The 24 Democrats running for president are all outbidding one another to earn the votes of Democrat primary voters. Based on the give-aways, you’d be forgiven for thinking they’re buying rather than earning votes.
They’ve each supported literally trillions in new spending. And they’ve each glommed onto one idea they claim will pay for all that new spending. It’s become their common slogan, “Tax the rich.” Likewise, each parrots the other in one rationale why their “tax the rich” mantra is justified. “Make them pay their fair share.”
That all sounds pretty good, doesn’t it? Of course, the rich should pay their fair share. So far, so good.
The problem arises, however, when they define what that “fair share” should be. Elizabeth Warren of Pocahontas fame says a tax rate of 90% sounds about right. Bernie and NYC Mayor de Blasio suggest a rate they believe “more reasonable,” which is more than 80% but less than 90%. So far, all the Democrats agree the rich should pay substantially more than they pay now.
That the Democrats say these things without contributing any real information to the discussion would be malfeasance in any occupation other than politics. They provoke passion without logic, offering not one objective fact upon which reason could be based. Driven to its final conclusion, the passions evoked by Democrats suggest we not just tax the rich, but skewer them and eat them.
So let’s have an honest discussion about taxes and who pays them. I’m using data courtesy of the non-partisan Tax Foundation.
Sure the top 1% make almost 20% of the income earned in America. But they also pay 37% of all the taxes. More to the point though, their share of total earned income in the U.S. is a little less than 20% of all earned income, about $1.97 trillion. Bottom line, you could take every cent they earn and it wouldn’t come close to paying for the Democrats' so-called 'Medicare for All' plan which is clocked to cost around $3 trillion per year.
So let’s go deeper. The top 10% earn about 47% of all the income earned in America, or almost $5 trillion. So let’s say you took all $5 trillion of that income. Keeping in mind they already pay about 70% of all federal income taxes (about $1 trillion,) taking all their income only nets you about $4 trillion annually. That’s enough to pay for the Medicare for All plan, and a few other ideas, but it doesn’t make a scratch in paying for the Green New Deal, guaranteed minimum income, or many of the other pricey proposals suggested by Democrats.
So let’s dig deeper still. Let’s say we took every nickel earned by the top 50% of taxpayers. That would come to about $9 trillion. Again, we have to factor in the fact that they already pay 97% of total federal income tax collected, so that means the net gain to the federal coffers would be about $7.5 trillion.
Now you’re talking real money. With $7.5 trillion you could get your Medicare For All program, “free” college, and even a modest guaranteed annual income. Or you could skip all those programs and put the money toward paying for your Green New Deal. But you still can’t pay for it all.
And, you can’t do it for more than one year. Why? Because if you take 100% from taxpayers — or for that matter, the 80% plus that Democrats suggest we should take — people will stop working. Or they’ll shelter their money in lower tax investments. Or they’ll send it overseas somewhere taxes are lower.
If they’re business owners, they’ll close the business and fire the employees. Or they’ll take their business to a lower tax country and hire people there. The same if they’re investors.
The truth is that the top 10% - the “rich” people Democrats want to skewer - make on average only about 4 or 5 times more money than those in the bottom 50%; but they contribute 25 times more to the amount collected in federal income taxes.
But even that understates their contribution. A country’s economic well-being isn’t defined by taxes collected, but by the potential for growth, opportunity, and prosperity.
And it’s those 10% who own over 95% of the businesses that make it possible for the other 90% of the workforce to earn a livable wage. They’re the job creators, the investors, and the innovators who make our economy tick.
Then there are those in the Democrat Party who suggest we shouldn’t worry whether that kind of taxing and spending is sustainable. Alexandria Ocasio-Cortez suggested we just print the money needed to pay for all her spending ideas — an estimated $100 trillion over the next 10 years.
She and her mindless allies have no clue what would happen if you just dumped $100 trillion into the system: KA BOOM!!
Decades ago, I happened to be a guest on the floor of the California State Senate when Senator Roberti gave a speech in the chamber about taxes. I’ll never forget one of the lines he uttered, “And look how much of their pay checks we allow them to keep.” That line has always stuck with me because it’s exactly the attitude of the Democrats now running for the White House.
They believe your money is their money, and that they’re infinitely more qualified to decide how it should be spent than you are.
Of course the flip side of this sad state is that if Democrats were even partially successful making any of this happen, and exchanging the American economy for one that looks more like Venezuela’s, they’d pretty much destroy any chance of being re-elected again for a couple of generations.
Or, we could just skip all that pain and reject their lunacy now. Set aside the rich as a preferred entree, and instead encourage in every person the desire to become wealthy — morally, spiritually, emotionally, and not inconsequentially, materially. Now, that’s real wealth.