The wealthy pay more than their ‘fair share’— and liberals know it

Twice in an interview on CNBC following the announcement of the President, Treasury Secretary’s Build Back Better framework Janet YellenJanet Louise YellenThe Hill’s Morning Report – Presented by Facebook – GOP struck a punch in 2022, staring down at Trump-era troubles claimed that the taxes outlined in the framework for high-income taxpayers and companies (not to mention the numerous tax breaks for news Organizations, litigators, trade unions and wealthy citizens of high-tax countries) represented their “fair share”.

While I hope Congress has the common sense not to pass Build Back Better, thank goodness a liberal politician can finally responsibly debate taxes without demonizing an entire class of Americans.

For decades we have heard liberal politicians – including presidents, cabinet members, and congressional leaders – demonizing wealthy Americans by claiming that if only the rich paid their fair share of taxes, our deficit problems could be resolved and advanced social policies achieved. It is divisive and demagogic – the height of public irresponsibility – for anyone in power to demonize any class or group of Americans.

At first glance, the claim that the rich are under-taxed was always false. The top 10 percent of taxpayers pay 70 percent federal income tax. What would be “fair”? 75 percent? 90 percent? The top one percent pays 40 percent federal income taxes, although they are only approx 21 percent of total reportable income. Is that less than “your fair share”? Since 2001the share of the top 1 percent of federal income taxes paid grew from 33 to 40 percent.

Furthermore, the following remains unspoken in the liberal design of our tax system 50 percent of Americans pay virtually no (less than three percent) federal income tax. This fact is especially problematic because half of Americans have no direct personal interest in reducing federal spending. This explains why rich new social programs often do so well – they don’t cost half of Americans anything. If you don’t have to pay for the wastefulness of Congress, why bang back against spending more? And would it be “fairer,” better for America, if 80 percent of Americans didn’t pay taxes?

Granted, wage and consumption taxes (paid by most working Americans) tend to be more regressive, but the United States’ tax system is in almost every way significantly more progressive than almost any country in the beloved Europe of the left, which is largely based on highly regressive ones Values ​​is based on VAT to fund their extensive social programs. Are these tax systems “fair”?

Unfortunately, in a tax system that relies heavily on citizens’ willingness to report and report their own income, some people are cheating. The IRS estimates that the tax gap (which is the difference between what taxpayers owe and what they pay) is approximate $ 400 billion. But scammers span all income brackets. Three of the biggest areas of fraud I’m from Low-income taxpayers claiming excessive amounts of refundable tax credits (such as the Income Tax Credit and Child and Dependent Tax Credit), middle-income small businesses (such as restaurants and shops), and sole proprietorships (such as hairdressers, doctors and craftsmen) the Transactions involving large amounts of cash and from the under-reporting of income from so-called “transit companies”“(Like limited partnerships), a popular investment vehicle of high income earners for which the IRS cannot electronically track and verify income without an audit. Scammers don’t pay their “fair share,” but scammers come in all shapes and sizes – and in every income tax bracket.

Liberal politicians should have the integrity to say what they really mean, “We want to spend more money on social programs (or we want to redistribute the wealth in America) and we have to collect taxes on it. For the same reason as gangster Willie Sutton once answered why he robbed banks, we want to tax the rich more – not because they don’t pay their ‘fair’ share, but – because “that’s where the money is”.

president Joe BidenJoe BidenBiden and China’s Xi to hold a virtual summit Monday: Reports Briahna Joy Gray: Biden “plays the fool” with student defense and national security debt relief – Biden marks Veterans Day MORE promised a more civil, less divisive administration. With the Secretary of State declaring that we will achieve “fairness” in the Build Back Better bill if it is passed, and even if it does not become law, we hope that once and for all, liberal politicians will stop trying to demonize the rich or another class, the Americans.

David F. Eisner was Deputy Secretary of Management at the US Treasury Department from 2018-2021.

https://thehill.com/opinion/finance/581269-the-wealthy-pay-more-than-their-fair-share-and-liberals-know-it