Tax Articles

Let’s just break this down for you. The top 5% of wage earners in the country pay over
half of the federal income tax revenue taken in by the government. Does that seem
fair? The top 10% pay two thirds of the tax burden of this country. Basically, that
means that if 100 people are going to dinner, 10 of them have to pay for 64 dinners.
Sounds good if you’re one of the 64. What if you’re one of the 10? Ok, the top 50% of
wage earners pay 96% of the tax burden of our nation. That means those individuals
or couples filing jointly who earned $26,000 and up in 1999 carried 96% of the burden.
So the 50% of us who work hard, advance ourselves, and earn more money have to
pick up the tab for those who don’t? Really makes you want to succeed doesn’t it?
This is what is called a progressive tax. Sounds like Marxism to me.

What is the point of all this boring tax data? “Tax cuts for the wealthy.” How many
times have we heard the Democrats complaining about “tax cuts for the wealthy?” I’ve
heard it so many times I almost started to believe it until I did some research. “Tax
cuts favor the wealthy” is not an untrue statement. Which is why the Democrats use
this argument in the world of Politics. But it is the intellectually dishonest way in which
they say it that really gets under my skin. They create an atmosphere of class envy. As
if to say, “hate the rich because they have something you don’t, and they don’t need a
tax cut, they’re rich.” How many times have you seen a limo on the road and thought to
yourself, “must be nice.” This is the Democrat in all of us trying to get out. This is the
atmosphere the Democrats want to create because they claim to be the party for the
little guy, the party for the average American. This stance is not a politically stupid
stance to take, as the majority of people in this country are not wealthy. It is not stupid,
but it is dishonest.

They are absolutely correct in that tax cut do benefit the wealthy. That is because it is
the wealthy that pay the majority of the taxes, as the pie charts above show you. What
they don’t tell you is that tax cuts for the wealthy benefit all of us. Want to know why?
Then read on.

If they pay more, and there is a cut, they get to keep more of their money. A tax cut is
just that, the government is cutting the amount of taxes they take from your paycheck.
Obviously rich people make more money, so they stand to keep more money if there is
a tax cut. What’s so bad about that? The more money they keep, the more money they
spend. They more money they have, the more cars they buy. That helps the
autoworkers and the unions. The more money they have, the more times they go out
to dinner. That helps the waitresses who live on tips. That also helps the small
business owner, the restaurateur who serves the food. It is simple. The more money
they have, the more goods and services they buy. That helps every person who
supplies those goods and services; from the retailer of the goods, to the trucker who
delivered the goods, to the manufacturing company who made the goods, to the
factory worker that actually manufactured the goods. People make fun of trickle down
economics, but it works and that is absolutely true. John F. Kennedy believed in it in
1961 when he cut taxes. That’s right, a Democrat cut taxes. President Reagan knew
this when he cut taxes in the 80s.

If you think about everything we buy; the cars, the refrigerators, the grass seed, the
blue jeans, the lawn mowers, everything is made, bought, delivered and resold. And
when it’s resold, it is taxed again. So, not only the manufacturer of the lawn mower
gains, but the trucking company that delivered it, the oil company that sold the diesel to
the trucker, the person that is employed to unload the truck, the person that resold the
lawn mower to you and also the state you live in because most states have a sales tax
on almost everything you purchase. Oh by the way, the person that is employed to
unload the truck takes the money he earns unloading that truck and buys goods and
services as well. The trucking company that owns the truck that delivered the lawn
mower bought that truck from someone who built the truck and employs hundreds of
people. I know it seems confusing, but if you think about it, it is a beautiful cycle that
goes round and round and makes a living for millions of people. It is capitalism. And
like it or not, capitalism built this country and made it great.

Now, from a governmental standpoint, what is the beauty of this system? The more
money the rich people have, the more revenue the government will bring in. I know
that sounds crazy but think. Just think for yourself for a second. What is the one thing
in common that all of the people involved in getting you that lawn mower have in
common? Income taxes; they all have to pay income taxes. They all have jobs,
because you bought a lawn mower. They all have a job, so they all pay income taxes.
The more people that have jobs, the more income taxes are brought in by the federal
government. So the answer is simple, fewer taxes on the wealthy helps everyone
involved.

So the next time you hear the Democrats complaining about the “tax cuts for the
wealthy,” remember what you’ve learned here today. You remember that everybody
wins, when the wealthy people spend.