Tax The Rich? 14 Facts You May Want To Consider25/04/2011 18:40
By Michael Snyder - BLN Contributing Writer
Class warfare in the United States is heating up again. As the overall economic pie shrinks, the poor are being taught to go after the rich and the rich are being taught that the poor are a threat. Lately, the calls to “tax the rich” have grown louder than ever. As thousands more American families fall into poverty every single day, and as U.S. government debt continues to soar, many are touting higher taxes on the wealthy as the solution to all of our problems. But is that what we really want to do? Will it actually solve our economic and financial problems as a nation? If you don’t have much money, it can sound very appealing when politicians say that they want to “tax the rich”. But unfortunately, things are just not that simple.
First of all, the ultra-wealthy and the largest corporations have become masters at avoiding taxes altogether.
You want to tax the rich?
How about General Electric?
They are rich, right?
They are also very, very tight with the Obama administration.
So of course they are more than happy to pay their “fair share” of taxes, right?
General Electric made over 14 billion dollars in profits last year but did not pay a single penny of that to the U.S. Treasury.
The ultra-rich simply are not going to be taxed into oblivion. They will do whatever it takes to avoid high tax rates.
In fact, it is estimated that a third of all the wealth in the world is now held in “offshore” tax havens.
The truth is that our tax system is completely and totally broken.
Raising or lowering tax rates is not going to make much of a difference at all to the ultra-wealthy and the largest corporations.
But raising taxes on the “wealthy” will absolutely hammer small businesses in the United States.
And small businesses provide the vast majority of the new jobs.
Small businesses don’t have the resources to set up shell companies in the Cayman Islands or in Switzerland. Small businesses cannot afford to pay hundreds of thousands of dollars in legal fees to tax lawyers.
So when you raise taxes on the rich, the ultra-wealthy and the largest corporations are generally not affected but you absolutely crush small businesses.
When you crush small businesses you crush job growth in this country.
If you wanted to truly “tax the rich”, you would need to completely throw out our current tax system and come up with something completely and totally different.
And actually, when you get right down to it, an income tax is not even needed to run our country. Until 1913 the United States did just fine without a federal income tax.
But Americans have gotten it into their heads that the government should be some kind of cosmic Robin Hood that takes money from the rich and distributes it to the poor.
What such a system does is it takes the incentive to make money away from the rich (because they don’t get to keep their money) and it takes the incentive to make money away from the poor (because they can just sit on their couches and collect government checks every month).
Such a system makes us all poorer because it produces less economic wealth overall.
Not that income inequality hasn’t become a massive problem in our society. In fact, income inequality is now higher than it ever has been in America.
According to a new report from the AFL-CIO, the average CEO made 343 times more money than the average American did last year.
But you don’t solve that by taxing the rich and giving government handouts to the poor.
Rather, the solution is to change the rules of the game so that money and financial power does not become so concentrated in the hands of just a few. Our founding fathers intended for all Americans to be able to start businesses and compete. They never intended for gigantic mega-corporations to dominate everything.
The American people need jobs and they need the chance to be able to start businesses and compete fairly in the marketplace.
But instead, a huge percentage of the population has just given up and have become content with receiving government handouts.
You see, the truth is that most Americans now receive a government payout in one form or another and they have become very accustomed to that money.
People do not want to see their “government benefits” cut.
According to one recent poll, 78% of Americans oppose spending cuts to Medicare and 69% of Americans oppose spending cuts to Medicaid.
Most Americans will get very angry if you start coming after their government checks.
Today there are more than 44 million Americans on food stamps. Many that go on food stamps stay on them forever.
In fact, the truth is that most Americans will stay on social welfare programs as long as they can.
Not that many of these programs aren’t necessary. We have an economy that does not produce enough jobs for everyone and that is pushing more American families below the poverty line every single day. The average American family is being absolutely shredded by this economy.
But when you organize a society in such a way that a majority can vote for the wealth of the minority to be transferred into their pockets you are asking for trouble.
If you raise taxes on the rich and give more handouts to the poor is that going to provide them with jobs?
If you raise taxes on the rich and give more handouts to the poor is that going to give them dignity?
If you raise taxes on the rich and give more handouts to the poor is that going to create more businesses and spur more economic activity?
Yes, we always need to help the poor and those that cannot help themselves.
However, what we have created is an “entitlement society” where the majority of Americans now receive direct payments of money from the government.
As millions more Americans climb aboard the “safety net” each year, it is eventually going to get to the point where all of this government welfare is going to destroy this nation financially.
But our politicians love the current tax system.
For one thing, it gives them the ability to exert tremendous social control over the rest of us.
And since most of our politicians are control freaks, they absolutely love to engage in social engineering.
Is there a behavior that they don’t like?
They just tax it.
Is there a behavior that they want to promote?
They just give us a tax break for it.
The rest of us end up running around like chickens with our heads cut off as we attempt to play the little social control games that they have constructed for us.
Americans spend billions of hours and tens of billions of dollars preparing their taxes every single year.
It is a tremendous waste of time and resources.
But most of you already know that.
So should we tax the rich more? Will it fix all of our national money problems?
Of course not.
The truth is that we are taxed more than enough already.
The following are 14 statistics about taxation in the United States for you all to consider….
#1 The top 1 percent of all income earners already pay 39.5 percent of all federal income taxes.
#2 When you take all forms of federal taxation into account, the top 1 percent of all income earners pay 28.1 percent of all federal taxes.
#3 The top 20 percent of all income earners in the United States payapproximately 86 percent of all federal income taxes.
#4 One recent poll found that 64 percent of Americans are in favor of raising taxes on those that make $250,000 or more a year in order to help balance the federal budget deficit. Another recent poll found that 72 percent of Americans favor raising taxes on those making $250,000 or more a year.
#5 Approximately 45 percent of all U.S. households pay absolutely no income taxes at all.
#6 Overall, U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes. This is clearly not anywhere close to sustainable.
#7 During 2010, the U.S. government paid out a combined $2.3 trillion in unemployment benefits, Social Security benefits, disability insurance, Medicare benefits, Medicaid benefits, benefits for veterans, education assistance and other direct transfers of cash from the government to individual citizens.
#8 59 percent of all Americans now receive a government payout of one form or another.
#9 The ultra-wealthy keep much of their wealth outside of the United States so that the government cannot tax it. It has been estimated that a third of all thewealth in the world is held in “offshore” banks.
#10 Thanks to new corporate tax cuts in Japan, the United States now has thehighest corporate tax rate in the developed world.
#11 Large corporations have become masters at avoiding taxes. Back in the 1950s, corporate taxes accounted for about 30 percent of all federal revenue, but in 2009 corporate taxes accounted for just 6.6 percent.
#12 General Electric has been a great friend to the Obama administration.According to the New York Times, General Electric made a total of 14.2 billion dollars in profits last year. So how much did they pay in taxes to the U.S. Treasury? According to the New York Times, not one penny was paid.
#13 Even though Boeing receives billions in federal subsidies every year and even though it has a bunch of juicy government contracts it did not pay a single penny in federal corporate income taxes from 2008 to 2010.
#14 Exxon-Mobil paid $15 billion in taxes in 2009, but not a single penny went to the U.S. government. Meanwhile, their CEO brought in over 29 million dollars in total compensation that year.
Unfortunately, the friction between the rich and the poor in this country is only going to get worse. As the U.S. economy crumbles and slowly dies, average Americans are going to get angrier and angrier. Millions are going to want to take their frustrations out on the wealthy.
In the years ahead things are going to become frightening. Eventually we are going to see economic riots all over the nation. As hunger and poverty abound, scores of homes in wealthy neighborhoods and middle class neighborhoods will be invaded and looted.
We are going to see things happen in the United States that we have never seen before and that very few people imagined that we would ever see. The people of the United States are not going to suffer through the coming economic nightmare with dignity and quiet determination.
Instead, there is going to be rampant rioting, violence and looting.
Rather than loving each other and working together to rebuild America, the people of this nation are being taught to hate one another and attack one another.
If you truly wanted to spread the wealth, you would want to change our system so that it promotes small businesses and the creation of jobs inside the United States.
But instead, our current system crushes small businesses, it ships jobs out of the United States and it greatly rewards the ultra-wealthy and the large corporations that know how to evade federal taxes almost completely.
So does anyone out there want to defend our current system and explain why taxes should be raised even more? I have a feeling that some of you do. Please feel free to leave a comment with your opinion below….