Investor’s Business Daily on the “two Americas”:
As reported by Congress’ Joint Economic Committee, the richer half of the American population pays almost 97% of income taxes. And most of that — 54% — is paid by those in the top 5%. Those ranked in the top 1% — the richest of the rich — pay more than 34% of all personal income taxes collected by Uncle Sam.
What’s more, the Congressional Budget Office last month found that the after-tax income of those “superrich” actually declined after the Bush tax cuts by 8.3% from 2000 to 2004.
Hand in hand with these trends, about 14 million Americans at lower incomes have been removed from the federal income tax rolls since 2000 because of the earned income tax credit and the per-child tax credit.
“John Edwards actually got it right,” Tax Foundation President Scott Hodge told IBD. “There are two Americas: a taxpaying America and a non-taxpaying America.” That means the recent increases in tax burden are actually understated for those still paying income taxes.
Despite this, Democrats in Congress are paving the way to raise taxes yet again. “The rich” need to pay their “fair share,” the argument goes. But I wonder: what exactly is a fair share? If I pay 40% of my income in taxes, is that fair? What about 50% or 75%?
No matter how much “the rich” pay—and according to the tax code, “the rich” includes plenty of middle class people—the taxers never seem satisfied.
This country was founded on the notion that it is immoral to tax people without giving them a say in how the government is run. Yet today, 14 million Americans are receiving representation without paying any taxes, while 50% of the population pays 97% of the taxes. That means there are 14 million free-riders who have a vote that enables them to call for taxes to be raised on everyone else.
There’s an old saying that simple democracy is three wolves and a sheep voting on what to have for dinner. That’s why individual liberty is an important component of true freedom; it prevents tyranny of the majority.
The founders rightly decided that taxation without representation is unjust. But is representation without taxation any less unjust?
Update: The problem of tax free-riders is worse than the report above indicates.
