Well, first of all, we have to look behind the rhetoric. The "rich" they talk about is anyone who makes over 250K a year (for now--under the Clinton
administration, that yardstick kept dropping lower and lower as they tried to justify expanding taxes). That is not wealthy. That is you higher wage
earners: doctors, lawyers, many high ranking government employees, MBA's, entertainers, journalists, small business owners, and even some of the
skilled trades. Calling them "rich" is just a means to appeal to the lowest common denominators.
When it comes to the higher wage earners, they already pay more than their fair share:
Wealthy Americans earn about 50 percent of all income but pay nearly 70 percent of the federal tax burden, according to the latest analysis Tuesday by
the Congressional Budget Office — though the agency said the very richest have seen their share of taxes fall the last few years.
CBO looked at 2007 through 2009 and found the bottom 20 percent of American earners paid just three-tenths of a percent of the total tax burden, while
the richest 20 percent paid 67.9 percent of taxes.
The top 1 percent, who President Obama has made a target during the presidential campaign, earns 13.4 percent of all pre-tax income, but paid 22.3
percent of taxes in 2009, CBO said. But that share was down 4.4 percentage points from 2007, CBO said in a finding likely to bolster Mr. Obama’s
calls for them to pay more by letting the Bush-era tax cuts expire.
The big losers over the last few years were the rest of the well-off, especially those in the top fifth, who saw their tax burdens go up.
Read more: CBO: The wealthy pay 70 percent of taxes - Washington Times
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THe fact of the matter is, with our progressive tax system, the higher income earners pay much more than anyone else already, both in marginal rates
and in actual dollars put into the system.
Most people do not realize that income and dividends are taxed differently and this is where some of the confusion and falsehoods about the wealthy
paying a lower rate than the poor. It's nonsense and it's comparing apples to kumquats. The highest dividend rate is kept low to encourage
investment. If it was not, those with money would sit on it and not send it out to invest in stocks, businesses, start-ups, and so forth. They would
keep the money in savings or government bonds or in a can in the back yard rather than keep it circulating in the economy. A low dividend tax rate is
a good thing: it improves the economy by keeping capital out there working.
Now, it may be easy for the class warriors to push for a raise in the dividend tax, but that would harm the middle class. Have a retirement account?
401K? Sell your house at a profit instead of a loss? Gain 3% on your savings account? All that is considered dividends for taxation purposes and all
would be harmed by increasing the dividend tax rate.
A better answer would be to completely trash our 20k page tax code. Stop using taxes as a tool for social engineering, do away with all loopholes and
deductions, and have a low flat tax rate that EVERYBODY pays regardless.
Either that, or do away with income tax alltogether and go with a national sales tax. I like this idea better as you can adjust your tax burdon by how
muxh you consume. LIfe frugally and don't buy a new car this year? You pay less in tax. Buy a yacht and a second home? Then you pay more tax.