Aren't the Rich Already Being Taxed to Help the Poor?

On Jan. 6, The Dispatch-Argus ran an article headlined, "Tax the rich to help the poor." But since the Great Depression, hasn't the federal government been doing just that?

In 2016, IRS published data concerning 2014 federal income tax collections showed 139,562,034 taxpayers filed 2014 individual (as opposed to corporate) federal returns, and paid $1,374,379,000,000 in federal income taxes. They included:

-- 139,562,034 taxpayers, the top 1 percent paid $542,640,000,000 - 39.48 percent;

-- 6,978,102 taxpayers, the top 5 percent paid $824,153,000,000 - 59.98 percent;

-- 13,956,203 taxpayers, the top 10 percent paid $974,124,000,000 - 70.88 percent;

-- 34,890,509 taxpayers, the top 25 percent paid $1,192,679,000,000 - 86.78 percent;

-- 69,781,107 taxpayers, the top 50 percent paid $1,336,637,000,000 - 97.25 percent; and

-- 69,781,017, the bottom 50 percent paid $37,740,000,000 or 2.75 percent of all individual federal income taxes paid.

Imagine the plight of the bottom 50 percent, if the top 50 percent didn't exist, or if the top half paid no taxes. There would have been $1.336 trillion less revenue in individual federal income taxes. That would have increased the 2014 deficit from $483 billion to $1,819 billion.

In 2014, U.S. military spending was $800 billion, pensions, $914 billion; health care, $921 billion; welfare, $370 billion; transportation, $92 billion; interest, $229 billion, etc. The $37.7 billion paid by the bottom 50 percent, would not have covered 50 percent of a single one of those expenses!

Without the top 50 percent, there would have been no money for defense, health care, transportation, interest, and only $37 billion on welfare costs of $370 billion. That $370 billion for welfare is 10 times more than the bottom 50 percent paid in federal income taxes.

In 2014, the Census Bureau reported the numbers of Americans who received welfare, i.e., participated in means tested programs in 2012, included:

-- 82,679,000, Medicaid.

-- 51,471,000, food stamps

-- 22,526,000, Women, Infants and Children programs,

-- 20,355,000, SSI

-- 13,267,000 lived in public housing or received housing subsidies.

-- 5,442,000 Temporary Assistance to Needy Families


-- 4,517,000 others received some other form of federal cash assistance.

And the poor also benefit from roads, bridges, courthouses, and a strong military.

Somebody paid, and it wasn't the 50 percent taxpayers who paid 2.75 percent of all individual federal income taxes.

So, when the top 10 percent of all taxpayers -- incomes over $133,445 -- pay 70.88 percent of all federal income taxes, how much more must they pay to be deemed righteous? Fair? Doesn't a wage-earner with a wife and two children have a right to spend the greatest part of his $150,000 earnings on his own family?

And when 25 percent of all taxpayers -- over $77,714 -- pay 86.78 percent of federal income taxes, how much more must they pay to be deemed fair? Doesn't that wage-earner with a wife and two children have the same right to spend the bulk of his $80,000 earnings on his own family? Or is it just those with incomes over $542,640 paying 39.48 percent of all federal income taxes who aren't being fair?

Do the math. If 100 million Americans are receiving some share of the $37 billion in welfare benefits, is it fair to cry "tax the rich to help the poor?" Aren't the top 50 percent already carrying 97.25 percent of the burden?

If the top 1 percent -- incomes over $542,640 -- had been required to pay at a 50 percent rate, they would have paid $687,189,500,000, rather than the $542,640,000,000 they paid at 39.48 percent in 2014. That would have generated an additional $144.5 billion in revenues, more than enough to relieve the entire bottom 50 percent from paying the $37.5 billion they paid.

Clearly, the poor who are disabled or otherwise in genuine need can't be expected to pay taxes. But they are only a part of the bottom 50 percent.

So, would it be fair for the other part of the bottom 50 percent to claim all the benefits of citizenship while paying no income taxes? To demand his neighbor pay more? Should fairness not require that they at least pay the "widow's mite?" Is that 2.75 percent?

Fairness to some degree is in the eye of the beholder.

Posted: QCOline.com January 25, 2018
Copyright 2018, John Donald O'Shea