Dissecting the Liberal Talking Points: The Wealthy Pay for the Infrastructure Already!

It's been a favorite liberal point for a while now: "It's justified to raise taxes on the wealthy because they benefit most from government paid for infrastructure, etc. with their businesses." President Obama made a similar claim recently when he said that businesses who succeeded didn't really deserve the credit, because they used public roads, bridges, etc.

I touched on the gaping hole in this logic yesterday, but let's dive into it more. Here's the problem:

THE WEALTHY PAY MORE IN TAXES IN ALL FORMS!

Let's look at some of the primary types of taxes, shall we? First of all, there are income taxes. People who make more income, whether under a flat tax system or a graduated income tax system pay more money in taxes. Under a flat tax (for the sake of argument let's say 15%) a person who makes $20,000 in income pays $3000 in taxes before deductions and credits. A person who earns $200,000 per year in income pays $30,000 in taxes before deductions and credits. (For those of you from Palm Beach County, FL, $30,000 is more than $3,000.)

Then we could consider our national graduated income taxes. The person making $20,000 per year is in the 10% tax bracket. That means they are paying, before deductions and credits, $2000 in taxes. The Person making $20,000 per year is in the 35% federal tax bracket. They are paying $75,000 in taxes before before deductions and credits. (For those of you from Palm Beach County, FL, $75,000 is more than $20,000.)

So, even if we except your erroneous logic, that evil, wealthy business owner is already paying a significantly larger amount of money into the community infrastructure pot.

Then there are the other two main sorts of taxes that come into play when it comes to infrastructure: Sales Tax and Property Tax. Now if a person making $200,000 spends say 80% of their income and saves 20%, that means $160,000 is spent. The lion's share of purchases with that money will be subject to sales tax. Let's even pretend another 20% of that money is spent on products like food and clothing that are sales tax exempt. We're now at $120,000 of income being taxes on sales. So let's take the sales tax I pay here in New York State of 8%. That means this person is pay $9,600 per year in sales tax. (That's in addition to what they pay in state and federal income taxes).

Now let's pretend our $20,000 per year person similarly saves 20% of their income and spends an additional 20% on tax-exempt products like food and clothing. So that means $12,000 of their spending annually is subject to sales tax. Again, at the 8% rate I pay in New York, that person is paying $960 per year in sales tax.

(For those of you from Palm Beach County, FL, $9,600 a year is more than $960 a year.)

So again, this person is paying significantly more than his counterpart (ten times as much, to be specific) of his working class counterpart. Now property taxes. I hope I don't need to give an object lesson to explain that the property taxes are significantly higher on a ten bedroom mansion sitting on seven acres of lake-front property has higher property taxes than a 3 bedroom ranch on half an acre of land in a suburban neighborhood.

Here's the bottom line: These evil, horrible wealthy people who President Obama wants to see punished for their success are already paying their "fair share." Even if they are consuming more public works and services, they are also paying significantly more in taxes than their working class counterpart. No matter how you slice it, the stock liberal logic does not hold water. Ultimately, it comes back to this: the Left wants to confiscate more of other people's money so they can keep spending and spending, and they're trying to give you a road to rationalize it. End of story.

Dissecting Obama's Rhetoric: If You Succeed, It's Not Because of You

That's what the President is claiming, anyway. "It's really everyone else's work that made you succeed...you had to use public roads and so forth, ergo, you get no credit...so you pay more taxes." (That's a rough translation for those of us with brains.)

In the interest of fairness, the President said "you didn't do it on your own." His implication is that somehow businesses are nothing if it wasn't for all the wonderful things government does, you couldn't succeed. Now I'm not going to sit here and tell you that that roads and police departments aren't helpful for success in business. I also know that there have been businesses long before such things existed.

Furthermore, the implication by the President is that "since you've succeeded, you OWE US more in taxes." Here's the problem, where good old fashioned logic comes and rains on President Obama's parade again: THE PEOPLE WHO OWN BUSINESSES ALREADY PAY TAXES. As a matter of fact, they pay taxes out of proportion to their percentage of the population. The only way to rationalize it is based on the invented number of "percent of wealth consumed," which treats an individual's fiscal property as owned by everyone.

The real fact is this: business owners, who make up a significant portion of the top 10% of wage earners, already pay the lion's share of the tax burden. Remember, the top 10% pays more than 70% of the tax burden. So even if they made their money using public infrastructure, they're also paying 7 times their "fair share" of the tax burden.  No matter how you slice it, Obama is wrong.

Moreover, what the President seems to believe is that government is an independent entity. He believes government has money that belongs to government (rather than being a steward of taxpayer money.) He believes government can somehow should be an active force instead of a restraint against infringement on people's rights. What he fails to understand is that we have government "of the people, by the people. and for the people." The very same successful business owners pay into the tax pot. Then they reap the benefits, but friends, they are already paying into the community fund. The concept that they are somehow more liable to pay even more than the seven times their share they already pay is preposterous and a phantom of the liberal imagination.

Really what it boils down to is the more the President can convince people that you didn't really earn your money, the easier it is for him to convince you that it's ok to confiscate the money of a wealthy person and pay for his liberal spending...to pretend that we have a revenue problem instead of what we actually have: a spending problem.