President Obama famously declared: “I do think at a certain point you’ve made enough money.” I think at a certain point you’ve paid enough taxes. I was put in mind of that fact by this report from Mark J. Perry that the 400 U.S. taxpayers with the largest tax bills paid more federal income tax by themselves than did the entire bottom 50 percent combined. Of course one expects that the high-income pay higher income taxes, and we know that their burden is not only higher but disproportionately higher, but that fact is nonetheless sobering.
The top 400 taxpayers paid an effective federal income tax rate of about 20 percent, while the bottom 50 percent paid just under 2 percent. (Some will say that 20 percent figure ought to be higher; I say God Himself only asks for 10 percent.) That of course does not quite capture the entire dynamic, since most of those in the bottom 50 percent paid no net federal income tax at all. President Reagan, as Jay Nordlinger has reminded me, liked to brag about how many Americans he’d taken off the tax rolls entirely. I am not sure that this is a good thing. Too many riding in the wagon, not enough out pushing, etc.
We have an alternative minimum tax, so why not a maximum tax? In principle, I’d support capping individual income taxes at some fairly low level, say no more than $1 million a year. Earn $5 million, $50 million, or $50 billion, you still pay no more than a maximum of $1 million in taxes. I do think that at a certain point you’ve made enough money for Barack Obama and the clowns in Congress to spend. A cool $1 million a year is enough.