All of which made it that much more difficult to appreciate my freedom to listen, as Senator Joe Biden explained that he and Barack “want to take money” from those earning more than $250,000 per year and “put it back in the pocket of middle-class people.” It is time, he says, “…to be patriotic...time to jump in, time to be part of the deal, time to help get America out of the rut.”
Now, I know it is easy to target what is, today, a small minority of Americans. But, Lord have mercy. Whether you earn, or will ever earn $250,000 per year, the notion that your government will redistribute the incomes, of any one of us, exceeds the boundaries of simple partisan politics and, despite the populist conventional wisdom, goes right for the jugular vein of the American dream we all share.
And Senator Biden, just so you know, more often than not, the households earning more than $250,000 per year are the very ones who have “jumped in” to help get America “out of the rut”. They are the same folks who develop new businesses and create jobs so that folks can provide for their families. They are the same ones who are responsible for paying about the same amount of federal individual income taxes as the bottom 95% of tax returns, even though they only makeup 1% of all tax returns, not to mention they also make up the greatest percentage of charitable giving, including endowments to universities and hospitals.
And before too many dismiss this issue as only affecting the “rich”, you should know that if your household’s adjusted gross income is $62,068 or greater, you earn 67.5% of the nation’s income, but you pay more than four out of every five dollars collected by the federal income tax (86%).
Today, the households being targeted are those earning $250,000 per year. But, it’s a slippery slope. In five years, will it be households earning $62,068 per year? Not to mention that targeting high wage earners is like the fox guarding the henhouse, with the same disastrous results. This is because two-thirds of economic activity in America is generated by households in the top 20 percent of income -- those making at least $150,000 a year. This accounts for about 40 percent of overall consumer spending…spending that creates new jobs.
In fact, annually, the top 20 percent of households spend almost five times as much as the bottom 20 percent and more per year than the bottom 60 percent combined.
This isn’t about defending the “rich”, but for those folks who really want to “stick it to the man”, the most effective way for you to soak the “rich” is to support more tax cuts, not tax increases. Historically, tax cuts result in a ballooning of tax revenue for the federal government.
Yes, it is true. Beginning with the roll back of the Clinton tax increases in 2003, the taxes paid by millionaire households increased from $136 billion in 2003 to $274 billion in 2006. So, if you are already in the business of redistributing incomes, wouldn’t lower taxes and increased tax revenue be better for us all?
If taxes were raised to the level Barack is advocating, tax revenues will fall, just as they did during the Carter administration when the tax rates were as high as Barack is proposing. Back then, the “rich” paid only 19% of all income taxes. Today, they pay nearly 40% of all income taxes.
When Joe Biden tells us that it is patriotic to redistribute YOUR income, he minimizes the sacrifices, failures, and successes of every American that has ever worked a second job to further their education or worked longer hours to gain experience in their trade or profession, or started a business in their garage, or who wakes up early and goes to bed late to keep a good paying job or earn a promotion within their company. We should not begrudge those households that earn $250,000 per year. We should celebrate them. They are a living embodiment of the American dream.
It was Thomas Jefferson that said, “A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned -- this is the sum of good government.” This is a principle that is as true today, as it was in 1801, regardless of the “Johnny come lately” conventional wisdom and populist pandering of any political party.
Louis R. Avallone is a Louisiana native, attorney and small business employer in the construction industry from Shreveport. He can be contacted at email@example.com