As President Obama continues to base his reelection hopes on resentment toward the “1 percent” who are supposedly not “paying their fair share,” the latest evidence suggests that his attacks are still off-target.
According to data just released by the Tax Foundation, the top 1 percent of the wealthiest Americans earned 16.9 percent of all adjusted gross income in the United States. While no doubt that’s a lot of money, it actually represents a decline from 2008, when the rich earned 20 percent of all income. That’s right; the rich are earning a smaller proportion of U.S. income.
In fact, there has been a 39 percent decline in the number of American millionaires since 2007. Among the so-called super rich, the decline has been even sharper. The number of Americans earning more than $10 million per year has fallen by 55 percent. Perhaps someone should tell the folks in Zuccotti Park: Inequality is actually declining.
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Interestingly, the decline in earnings by the rich has corresponded with higher unemployment and rising poverty overall. We are all poorer, but at least we are more equally poor. Hooray.
Could it be that the rich might actually perform a valuable service in our economy by, say, creating jobs? After all, what does the president think that the rich do with their money: Bury it in their back yard? In reality, individuals either spend that money or they save and invest it. If they spend it, it helps provide jobs for the people who make and sell whatever it is they buy. If the money is instead saved and invested, it provides the capital that is needed to start businesses and hire workers. It is trite but true — not many Americans have been hired by a poor person.
As for their not paying their fair share, according to the Tax Foundation report, that top 1 percent of earners paid 36.7 percent of all income taxes, an amount that truly does seem disproportionate. The top one-tenth of 1 percent, the truly rich, earned nearly 8 percent of all income but paid a hefty 17 percent of all income taxes.
And while Warren Buffett may, as he claims, be paying a lower tax rate than his secretary, he is clearly an exception. In fact, the effective tax rate paid by the rich has actually gone up in recent years, and now averages roughly 24 percent, compared with an average of 11 percent for all taxpayers. Moreover, as the Tax Foundation points out, the reason that Buffett and those like him pay low effective tax rates is that much of their income is derived from capital gains and dividends, but “income derived from these sources has already been taxed once by the corporate income tax, which is not included in the current study, meaning the average effective tax rate numbers can be somewhat misleading.”
All of this may be one reason why, despite the protestations of the Occupy Wall Street crowd, support among Americans for redistribution of the wealth is actually declining. According to the General Social Survey, the number of Americans who believe that “government should reduce income differences between the rich and the poor” has fallen dramatically, with barely a quarter of the population strongly supporting the proposition. And, the biggest decline for redistribution has actually occurred not among the rich but among the working class.
Perhaps the “99 percent” are not quite so seduced by class warfare as President Obama thinks. Or perhaps they understand that, as William J. H. Boetcker once said (in a quotation often misattributed to Abraham Lincoln), “You cannot strengthen the weak by weakening the strong. You cannot lift the wage earner by pulling down the wage payer.You cannot help the poor by destroying the rich.”
"Could it be that the rich might actually perform a valuable service in our economy by, say, creating jobs? After all, what does the president think that the rich do with their money: Bury it in their back yard? In reality, individuals either spend that money or they save and invest it. If they spend it, it helps provide jobs for the people who make and sell whatever it is they buy."
Ever seen a Modigliani on the wall in a dining room in Greenwich? It wasn't Made in America.
Nope. But I've been living on earth for 49 years and have enough sense to know that wealthy people create jobs and that no amount of silly liberal talking points can change that simple, easily verified fact.
Average property taxes in Greenwich are over $8000.00 per year (average in the USA is 1100.00, CT is second highest in the nation) so he pays plenty for that wall. If he used an American dealer to procure the painting he paid him for his work in negotiating the sale. He probably paid a sales tax at time of purchase. He probably carries insurance on that painting so he provides jobs for the insurance agent. He would have to have a substantial income in order to pay for the work and he pays a progressive income tax on that income. And he may have built or invested in companies providing many jobs that made it possible for him to earn the money to buy the painting in the first place.
BTW, the fact that a person does not spend all his money on what you want changes nothing about the argument the author offered.
Have you never spent some of your money on yourself just because it is yours? Your argument is the worst form of and a most unappealing example of the rankest kind of class envy.
Lastly, what if the painting were a Grant Wood? Would you say that the rich man should be denied that painting as well? Or are you saying that so long as rich people buy American artists then they can spend to their heart's content? It is hard to image the difference since Modigliani died in 1920 and Wood died in 1942 so I doubt whether either of them would care. But then I have to wonder how the rich man's painting is any of your business and why you seem to care?
MikeB - What is your point? Did the person steal the Modigliani? Did he buy it with the proceeds from insider trading? Did he, to the contrary, earn the money to buy it? Inherit it? If he did nothing illegal to obtain it, what business is it of yours or anyone else's that he has it on his wall? I just don't get your point, assuming there is one.
NO. But I have been to many museums in the US. It seems to me there is always a little plaque, right nest to the paintings/works, which seem to always thanks som erich benefactor, who has generously "loaned" the priceless art.
Here's a quick list of questions:
1. How many libraries did Carnegie build?
2. How many hospitals exist in the US, which DON'T have a wall of plagues for the well-off, noting those who give thousands to millions, just so the hospital can continue or grow? (I assue you, the poor use hospitals, too)
3. How many public universities have buildings named after donors? (hint, that's because those named usually put forth the money to build the building)
4. How many schools, churches, public parks, Boys and Girls Clubs, civic centers, music centers, special education centers, women's shelters, homeless shelters, etc. woudl even exist without the donations by successful, local, wealthy individuals, who are civic-minded in nature (i.e. conservatives)?
ANSWER: Very few.
Oh, Mike, Mike, Mike.... do those filthy rich 1% 'rs in Grenwich go out to dinner in Italy? I mean, all the time? Who makes/serves their dinners when they are at home? Who cleans that house? At a higher level of income, who advised them on the advisability of purchasing that Modigliani? Who provides the security for that Greenwich dwelling to keep it, and the inhabitants, safe? Where do they send their kids to school? Who drives them? Who tutors them? Who plays in the theatrical productions they attend on Broadway or the operas and ballets they patronize at the Lincoln Center? People on the left often talk about "dead end service jobs", but I was once waited on by a witty and efficient gentleman at a high-end steak house who mentioned that the earnings of an experienced Senior waiter... waiter... at Morton's of Chicago could top 100K/year. That's not just a "living wage", that's an "American Dream" wage, and it is made possible by one thing, and one thing alone: rich people who can patronize Morton's regularly. Sure, rich people purchase some foreign things and support some foreign jobs. So do I, daily. And so do you. But they support a lot of super-duper interesting, creative, "living wage+" jobs here in America and I, for one, don't want to see them on the endangered species list anytime soon.
Barack Obama dislikes the trickle down prosperity of capitalism. He much prefers the trickle up poverty of his policies, because even though we are all poorer for it, at least it's fairer.
And while we're at it, let's dispense with the canard that "trickle-down" was ever an accurate or fair description of supply-side economics. "Trickle-down" is really a political term used to ignore the reality of the free market and dismiss the idea that everyone can derive some lasting, not accidental, benefit from others' fortune. If we're going with fluid metaphors, it's more like circulating blood that nourishes all the cells in the body, or the rising tide that lifts all boats.
President Alinsky appears to subscribe to the maxim: "The vice of capitalism is its unequal distribution of propserity. The virtue of socialism is the equal distribtuion of poverty."
The government can't "raise anyone up". They can manipulate their disposable money through forms of welfare but, in reality, all that does is lower the value of everyone elses money through inflation. This has been the problem with welfare, food stamps, housing and the minimum wage. Why is it that you can give a nice house to a poor person to live in and the area looks like a crummy third world slum in a couple of years. The more "free homes" in an area, the worse it looks. They didn't earn it, they don't appreciate it, they don't care for it because it is worth exactly what they paid for it-Nothing!
These programs don't lift anyone up long term. The most recent example is the healthcare bill. When they mandate "universality" all it does is raise the price for those that were already paying for it.
An equivalent idea is "animal rights". You can't give rights to animals because they don't have the ability to take responsibility for their actions. All you can do is attempt to lower man to the level of the animals (no, I'm not saying poor people are animals).
The only way an individual is "raised up" is by that individual's effort or by the Grace of God (I'm not talking about salvation theology so please, no comments about "works").. This is why charity through religious organizations is so much more effective than Government largesse.
Obama and his leftist pals (AKA Democrats) think they can retain power by using class warfare based on their own reinterpretation of the actual facts. Too bad for him that most Americans (except for members of his own party) are too clever to fall for his clap-trap.
And the rich man has, no doubt, paid his taxes on his money before he bought the painting with some of what was left so what, exactly, is your point?
And respect for the legal ownership and the free disposition of property by its owner are guaranteed in the Constitution.
It is a mark of civilization that people's rights are equal before the law and the right of property ownership exists and is respected. If our civilization does not respect the rights of its citizens then it is not worth the taxes paid.
The point is that we are going to have to make decisions about tax rates. That is, how much people are going to have to pay. Of course, one of the main consequence of requiring people to pay higher taxes on their income is to curb their spending. To understand this impact, one has to know how they are spending money in the first place.
No one is denying anyone's right to buy a $5.5 million painting. We even have a society where the police would put many more hours investigating the theft of such a painting at taxpayer expense than they would the theft of a less expensive property owned by someone else. We respect property rights more than we have to.
A rich citizen is not legally entitled to have the police spend more resources investigating a stolen painting than a middle class citizen gets for a stolen bike. But based on the respect our society has for expensive private property, they are likely to get much more attention.
When it comes to whether we should consider raising taxes on higher income people, the fact that their financial situation enables them to burn money on $5.5 paintings is relevant. The actual negative consequences of a tax increase on your life are less if you are lucky enough to be able to burn money.
Compare that to the situation where property taxes lead to a foreclosure sale on the property of someone with much lesser means.
Which taxes end up having a more negative impact on someone's life?
