In the Sunday April 9 Parade Magazine, I noted an answer that the famous brilliant Marilyn von Savant provided to a question in her ongoing column called “Ask Marilyn.” The question wasn’t one that tried to tap into Ms. von Savant’s legendary intelligence, but rather more of a data question. She was asked: What percent of the total amount of individual federal income taxes is paid by the wealthiest Americans?”
For her answer, she consulted Pew Research. Marilyn wrote the following:
In 2014, households with incomes of $250,000 or more accounted for 2.7 percent of the returns filed. Together, they paid about 51.6 percent of the $1.4 trillion in income tax the federal government collected that year. Their average tax rate was 25.7 percent.
Households with incomes below $50,000 accounted for 62.3 percent of the returns. Collectively, they paid about 5.7 percent of the total amount of income tax collected by the federal government. Their average tax rate was 4.3 percent.
I was surprised. Of course I hadn’t looked previously, but I would have guessed that they would have provided a lower percentage. If nothing else, as a fan of the Fair Tax, I have to admit that the rich people pay a high percentage of the total given to the government. But as I read and pondered, I was brought back to a key concept of the Founders of the country. No…I wasn’t thinking that we had rebelled against taxes, which some like to tout as if to say we should never pay any taxes. The Founders did not believe that, and from the first days of our government (the first one), the Articles of Confederation, citizens were paying taxes. No…it wasn’t an Income Tax (that’s another constitutional amendment we should repeal), but it was more taxes on goods just like the Fair Tax would be. Still, they paid taxes.
No…the thing the Founders held as a key concept was that you didn’t want to live with an empowered, strong central government. And, the way that you empower any government is by giving it money. Hence, the idea was to give the government as low amount of taxes as possible. Clearly, today, the amount we would need is far higher than in 1790. And, the percentage would be higher…meaning, we live in a different world with needs and issues that the Founders did not confront…and I personally believe there is a need for more taxes than the Founders would have asked for. I mean, Jefferson arrived as the Third President and set about slashing taxes and expenditures for the very point of eliminating the potential ill of the government having too much money…and thus too much power. Today, though, even if a Jefferson arrived to slash taxes and government spending, there are things at both the national and local levels that we need or expect the government to handle that weren’t true 200 years ago.
BUT…that being said, in all the consternation today about government and its roll, as the current leaders wrestle with spending, budget bills and healthcare plans, the fact that our government gets a lot of money from taxes is clear. And, I would offer that our problem isn’t that we don’t have enough money as a nation. Instead, we probably have too much that comes to the Federal Government. In that, the leaders of the past 50 years had used the money poorly, just as the Founders feared, to create programs or benefit certain classes of people living in certain districts or certain states. Along the way, the Federal government has grown increasingly more powerful…something most people note and usually don’t like. Yet, suggest cutting taxes and the whining begins quickly as the suggestion comes that we won’t have enough money to do things.
We have enough money. The Federal Government gets too much money. Like with many things, our issue is a spiritual one, something we don’t like to talk about. As a people, we are addicted to ease and luxury. We think things like the Internet, air conditioning, food provided at grocery stores or megaplexes showing the latest movies are necessities. As we race after more and more things, working longer hours to have money to buy things we don’t need (and as Tyler Durden said, “The things you own end up owning you.”), we lose sight of the fact that we are already rich.
Maybe the rich people should pay more. Actually, the Fair Tax crowd will tell you that under their plan, rich people WILL pay more because they always buy new things. But even under our current plan, maybe those making $250k need to cough up even more. It won’t make us happier as a nation. It won’t solve our issues. The issue isn’t “not enough money.” We are freaking rich as it is. Our issue is a spiritual one, and higher taxes won’t fix that.