Who really pays the taxes?
Nothing seems to get me more riled up than the constant class warfare rhetoric spouted by liberals and Democrats on an almost daily basis.
Especially Barack Hussein Obama and his rants about “tax cuts for the rich” or how we all have to “share the pain” and so forth.
Even Fox News talking heads don’t seem to be able even to counter arguments favoring tax increases on “the wealthiest among us.”
Sunday’s Fox News Sunday had Juan Williams spouting his drivel about how the rich should be paying more since they can afford it.
Let’s face the fact that America has become divided between a growing class of people who pay little or no income taxes and a shrinking class of people who are bearing the lion’s share of the burden.
In addition to these non-payers, roughly 15 million individuals and families earned some income last year but not enough to be required to file a tax return.
When these non-filers are added to the non-payers, they add up to 57.5 million income-earning people who will be paying no income taxes.
Even 57.5 million is probably not the real number of people because one tax return often reports several people.
When all of the dependents of these income-producers are counted, roughly 120 million Americans – 40 percent of the U.S. population – are not paying any federal income taxes.
So, despite the charges of critics that the tax cuts enacted in 2001, 2003 and 2004 favored the “rich,” these cuts actually reduced the tax burden of low- and middle-income taxpayers and shifted the tax burden onto wealthier taxpayers.
Tax Foundation economists estimate that for tax year 2004, a record 42.5 million Americans who filed a tax return (one-third of the 131 million returns filed last year) had no tax liability after they took advantage of their credits and deductions.
Millions more paid next to nothing.
The latest data clearly show the biggest portion of the federal tax burden is shouldered by a small group of the very wealthiest Americans.
The wealthiest 1 percent of the population earn 19 percent of the income but pay 38 percent of the income tax.
The top 10 percent of earners pay 70 percent of the tab while the bottom 50 percent – those below the median income level –now earn 13 percent of the income but pay just 2.7 percent of the taxes.
But didn’t the Bush tax cuts favor the rich? Not exactly.
When we compare the taxes paid under the old system with those paid after the Bush tax cuts, the rich are now actually paying a higher proportion of income taxes.
IRS data show an increase of more than $100 billion in tax payments by the wealthy in 2005 alone. The total taxes paid by these millionaire households rose by about 80 percent in two years, from $132 billion to $236 billion.
Those tax cuts did not put more of the burden on the backs of the middle class and the poor.
Americans did respond to the tax cuts.
There was more investment, more hiring by businesses and a stronger stock market all of which led to increased revenue to the federal government because of the incentive.
Over the last several decades lower tax rates have actually made the system more progressive and taxes paid by the wealthy have increased.
In 1980 the top 5 percent of income earners paid only 37 percent of all income taxes, while today that same top 5 percent pay a whopping 58 percent.
One final note. Businesses don’t pay taxes, yet we continually hear a hue and cry to raise their taxes. Here’s the reason. It’s simple economics.
For a business to remain in business it must make a profit. What is the basic definition of profit? It’s income less expenses and taxes.
So, a business is merely a conduit for taxes, passing along its tax obligation to its customers who ultimately pay the taxes.
So, when you hear someone shouting to increase the taxes on business just consider how ignorant they are and realize they are simply hollering for a tax increase for YOU.
Those who ultimately bear the burden of business taxes are the customers and workers of corporations, and they more often than not aren’t rich.
So, feeling overtaxed? After all, April 15 just passed.