. However, the Bush tax cuts, for example, increased revenues by $786 billion, which added more jobs and wealth into the economy.

•Fewer Americans are paying taxes at all. The Tax Foundation found that nearly 42 percent of Americans that filed tax returns ended up not paying any taxes.
•Proponents of changing the tax code argue the 15 percent tax on investment income is too low. However, 54 percent of Americans own stock and therefore benefit from the lower tax rate. Similarly, the tax rate is low in order to spur continued investment and reward people for their risks.
•Likewise, a higher capital-gains rate, as many argue for, would be counterproductive. The real tax rate on corporate income paid to individuals through capital gains is not 15 percent but close to 40 percent.

In a debate that is muddled with numbers, it is important to look at the facts of how the tax code is fair in the status quo. It is easy for policymakers to make attractive claims of wealth equality during tough economic times, but the data show that the wealthy are contributing to a significant amount of the tax revenue and will continue to do so.