My New York Post column today argues in favor of the flat tax — not primarily on economic grounds but on philosophical grounds. It is simply wrong for half the population to carry the other half on its back in terms of federal income taxes. And don’t give me that boilerplate blather about how the poor pay “payroll” taxes into the doomed Ponzi Scheme known as Social Security; that’s entirely unrelated to the consequences of the 16th Amendment — one of the little presents the Progressive Era has bequeathed us to bedevil us.
Let’s start with the facts:
* In tax year 2009, the top 1 percent of filers — those “millionaires and billionaires” with adjusted gross annual incomes of more $343,927 whom the Occupy Wall Street rabble is demonizing — paid nearly 37 percent of federal income taxes.
* The top 10 percent with incomes over $112,124 (say, a New York City cop and a teacher filing jointly) paid more than 70 percent of income taxes.
* The top 50 percent (starting with princely incomes over $32,396) paid — wait for it — nearly 98 percent of all federal taxes.
Now toss in the myth, heavily promulgated by Obama and the elite Democrats (most of whom are millionaires themselves) that there is a vast store of hidden, probably ill-gotten wealth somewhere out there in radioland:
Many Democrats, including President Obama, would have you believe the “ultrarich” are a much larger percentage of the population than they really are. In 2004 (the last year for which IRS stats are available), just 2.7 million adults in America had a net worth of more than $1.5 million. The feds could confiscate all their assets and reduce our national debt of $15 trillion by a total of $10.2 trillion. Then what?
Which brings me to this salient point:
The Occupy Wall Street crowd is right that it’s fundamentally undemocratic to have tax rates that the super-rich (like Obama buddy Warren Buffett) and megacorporations (like GE, run by Obama buddy Jeffrey Immelt) can easily elide.
But it’s equally undemocratic for many to have no skin in the game and yet still be able to vote themselves largess from the public treasury.
The key to real fairness is broadening the tax base, not by soaking the rich but by making everybody pay something, even if it’s only a pittance.
But with nearly half the population paying nothing — or, worse, getting a check from the feds as part of the Earned Income Tax Credit — asking everyone to pay his or her fair share is generating yelps from the gravy-train freeloaders and their political enablers.
It’s time to call their bluff…
Economically because America needs a system that isn’t riddled with loopholes, tax breaks and special favors and that doesn’t cost billions in compliance.
Philosophically because it’s time to end the notion that coerced “income redistribution” is a proper function of the US capitalist system.
To judge from the knee-jerk reaction so far, you’d think I’d just advocated eating Irish babies to solve the population problem. But isn’t this a conversation we desperately need to have? If not us, who? If not now, when? The only thing we have to lose is our chains.