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Are the Rich Paying
Enough in Taxes?

June 1, 2015

In a recent video editorial, business newsman, Neil Cavuto, asked “Think the Rich Pay Their Fair Share?  Think again.”   But he didn’t mean this the way most people think!

In past years, taxes for the rich changed significantly.  There was the new increased rate; 39.%.  As Cavuto said, that’s still not enough, so let’s add the 10+% surtaxes for the un”Affordable Health Care Act bringing the overall tax rate closer to 44%.  But this still isn’t enough, so let’s add the limited write off recently codified to the tax code which brings the rates closer to 47%. 

Then, Cavuto continued, let’s add state taxes plus house taxes bringing the total closer to 55%.  But apparently that still isn’t enough.  A few weeks ago, Bernie Sanders (I/D-VT) proposes a 50 cents tax for each 100 dollar trade value for stocks, bonds, and other capital entities.    How much tax would that make?  Do the math!  Trillions of dollars in trades are made each year.   Each of these changes comes with the question “Are the rich paying enough?”  Some on the left are now talking about taking going as high as a rate of 90% and think we still have a long ways to go.  Meanwhile, none of these people are talking about cutting spending, none of them! 

How practical is the belief that the rich can pay it.  2011 Tax payer information -- a period before these changes -- is an interesting comparison.  The tax rate for the top percent’s averaged between 15-20% and paid approximately one half of the total federal taxes.  The overall average tax rate ranged between 12-14% with approximately 50% of the United States tax payers paying nothing.  The total income of the top tax payers was about a trillion.  When state, local, property tax, the Health Care Act taxes are added, the real tax rate is currently moving closer to double what it was a few years ago.  Now think about this, if they paid all their income in taxes, they couldn’t be close the trillion dollar deficits we are seeing.   

Economic studies show the incentive to produce additional income comes to a screeching halt when tax rates reach over 30%. For the rich we have passed that marker and it still isn’t enough.      

Last week in Austin, hearings were held before the Senate State Affairs Committee on HJR 77.  This is a resolution calling for a Constitutional Convention.  There were those who favored having Texas join the growing number of states that have already done this and there were those who opposed doing so.  But the common agreement between both sides of this debate is that something needed to be done, and done now, to halt the veracious appetite of those in Congress and to stop the spending of money we don’t have.  It was a clear consensus that Congress would not do so by itself and many contended the several states needed to hold Congress’ feet to the fire and require a balanced budget.  But there are two ways to balance a budget; one is to stop spending the other is to raise taxes.  Increasing taxes isn’t working.  Maybe we should start cutting spending!

Mark, Bill and John