How to Really Tax the Rich
There is much that occurs in Washington that irritates — and irritates mightily.
One of my pet peeves is how welfare statists greedy for extra taxpayer money to spend loudly denounce as greedy anyone who doesn’t want to surrender more of his or her money to the greedy, grasping interest groups surrounding Capitol Hill. And when a tax cut is miraculously passed, it is denounced as a tax cut “for the rich” if people who earn more get more back.
Of course, the whole purpose of a tax cut is to cut taxes, which means you have to pay something to get something back. That shouldn’t be too complicated a concept to grasp. Except in Washington!
A corollary is that a fair tax cut will provide more money back for people who pay more in taxes. Thus, the tax cut that is fairest is precisely the one that benefits “the rich,” since “the rich” pay so much more in taxes.
As the Wall Street Journal recently explained:
It’s almost an article of faith on Capitol Hill these days that the Bush tax cuts tilted the income tax system in favor of the rich. If this were true, it would be reflected in the actual data on the distribution of the income tax.
For the Bush tax cuts to have been a give-away to the rich, people paying the higher marginal tax rates would have to be carrying a smaller share of the income tax load. But the IRS data indicate that they are not paying less. Instead, they are paying more — lots more. More surprisingly, the richest 1%, 5% and 10% of the taxpayers are shouldering a larger percentage of the income tax burden at the federal level than the tax estimators said they would had the Bush tax cuts never materialized. The data nearby tell the story.
The preliminary 2005 data just released from the Treasury Department show more of the same. The amount of tax paid by those earning more than $1 million a year increased to $236 billion in 2005, up from $132 billion in 2003, the year of the tax cut. This was a 78% increase in taxes paid by millionaire households.
Given how badly the Left wants to make the rich pay more in taxes, they really should be in favor of tax cuts. That seems to be the most effective way to increase government’s burden on the well to do!