from the outside, one would think that the poor are left to rot. perhaps they are, but it's not our tax policy that's causing it. what ever happened to "ask not what your country can do for you?"
Far from 'favoring the rich,' as many believe, our tax code is massively redistributionist, sending literally trillions of dollars into low-income homes and far less into wealthy homes. This may be good or bad, depending on your point of view, but the fact is it's happening. And those who argue that recent tax cuts 'benefit the rich' ignore the reality.
A new study by the Tax Foundation shows the extent of the redistribution. The lowest-earning one-fifth of households, it says, get about $8.21 in total government spending for each dollar of taxes paid. Households deemed 'middle income' get $1.30 in return for every dollar sent to Washington. The rich get back 40 cents.
Looking at both taxes and spending in a representative year — 2004 — the study found an estimated $1.03 trillion to $1.53 trillion was 'redistributed downward' from the two highest-earning income quintiles. That's a lot of redistribution.
Today, some 44 million Americans pay no taxes at all. Meanwhile, the upper 5% of all income earners in 2004 paid 57.13% of all taxes, up from 35.01% in 1980. In other words, the U.S. tax code is becoming more progressive, not less.
No one minds helping the truly needy. But as with welfare in the pre-1996 reform era, reliance on government can become a habit — imposing huge costs on our national economy.
Worse, a 'what's in it for me?' attitude seems increasingly the norm. Once a nation of stoic, self-reliant individualists, America now seems full of people who think other taxpayers owe them something. They see the 'system' as a giant cow to be milked — and damn the cow.
This is backed up by polling data. In a 1994 Pew poll, 57% agreed with the statement 'Government should care for those who can't care for themselves.' Today, it's 69%.
It's sad enough when a nation punishes its most productive citizens and rewards the least productive. But the real shame is that there are so many myths about taxes and poverty we can't even have an honest discussion about it.
27 March 2007
soak the rich!
Mark Perry put me onto an article in Investor's Business Daily that pulls apart the myth of "the wealthiest 1%" BS we've been hearing about for yonks from Gorekerryedwardsclintonobama. all that lip service tries to create a common foe that is The Rich in order to form a zombie army of pitchfork- and torch-wielding peasants to storm the gates of inequality.