A popular socialist refrain in America demands the “rich pay their fair share,” but what exactly does that mean?
“Fair” is an ambiguous term that leaves too much room for interpretation, serving as a metric that allows the goalposts to be moved until the user is satisfied with the outcome. What is “fair” to one person may seem unfair to another, given its subjective nature, so it’s only right to look at more objective metrics.
To this end, Ted Jenkin penned an op-ed for Fox News revealing what top earners actually pay, according to the data.
“According to data from the Internal Revenue Service and the Tax Foundation, the top 1% of earners already pay roughly 40% or more of all federal income taxes. The top 10%? Closer to 70%. Meanwhile, nearly half of Americans pay little to no federal income tax each year,” he wrote. “So, when someone says the wealthy don’t pay enough, what they’re really saying is: It’s fair that lots of people pay zero and that they want the rich to pay even more than that share.”
But federal income tax isn’t the only way that earners pay, Jenkin noted.
“Live in high-tax states like California or New York, and you can add another 10%–14% on top of that federal number. Suddenly, you’re pushing toward a combined rate that rivals some European countries,” he pointed out.
For those who own homes, and especially those who own multiple homes, annual property taxes are a fairly significant expense.
“In states like New Jersey or Texas, property taxes can easily hit $10,000 to $30,000+ annually for higher-value homes. We are talking 1% to 2% of your home value beyond some states that have personal property taxes,” he added.
Another tax that everyone is familiar with is sales tax, which means the higher the item’s price, the more it is taxed.
“In places like Tennessee or Washington, combined sales taxes approach 10%. That’s post-income-tax money being taxed all over again. This sparks the great debate of a fair tax or having a VAT tax, or what some will call a consumption tax,” Jenkins writes.
Then there’s the capital gains tax for those who invest wisely, which impacts many higher-earners who have money in the stock market.
“Federal capital gains rates, plus the Net Investment Income Tax, can push you over 23.8%, before state taxes take another bite. This is after you tax after-tax money, invest it well, and then pay tax again. This also affects business owners who build their business for years and pay tax on distributable income all along the way, only to potentially be taxed at the highest marginal tax rate when they sell the business that created jobs for people for decades,” he explained.
And for those who are lucky enough to build up their wealth over the course of their life and want to pass it along after they’re gone, there’s the ever-classy estate tax. While this largely affects rich families, those are exactly the people that leftists think should be taxed more.
“Is “fair” when the top 1% pays 50% of all taxes? 60%? 80%? Does any politician who makes these outlandish statements have a real number? No. The reason? You can’t get blood from a stone from people who don’t pay at all right now,” Jenkins concluded. “We’re already operating in a system where such a small percentage of Americans fund the majority of government spending.”
So when you hear the likes of Sen. Bernie Sanders, I-Vermont, or Rep. Alexandria Ocasio-Cortez, D-New York, whining on and on about those who “don’t pay their fair share,” remember just how much of every dollar is taxed in the United States.
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Sierra Marlee is a millennial whose hunger for the truth in a world of fake news has led her to write. Marlee also contributes to BizPac Review.
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