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Wednesday, October 14, 2009
Ed Feulner :: Townhall.com Columnist
Tax the Wealthy Even More? That's Rich
by Ed Feulner
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Your parents probably told you that you can’t get something for nothing. But your government is sending a very different message. For now, at least. The non-partisan Tax Policy Center recently released a report finding that almost half (47 percent) of American households will pay no income taxes this year. Many, in fact, will actually come out ahead in their dealings with the government, because they qualify for refundable tax breaks such as the earned income tax credit.

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This probably explains a Gallup poll from April which found that 48 percent of Americans said the amount they pay in federal income taxes is “about right.” Even the polling company was surprised by its findings. “Since 1956, there has been only one other time when a higher percentage of Americans said their taxes were about right -- in 2003, when 50 percent did so after two rounds of tax cuts under the Bush administration,” Gallup wrote.

But the finding makes sense. If you’re paying nothing, that probably does seem like a good deal. Even if it isn’t either fair or sustainable.

The federal government is trillions of dollars in the red. Yet as the percentage of taxpayers has dropped, the pace of federal spending has increased. Median household income has increased by a third since 1970. But federal spending has soared by 221 percent in that same timeframe -- almost nine times faster.

When government gives people cash and programs that cost more than they pay in taxes, most of them will favor ever bigger spending and more government. Who doesn’t love a “free lunch”? And, having had one today, who wouldn’t want one tomorrow, next month -- indeed, every day?

People bagging bargain-basement benefits will vote for candidates who promise even more extravagant “gifts”: more spending on education, more on roads, more on health care. And if the candidates promise to “tax the rich” to pay for all these benefits, so much the better, right? But, like the fabled goose that lays gold eggs, “the rich” are already doing more than their part.

Economist Curtis Dubay of The Heritage Foundation ran the numbers earlier this year. He found that in 2006, the top 20 percent of earners made 55.7 percent of all pre-tax income, up slightly from 54.8 percent in the year 2000. Yet at the same time, their share of federal income taxes increased from 81.2 percent to 86.3 percent. Continued...

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About The Author
Dr. Edwin Feulner is president of The Heritage Foundation, a Townhall.com Gold Partner, and co-author of Getting America Right: The True Conservative Values Our Nation Needs Today .
 
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Reality check.
My AGI and average earnings over the last couple decades puts me in the top marginal tax rates every single year. Up until Bush gave himself and Cheney a gigantic tax decrease, my marginal rates resulted in a tax burden of X. Under Bush, my tax burden was X-Y which amounts to Z. That amount, Z, was not used to invest in a new company, nor create jobs, nor for trickle down fantasies. In fact, while Bush let me have a free Z, he turned right around and spent us into a massive deficit which then just forced future generations to help pay for the thousands he gave me and others who make even more money than I do. One of these days you people will realize a simple truth. People at the top marginal rates, especially at these very low rates, could care less whether its 38, 36 or 32%, it makes virtually no difference in their lives at all. Ideologues will scream but in reality, taking home 500k instead of 530k means absolutely nothing to anyone in that bracket. Unless all of you plan on being gardeners, house boys or maids, my marginal savings under Bush is not going to employ any of you folks.

SAVE 70+% ON MORTGAGES... HERE'S HOW

SAVE 70+% ON MORTGAGES... HERE'S HOW

No longer being financially strapped and generating credit card indebtedness to make up the difference such can be totally prevented by no longer mandated to pay banks as much as 50% of net income for some 30+ years due to 'mortgage' payment requirements... and instead limit mortgage payments by law to no more than 10% of income (and for 10 instead of 30 years).

So doing would free up some 70+% of lifetime earnings and virtually eliminate the need for using credit cards any longer outside of emergencies.

So doing would also no longer necessitate the existence of our nation's Social Security Administration nor for that matter so much as IRA's or even 401K plans.

Now that's true investing you can bank on!!





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