FT126: “Class warfare is the lie that the 10% who pay 70% of all taxes aren’t paying their fair share.” -Old Pithy

Posted by PITHOCRATES - July 13th, 2012

Fundamental Truth

The Democrats like to Tax and Spend but their own Job-Killing Policies make this Hard to Do

The key of the Democrat Party platform is ignorance.  If it wasn’t for ignorance they couldn’t win elections today.  For their policies have been failures.  We’ve debunked Keynesian economics stimulus spending in the Seventies.  Their spending did not stimulate economic activity.  They only added high inflation onto high unemployment.  Creating the stagflation of the Seventies and the high misery index (inflation rate added to the unemployment rate). 

And their high marginal tax rates did not produce more tax revenue.  Because high tax rates have never encouraged economic activity.  Even those on the Left admit raising taxes during a recession is not a good thing.  And high tax rates don’t generate any new tax revenue when they cause overall economic activity to decline.  For we need both a tax rate and economic activity to generate tax revenue.  And having one without the other just isn’t going to do the job.

The Democrats like to tax and spend.  But their own policies make this hard to do.  Because their policies kill jobs.  And because they kill jobs they reduce tax revenue.  Fewer jobs and fewer people paying taxes (the unemployed don’t pay taxes) create a problem for tax and spend Democrats.  So they turn to increasing tax rates on the fewer remaining people who pay taxes.  Which is a difficult thing to do when you have to win elections.  Unless you lie.

The Top 10% of Income Earners Consistently Pay about 70% of all Federal Income Taxes

To win elections when your policies hurt the economy you need to transform the country.  You need to get a large percentage of the people dependent on government benefits.  While at the same time you need to change the tax code so these same people don’t pay any income taxes.  You do this and you make a very loyal constituency.  Who will always vote to raise other people’s taxes to increase their own benefits.  Of course, raising tax rates is not always easy.  So they have to add one more thing to the mix.  Class warfare.

Class warfare demonizes anyone who opposes these tax and spend policies.  By perpetuating a lie.  That the ‘rich’ don’t pay their fair share of taxes.  But when you look at the actual numbers, you find it is those who are NOT ‘rich’ that don’t pay their fair share (source:  National Taxpayers Union).

 

 The top 10% of income earners consistently pay about 70% of all federal income taxes.  While the bottom 50% pay less than 5% of all federal income taxes.  Falling as low as 2.25% of the tax total in 2009.  In 2009 those in the top 10% included everyone who earned $112,124 or more.  Which is interesting as we consider the rich to be like those movie stars earning on average of $30 million a year.  Not small business owners whose business earnings fall directly to their personal income tax returns.  Not everyone in this 10% are small business owners.  For it also includes those super rich movie stars.  But most small business owners fall in the top 10%.  And they as a group hire more people than any other business.  This is why higher taxes kill jobs. 

Public Education is in the Shape it is because it is Easier to Lie to the Ignorant

Assume a small business owner earns $200,000 in his or her business.  Putting them in the top 10%.  Based on the 2012 federal tax rates for a married couple filing jointly the federal income tax due is about $42,060.  Assuming state and city income taxes equal this federal tax amount leaves $115,881 after taxes for the small business owner to support his or her family.  And to invest in their business.  If this couple lives on $80,000 (which is only 0.267% of the income of the super rich movie star) this leaves only about $35,881 to invest into the business.  Which won’t even cover the cost of one new full-time employee’s wages, benefits and taxes.  Increasing taxes on this ‘rich’ 10% will leave even less money for small business owners to hire new employees.  Which is why increasing taxes on this 10% kills jobs.

This is, of course, why small business owners typically vote Republican.  Because the tax and spend policies of the Democrats hurt them very much.  Preventing them from hiring new employees.  And expanding their businesses.  Which is why the Democrats try to get as many people as possible collecting government benefits while paying no federal income taxes.  Because their policies have lost them the small business owners’ vote.  As well as those who work hard and don’t collect government benefits.  For if you work hard and pay taxes you’re not likely to vote to increase your own taxes.  However if you don’t pay taxes you probably will have no problem voting to raise taxes on those who do.

So this is why Democrats resort to class warfare.  And lie.  It’s all they have.  Which explains why public education is in the shape it is.  Because it is easier to lie to the ignorant.  Which is why public education emphasizes the evils of capitalism and the horrors of global warming.  Because teaching our students history and economics makes the lie harder to tell.  So they don’t.  Instead they teach them to become good Democrat voters.  Who believe the lie of class warfare.  That the top 10% of income earners who consistently pay about 70% of all federal income taxes don’t pay their fair share.

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