Time to Go Out and Eat

With the incoming Congress and new majority, the debate other than Trump investigations seems to revolve around taxes and what is fair (they conveniently “forget” to talk about the spend). There is a certain amount of confusion about the perception of ownership and who really does what.

One viewpoint says we are all in this together, and certain lucky individuals happen to control much of our collective money and by all means they should be willing to share.  Another viewpoint is what I have earned is mine, and you can kindly keep your fat little fingers off of it.  Others spend a little time on both sides of the argument, and change their positions depending upon how the topic at hand directly impacts them leading to “what’s mine is mine and what’s yours is mine.”

We all have opinions about right and wrong based on whatever“it” is and what “it” means to us.  I once saw a blog article quoting an old story – I’ve never heard of it before, but that doesn’t mean anything – and I’ll try to get right in this post: there is a college senior complaining to his Dad about the Dad not wanting to share the wealth with other folks. This went on for some time, because the child thought it was fair, etc.  The Dad then asked his son if he would be willing to give up his 3.8 GPA and settle for a 2.8 and give the grade points to some of his party-hard fraternity brothers so they could get their 1.0 GPA up to a 2.0 and have enough grade points to get their degree.  The son was floored at the thought of the long hours of studying he had done and having to give that up, especially considering all of the sacrifices he had made over the years.  The Dad replied back with, “me too.”

The current and continuing dialogue (it’s really not a dialogue and appears to be a one-sided conversation) of the “rich” not doing their fair share and we need to remove the recently-enacted tax cuts deserves a wee bit of perspective.  We seem to have a conflicted debate about taxes, rising to a fever pitch, when people argue for tax refunds equal to the “rich,” when 50% of Americans never paid any Federal taxes in the first place; this takes entitlement to an entirely new level.

I’m not against paying my “fair share” of taxes.  I just want two things in return: quit wasting my money on pork and other frivolous stuff, and everyone should pay Federal taxes so that they have skin in the game.  Maybe the outflow will be reduced as the portion of Americans who don’t pay Federal taxes will complain about all of the waste once they have to start paying for things like the $61 million we gave to China or the $19 million we gave to Russia in fiscal year 2016.  I doubt it.

Does anyone besides me think it is just dumb to borrow money via our deficit spending just to give it away to the Chinese and Russians?

If you’ve read this far, let’s go over the mathematics of taxation.  It’s pretty easy and you can jump to your own conclusions about fairness and who pays what.  The IRS data I was able to find was available up to 2014:

  • The top 1% of earners earned 20.6% of all of the income in 2014; this group includes the super-wealthy, and the top 1% is defined as a family earning more than $465,626 per year.  They also paid 39.5% of Federal taxes. 
  • The top 10% of earners earned 47.2% of all of the income; the top 10% is defined as a family earning more than $133,445 per year.  They also paid 70.9% of Federal taxes.  To put this in perspective, assume you are a member of this group and go into a restaurant with 100 people.  When it comes time to leave, you will pay your bill plus the bill of six other people who did not come to the restaurant with you.  You will do this every single day, whether you went to eat at the restaurant or not: the restaurant will conveniently send you a bill.
  • The top 50% of earners earned 88.7% of the income, and paid 97.3% of all Federal taxes. 
  • The bottom 50% of earners pay just 3.5% of the Federal tax bill.

Does that really seem fair to you?  You had better hope more people don’t want to go out to dinner.

 

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