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The Reality of Taxation

July 25, 2012 in Economics 101, Politics

In this or any other heated political season, “Make them pay their fair share!” becomes a deafening roar… The throng is growing louder and louder… but the premise lying at i’s core is a fallacy.  It has nothing to do with sound governmental policy, it is class warfare that preys on misinformation and misunderstanding.  Plain and simple.  I believe one major key to getting past the ill-conceived rhetoric and misplaced venom, is understanding.
First, we must all understand that No One believes that the rich should not pay a higher tax rate than the poor or middle class.  THEY SHOULD!
The real issue, is NOT should the “rich” pay more or be taxed at a higher rate… The issue is CAN and SHOULD they really be taxed more?
An intelliegent opinion requires a minmal understanding of current tax policy and the actual repercussions of the proposed change in policy.
If one feels their taxes should go up… the question becomes, why?  To what purpose?  What societal benefit is to be serviced?  Is it to punish them for having more?  I would hope not. Do we believe it will actually help the country?
If the goal is punishment, that constitutes little more than theft and obviously not a reasonble position.
If it’s because it will help the country climb out of the black hole of debt our politicians have created, I would be 100% on board with that decision… BUT IT WON’T!  Simple math proves this.
Hear are a few little known FACTS.
1. The top 5% of earners already pay over 50% of all federal taxes.  Most that yell “fair share” are not aware of this or fact 2 or 3.
2. The top 20% of earners pay almost 70% of all federal taxes.
3. The BOTTOM 43% pay ZERO taxes and the bottom 50% pay almost ZERO federal taxes.
Based on the facts… If one is truly concerned about the rich paying their “fair share“, I don’t think a tax INCREASE would be the conclusion or policy of most.  It would be hard to make argument that they don’t already do so.
Even if we took it ALLeverything!…  It just wouldn’t wouldn’t help!  The solution is not higher taxes… it’s lower spending.  It’s called math. SPENDING vs TAXES are so out of balance that If…
The government imposed a 100% tax on people making over $250K
AND confiscated ALL last year’s profits of ALL Fortune 500 companies
AND TOOK ALL assets of the top 400 billionaires…
This massive confiscatory taxing policy would still only fund our government for 8 months!
And then who would they tax?  Who’s left?  TAXES ARE NOT THE SOLUTION!
SEE http://allsolutionsnetwork.org/blog/economics-how-much-do-you-owe-uncle-sam/#more-82 The fact is that NO amount of tax increases on the “rich” can solve or even improve our nations deficit.  IT IS MATHEMATICAL IMPOSSIBILITY. The only REALISTIC option we have is to get spending under control.  PERIOD.
Our politicians may be corrupt… but they are not stupid.  Any politician that denies this simple fact, is simply lying and engaging in class warfare as a path to re-election and power.

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4 responses to The Reality of Taxation

  1. I had some idea of this.

    But you did clear it up.

    All levels of government are imposing more taxes.

    If you are paying for anything that the government provides, that is a direct or indirect tax.

    If you earn 240k a year and have to give 50% of it to the government, how would you feel?

    When you know that it will go to the hands of corrupted people, they will enjoy your hard earned money!

    We have to control spending, not to continue tax increases and/or taxing everything that exists.

    There are cities where you have to pay for almost any service that the government provides you.

    And at present, government services are becoming crap.

    Welfare, health, Social Security, pensions accounts, education, all of these are a disaster and the government is receiving trillions of dollars in all kinds of direct and indirect taxes (government earnings).

    If the problem is solved with tax increase, this would had solved all the government problems many years ago.

    STOP SPENDING!!!!!!!!

    All the world is in this financial crisis, but I think that the Europe Union and the United States (State Union) are the worst.

    The USA is becoming the world's poorest country.

    After the November 2012 US presidential elections are over we will see the financial disaster that the US is in!

    It's like the 2012 movie: it will be a reality for the USA, but not in water covering the country, deep debt will cover the world's once upon a time most powerful Nation.

    Hopefully, I will be wrong. I don't want this to happen.

    But it's unavoidable, powerful people in all areas are doing their best for this horrible reality to really happen.

    Everybody will suffer. Even the super rich.

    Probably, the military will the best to survive, by violent martial law imposition.

    I don't want this to happen, but I can't avoid it. I don't have the power.

    Everybody is in a warfare trying to benefit without thinking on a joint venture (jv) for a win-win partnership.

    Politicians, worker unions, super rich, warefare recipients, the misinformed (billions), etc…..

    Each pulling stupidily towards their side.

    Each wants more: higher raises and benefits, not understanding that this can't be supported anymore.

    We have to return to our basics: rational living, not emotional histeria.

    Emotions govern over reason, and that's why we are doomed.

    We will return to the middle ages, the obscure ages, mediaval period.

    But this time it won't be a part of Europe, this time is a worldwide experience.

    Hopefully, I am completely wrong.


    The US government gave several trillions of dollars to US bank CEO's to help them survive bankruptcy.

    Will all those trillions of $$$$ they still are going belly up.

    That bailout should have gone to the millions of families that lost their homes, thank you to banks' CEO's corruption.

    Real salvation:

    US federal government gives bailout to families that lost their home because banks tricked them with the bubble house mortgages.

    The families would have paid their homes with the money, and then would pay back US federal government.

    The bailout could had been through low or no-interest loans.

    The families would recover their homes.

    The banks would recover their cash.

    The government would recover the bailout.

    Everybody would had won.

    Win-win for everybody.

    This would had brought a more stable economy to the country.

    When you think of everybody benefitting, things go better.


    In my country political power takes turn almost every eight (8) years between two political parties.

    Elections are every four years, the same date as US presidential elections.

    One of these political parties concentrates on lowering government spending.

    They concentrate mainly, on helping the poor get a better quality of life.

    That political party when it wins elections millions of dollars are spent on improvement programs for poor families.

    The politicians of this political party try to spend less than what the treasury department receives in direct and indirect taxes.

    But voters keep throwing the political party out of power. on almost every two elections, almost when the state financial situation starts to stabilize.

    Voters believe what the other political party tells them: produce more programs, even if they are a waste of revenues, mega projects that ultimately benefit only a few.

    They are selling all the government programs to private parties.

    You can't sell Education, Health, and Welfare government programs to rich people, they need profits and those sections serve mostly the poor, and the poor don't produce profits, they need constant inputs of cash.

    Because of selling government programs to private parties has made a disaster of the Social Security program.

    Voters have to understand that you have to run the government as a business: you can't spend more than your income, and you have to save in preparedness for disastrous-emergency situations.

    But voters think that politicians are magicians and that they will always have a way to provide for their voters or else lose their political positions.

    When the squandering political party wins elections and start making disastrous decisions, then voters vote for the other party to correct things.

    In 1976, a year after New York Cite went bankrupted, the well meaning party governor preached that if the condition continued as it was going through the country would become ungovernable. That we had to cut back on spending. To administrate the government with good judgement.

    Voters voted against them.

    This preaching was repeated every elections, and voters kept voting against it.

    The other political party have had most of its politicians and administrators gone through legal problems: many in jail (most federal), arrested, in investigation, corruption suspicion, wrong management of government funds, etc….

    And voters keep voting for them.

    Voters haven't understand that the time has come to reconsider all those misconceptions.

    Corrupted politicians are the results of voters electing them. Election after elections.

    To Save Our Country voters have to change their mindset.

    That's it!

    • I wish I didn't agree… but I do.
      People usually vote what they believe is in their best interest. That is simple human nature. Not good, not bad… it just is. A government check is usually perceived as in their interest. I however think that in many instances, it is a drug.

      I firmly believe in taking care of the poor and the needy. But it has become too easy to get on the government dole and once on it, it's often like a drug that becomes an addiction. That check now belongs to US, we want it, we need it… It is our RIGHT! Again, just human nature. Some people actually turn down jobs because it can affect their government check. So they stay poor and don't even attempt to work or progress. Instead of the pursuit of excellence, their lives become focused on protecting, poverty. Not only is there NO incentive, there is actually a dis-incentive for productivity… Why bother if we can get paid for watching Oprah?

      Understand, the above is not a blanket statement. I do not for a second believe that this describes most of our dependent citizens that are truly in need. But there are so many that "milk" the system that it is harder and harder to take care of those that actually do need it.

      And… Where are those checks coming from? From you, from me and their neighbors!

      There is a limit. Remember, GOVERNMENT CAN GIVE NOTHING THAT IT DIDN'T FIRST TAKE FROM SOMEONE ELSE. We are rapidly reaching a point from which there is nothing or no one left from which to take. When that happens… and it appears to be coming sooner rather than later, what do we have? Greece!

      Like Greece, there will come a point, at which, there is nothing left to take, nothing left to give and those that now feel that their government check is a personal "right" will riot in the streets because the government is no longer "willing: to "pay" them "their money". It is happening now and can happen here.

      This is not a hypothetical, we have watched it unfold in Greece. If we don't get this under control, we will face the same thing.

      This is not a partisan article or political statement. It is a simple mathematical statement of fact. Government can't give without taking first, and we are rapidly approaching the point where we are trying to GIVE more than there is to TAKE!

      We have to get it under control.

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