Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at thinking, intelligent individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

02 November 2008

Larry Elder: In Defense of "The Rich"

Larry Elder wrote an excellent article entitled "In Defense of 'The Rich'". Now, in recommending this article, I will make full disclosure: I have two sisters whose family income certainly puts them in the top 5 percent of incomes and may even be eligible for Obama's soak the rich taxes supposedly only to be directed at those with incomes above $250,000/year. Of course, I fully expect him and the Democrats already in complete control of Congress to plead that circumstances have changed after the election and that they have no choice but to soak those with incomes above $150,000 or above $120,000/year. Biden has already floated the $150,000 boundary and other prominent Democrats favor the $120,000 limit.

So, what are the main points that Larry Elder makes?
  • The top 5% of income-earners (those making $153,542/year or more) pay 60% of all federal income taxes. The top 1% of earners (those making more than $388,806/year) pay 40% of all income taxes.
  • A poll found that 36% of the people thought the rich pay 10% or less, 15% thought they paid between 10 and 20%, and 10% thought they paid between 20 and 30% of income taxes. Only 12% thought the rich paid 40% or more of income taxes.
  • A poll of Democratic National Convention delegates found that the average of what they wanted the rich to pay was 25.6% of their income. (The tax rate for income above $32,551 is already 25% in 2008 and it is higher than 25.6% for income above $78,851 which is taxed at a 28% rate. Above $357,701 the tax rate is 35%. Obama promises to raise the rate for those above $250,000/year.)
  • Those who do not now pay federal income taxes, tend to favor large federal programs which will help them, while those who pay income taxes tend to oppose those programs even when they will receive some benefits from them. Specifically, non-payers favor Obama's health plan, favor raising federal income taxes in the highest tax bracket from 35% to 54%, and want to raise Social Security taxes by 4% for any individual or business making more than $250,000/year.
  • Liberal families earn about 6% more than conservative families, but conservative families donate about 30% more to charity than do liberal families. Even removing that part of conservative charity giving for religion, they give much more to charity in money and their time than do liberals.
  • President Bush and VP Cheney give 18% and 5.5% of their income to charities. Between 2000 and 2004, when Obama and his wife made between $200,000 and $300,000 they gave less than 1% to charity. In 2007, with an income of $4.2 million, they gave 5% to charity. Biden and his wife made $319,853 in 2007 and gave 0.3% of their income to charity. Over the past 10 years, the Bidens gave only 0.1% of their income to charities.
So, a myth is widely believed that the rich pay little in income taxes. Democratic National Convention delegates believe tax rates are much lower than they are. Those making no contribution to the cost of federal programs tend to favor more programs that benefit them. Compassionate liberals give little to charities, while mean conservatives give much more to charities.

Do reality and the truth matter at all to people, especially Democrats? Apparently those who are ignorant or so immersed in dogma that they cannot see the truth are determined to wipe out individual choice to be productive and to give to charities. They wish to replace them with government mandates, backed of course with the liberal use of force. We have a society where much of our activity is still lightly pressed under the boot of government, but in the name of claims of neighborliness (Obama) and patriotism (Biden), our freely chosen actitivities are to be more and more subject to the brutal force of government edicts. When enough people are no longer paying income taxes and hence no longer have a stake in whether the money is well-spent or not, each additional dollar earned by some will only leave them with $0.46 apparently. Such a socialist paradise will give those among us who are most productive every reason to do less work and retire early. Atlas will shrug.

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