From President Obama to Hillary Clinton to Elizabeth Warren, on down, the entire Democratic Party is invested in a false narrative about the relative burden of federal income taxes, and about freedom and opportunity in the American economy.
“The rich don’t pay their fair share,” “the deck is stacked against you,” and “the middle class is being squeezed,” they tell the nation they have been leading. But the truth is just the opposite. The latest, official, U.S. government data for 2014 shows that “the rich” pay far more than their fair share of federal income taxes. That is most recently demonstrated in a report from the Tax Policy Center, which is a project of two liberal organizations, the Urban Institute and the Brookings Institution.
The top 1 percent of income earners, which the Democratic Party and its increasingly far left base teach us to revile, pays 45.7 percent of all federal income taxes, which is roughly three times its 17.1 percent share of income. Just the top 1 percent pays nearly half of all federal income taxes. Its fair share would be about one third of that, which is its share of national income.
Who are the top 1 percent? Movie stars and professional athletes, at the top of their respective professions, are actually the perfect examples. Because the top 1 percent are simply the best at what they do in every profession — law, medicine, business, finance, art, authors, fashion designers, architects, etc. Entrepreneurs who successfully start and run their own small businesses, which are the source of most new jobs, represent the surest route to the top 1 percent.
The hard work, dedication, and educational achievement necessary to reach the top of any profession are exactly the character traits responsible parents try to instill in their children. Childish and silly are the most accurate words that apply to those carrying on a campaign of vilification and hatred against the top 1 percent.
The top 20 percent pay essentially all federal income taxes, at 83.9 percent of the total, while earning 51.9 percent of total U.S. income. Praiseworthy is the word that applies to those with the dedication to their professions to carry this load.
The true middle class, the middle 20 percent of income earners, works hard too, but pays only 5.9 percent of all federal income taxes, while earning about three times that share of national income at 14.8 percent. The poorest bottom 20 percent earn only 4.5 percent of national income, primarily because its members mostly do not work, some for better reasons than others.
But this bottom 20 percent does not pay any federal income taxes. It receives money from the IRS instead, equaling 2.2 percent of all federal income taxes paid. That results from refundable tax credits, such as the Earned Income Tax Credit and the Child Tax Credit. “Refundable” means the full amount of the tax credit is paid to the individual even if that amount is more than the individual owes in taxes, resulting in a net payment due from the IRS to the individual.
That is true of the next lowest 20 percent as well. The entire bottom 40 percent of Americans pays zero, zip, nada of federal income taxes. Again, it is paid by the IRS instead, due to the refundable tax credits.
If the Democrats are so out of touch with reality, how can they possibly lead the country? Trying to pile more and more taxes on the narrow minority who are the primary source of the nation’s savings and investment would just drag the economy further and further down. Under such blind policies, the economy would never recover its traditional, booming, American prosperity. Indeed, the constant threat of still more confiscatory taxation, and persistent threat of still more overregulation, are the primary reasons the economy never has recovered from the last recession.
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That’s right, the Grinch (Joe Biden) is coming for your pocketbooks this Christmas season with record inflation. Just to recap, here is a list of items that have gone up during his reign.
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