Can the Rich Afford More Taxes?

October 8, 2008

How much more of the enourmous tax burden can the high income earners pay? There are obvious negative effect to taxing producers more. These are the high producers in our society. They are the ones that create the jobs for everyone else. If we continue to take their capital for excessive and wasteful government spending, how can they use their capital to create jobs? The answer, they can not do both.

There was a good op-ed piece in yesterdays Wall Street Journal, The Rich Pay Their Fair Share – They would still shoulder the burden under the McCain plan by Andrew Biggs and Kent Smetters.

Currently the top 20% of earners in this country pay 67% of all federal taxes (including income taxes, payroll taxes, corporate taxes and death taxes). The top 1% of earners pay 26% of all federal taxes. Under McCain’s proposal, the top 20% would actually pay a greater share of total federal taxes and the top 1% would remain virtually unchanged.

One of the problems we have in this country is that accurate journalism is dead. Every journalist is always trying to push his or her agenda. Despite the fact that top earners bare the vast majority of the federal taxes paid in this country, a 2007 Gallup poll found that 66% of Americans believe upper-income people pay too little federal income taxes. The vast majority of Americans actually believe that the middle class bears the tax burden while the wealthy get of paying very little. How can this be? As I said before, unbiased journalism is dead.

Based on the op-ed piece in the Wall Street Journal, “the McCain proposal would maintain current income tax rates and lower corporate taxes to help American businesses — which ultimately provide American jobs and pay American wages — compete in a global economy. By contrast, the Obama plan would increase marginal income tax rates on high earners and raise taxes on capital gains and dividends, with the likely effect of contracting labor supply, reducing rewards for saving, and increasing incentives to avoid taxes. All but the very lowest income Americans would face higher marginal tax rates under the Obama plan than the McCain proposal.”

Also, I would like to point out that there is little difference in the two candidates plans for lower income Americans – despite what the media reports. Always keep in mind that they are slanting things toward their point of view. See my prior post on the Number of Taxpayers Decreasing Dramatically. Currently, the lower 33% of Americans pay no Federal Income taxes. According to The Tax Foundation, Obama and McCain’s plans will increase nonpayers to 44% and 43%, respectively.

As I have said before, the answer is not more revenue for the government. The problem is that government spending on all levels is way out of control. We can not afford to keep wasting billions and billions of dollars and expect to survive by taking the money from the job creators in this country to pay for it.

Donna Bordeaux, CPA with Calculated Moves

Creativity and CPAs don’t generally go together.  Most people think of CPAs as nerdy accountants who can’t talk with people.  Well, it’s time to break that stereotype.  Lively, friendly, and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna and Chad Bordeaux.  They have over 50 years of combined experience as entrepreneurial CPAs.  They’ve owned businesses and helped business owners exceed their wildest dreams.   They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.