Tax the rich, please!
Last week in a letter to the editor, someone argued that the rich already pay their fair share of taxes. In his argument, he gave some statistics from the IRS. Though his statistics were all true, they only tell part of the story. This, in turn, should cause us to reflect further on his conclusion — which is far from true.
While it is true that the wealthiest 1% of Americans pay about 38.2% of the federal income tax in 2008, that same 1% of the population owned over 42% of the financial wealth in the United States. The next 4% own about 29% of the financial wealth, the next 5% own about 11% of the financial wealth, the next 10% own about 10% of the financial wealth, and the bottom 80% are left with about 7% of the financial wealth.
The author also gave statistics about what tax rates people paid in relation to their income. Conveniently, though, he only focused on income taxes. If we include sales taxes and property taxes paid to make our governments work, we see a very different picture. According to the Minnesota Department of Revenue, in Minnesota those making over $447,889 per year pay about 9% of their income in taxes while those making less than $9,872 pay about 22% of their income in taxes.
Finally, Marx didn’t argue for a “progressive” tax in the Communist Manifesto. Marx was a socialist who argued for the elimination of private property. To lump progressivism with socialism is a fallacy designed to put progressivism in a negative light before one examines the facts.
Before we draw any conclusions about who pays what and who should pay what, we need to take a holistic picture of the facts – not just a picture of those facts which support our positions.