Here’s the breakdown on where the burden of income taxation falls in the U.S., according to the IRS:
Bruce Bartlett reports on todays National Center for Policy Analysis website that high- and pretty-high income earners?5 percent of the income tax payers? are providing about 54 percent of all income tax dollars collected in the U.S. The top 10 percent of income earners supply about two thirds of all income tax dollars collected, leaving 90 percent of taxpayers to supply one third of the total income tax receipts. Effective tax rates, Bartlett points out, can be lower.
Those who want to increase the tax burden on “the rich” should consider for a moment just what “the rich” are up to with all that booty:
For example, whom do we suppose all those rich folks are hiring when they go out and spend their money? only other rich folks? Does Oprah Winfrey hire Tom Cruise or Bruce Springsteen to mow her lawn, thus validating the maxim “the rich get richer?” Of course not.
Even diamond-studded lingerie (ouch!), that sells for a few million bucks requires low and semi-skilled labor somewhere during the production process. No one needs this stuff, but there’s nothing wrong with creating it, along with the market-wage jobs and designer-wage jobs that wouldn’t otherwise exist.
Besides, creating stupid underwear for Versacci (let’s say) is probably a better resume item than a gig in a Playtex factory when you’re out looking for your next job in the clothing industry.
The demand for frivolous products is still a real demand, and like it or not, frivolous products create paying jobs in the market just as well as any other products. What will the purveyors of these decadent items do with all thier loot? Hire more people to come up with uniquely outlandish ideas, I suppose. After all, Target and K-Mart will have knock-offs of the originals on the racks within weeks?more jobs!
We can limit job creation, wealth creation, and income earning ability by taking dollars away from the people with the greatest ability to spend, invest, and take risks?the wealthy. That is what raising tax rates would do: prevent people willing to take risks and create jobs from pursuing that goal. Higher income taxes on the “wealthy” are counterproductive for everyone.
Tax policy in the coming administration (whose ever it is) will not benefit from class warfare. No one wins with higher taxes. On the contrary, as Bartlett argues so well, everyone wins if we reduce taxes on all who pay them.
