Donald Trump released details of his tax plan and was immediately attacked for reducing tax rates and how the reductions benefit the rich. The myopic vision of the media is consistent with an agenda to blame current economic woes on the wealthy instead of the incompetent people running the government. There is no mention of job creation and benefits to all income levels when tax rates are lowered.
The concerns of many in the liberal media and Washington D.C. focus on the wealthy not paying their fair share of taxes. They believe the government leviathan is morally obligated to tax (confiscate) the wealthy and redistribute to the less fortunate. In government speak, it is known as income inequality and repeated often enough creates division among the citizenry. The ultimate goal is pitting the haves against the have nots and continuing to convince the have nots that they will benefit from the rich paying more taxes. There continues to be a large segment of the population dependent on government aid after decades of wealth redistribution through taxation, but the narrative continues unchallenged. The consequence of this strategy is an elected politician entrenched for life in Washington D.C. where he becomes wealthy and joins the ranks of those he publicly vilifies.
The latest statistics from the IRS -2011 do not support the current story endorsed by those who believe in higher taxes for the wealthy. The current tax code penalizes those who work hard and invest in businesses at great financial risk. Many businesses would hire more people if the tax burden and regulations did not put a stranglehold on running a business in this country. My purpose in writing this article is to explain the hypocrisy exhibited by those who continue to claim the rich do not pay their fair share of taxes. The article below details the percentage of taxes paid by those in different income brackets. I will illustrate the unfairness of the tax code and its impact on job creation.
The top 1 percent ( $380,354) earned 19 percent of the total income and paid 35 percent of the federal income tax. The average of the five most recently reported years (2007-2011) is closer to 40 percent. The top 10 percent ($113,799) pay 66 percent of all taxes collected. The bottom 50 percent, all Americans with an income below $51,939 (median income), pay 3 percent of the federal income tax. According to a recent study by the Tax Foundation, the federal income tax is one of the most progressive tax systems in the world, because it raises tax rates as personal income increases. Under the current tax code, business owners and their employees are rewarded for hard work with crippling taxes. Never is the sacrifice, investment, and risk of the business owner mentioned when discussing income inequality. The business owner pays personal and business taxes. Employees earn a salary, pay taxes, and spend their earnings on goods and services in the community. Communities thrive when there is a strong economic base created by new businesses and a demand from residents for their services.
Raising tax rates on the rich has a negative effect on small and medium sized businesses by impacting hiring and growth. Many people are unemployed because of the onerous tax burden placed on businesses. No growth equals high unemployment. The government can not fix economic problems caused by their policies, tax codes, and regulations. This cycle creates a downward spiral that ends with closed businesses and desolate communities. Detroit is a text book example of government ineptitude.
There would be no businesses and jobs without the wealthy because neither of the two are created by poor people. The taxes paid by the wealthy and working people are what enables the government to create an entitlement mentality that spawns a dependency class. The constant drum beat of tax the wealthy hurts the middle class and poor. It is time to understand that this country needs jobs to get people back to work and untangled from dependency on government. This can only occur with people who have the resources (wealthy) and are willing to take risks in creating new businesses.