Wednesday, September 7, 2016

Reality Check on "Tax the Rich"

Hillary Clinton is proposing a ton of new federal spending, including free college. So where is she going to find the money? Here's how she explained it recently in Tampa:
We are going to the top one, ten percent, the millionaires, the billionaires, they are the ones that are going to have to start paying.
What's that? To start paying? Where have you been all this time Mrs. Clinton? Don't you ever stop by usgovernmentrevenue.com to check up on the facts? If you did you would find out that the top 1 percent already pay about 40% of the federal income tax.

And do you notice something else about the chart on "Income Tax and the Top One Percent?" It shows that the share paid by the rich has been going up. Except when we get big hunking recessions. Then the income tax share paid by the 1% goes down, as their share of income goes down.

But hey, what about the rest of the rich, the top ten percent? What about them?

OK, let's to to the IRS data on income tax collections, because that gives us income tax return data on the top 1%, top 10%, top 20%, and top 50%. Here's a table showing the latest tax return data, for 2013.

Income
share
Income
Tax share
Top 1%19.0%37.8%
Top 10%45.9%69.8%
Top 20%61.9%82.1%
Top 50%88.5%97.2%

Hello, Hillary Clinton? You say it's time for the rich to start paying? When the fabled One Percent is already paying 38 percent of all individual federal income tax receipts? When the top 50 Percent is paying 97.2% of income tax receipts? Which planet are you on, Madam Secretary?

Now stop me if I've got this wrong, but I thought that the central conceit of our ruling class that they were the educated ones; they were the informed ones. They knew the facts, and if they didn't they could get an expert to brief them. And I thought that the hit on Donald Trump was that he was a lying populist appealing to "hate" and "xenophobia." I thought that a politician that said Yeah! We're gonna make the rich pay! was a populist thug. Maybe even a demagogue. Maybe even a fascist demagogue.

Now, of course, I suppose there is a principled argument that the top 50% should really pay all of their income in tax, and that having them pay nearly all the income tax receipts doesn't really begin to provide the government with enough resources to meet human needs. Because, yeah! the rich can afford it.

Now Hillary Clinton, according to reports, wants to spend more money "for college education, child care, mental health, drug addiction, green energy, solar panels, and national infrastructure."

Really. Aren't we already spending a ton of money on all this stuff? And really, will spending more on all this stuff really make a difference? Isn't the problem with with government spending on colleges that it has alreadyramped up the cost of college so that students can't afford to go to college without loans? Child care? Isn't the problem that child care is already regulated out the wazoo? Aren't we already spending a crony capitalist's ransom on green energy and solar panels?

As I said. The conceit of our ruling class is that they are the smart guys.

Here is something even smarter. The Great Enrichment of the last 200 years came not from government programs and educated experts and politicians, but from nobodies with an idea that turned into a huge business that provided new products for the masses at low prices.

And I'd say we need to keep taxes low so that these inventive nobodies will keep doing more of it.

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