In the wake of the widely expected downgrade of America’s credit rating by Standard & Poor’s, Democrats are predictably trotting out their tried-and-true call for tax increases.
“Standard & Poor's decision to downgrade the nation's credit rating reinforces Democrats' call for increasing tax revenue, Senate Majority Leader Harry Reid (D-Nev.) said Friday.” (Jamie Klatell, “Reid: S&P Downgrade Backs Dems’ Call For More Revenue,” The Hill, 8/5/11)
Reid’s call for more taxes is nothing more than more of the same. Who is it that Reid, President Barack Obama and former House Speaker Nancy Pelosi, thinks should pay more taxes? Millionaires and billionaires of course! Democrats argue the folks working hard to make their fortunes need to pay their “fair share.” Hold on, what is fair share anyway? Is it fair that in 2009, 47% of federal taxpayers paid no federal income tax? That leaves 53% to fund the whole of government, entitlements and social welfare programs (not counting borrowed money of course, which makes up 40 cents on every dollar spent).
“About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability.” (Stephen Ohlemacher, “Nearly Half Of U.S. Households Escape Fed Income Tax,” The Associated Press, 4/7/10)
“Earlier this year, Obama signed into law the American Recovery and Reinvestment Tax Act of 2009 (P.L. 111-5), which, among other things, temporarily put into place some of the refundable credits proposed during the campaign. TPC estimates that under the new law, 47 percent of tax units will owe no income tax in 2009 (see table).” (Roberton Williams, “Who Pays No Income Tax?” Tax Policy Center, 6/29/09)
So back to taxing those greedy “millionaires and billionaires” and making them pay their “fair share.” According to recently released Internal Revenue Service (IRS) statistics, there are only about 235,000 “people and households earning $1 million or more annually,” or just “0.1%. . . of the 140 million tax” filers. Should such a small roster of taxpayers be forced to do more to pay their “fair share?” Well, I guess so, if you don’t think about 235,000 taxpayers paying more than $177 billion in income taxes isn’t their fair share.
How about those corporate jet tax loopholes that President Obama and others love to blast so much? Well, over ten years the government would reap a whopping $3 billion. That’s $300 million a year. Compared to more than $14.3 trillion in current debt, that’s not even a drop in the bucket.
“Democratic proposal to lower the tax benefit owners of corporate jets could claim would save the federal government $3 billion over 10 years, a House Democratic aide said Wednesday.” (Corey Boles, “Democratic Corporate Jet Tax Measure Would Save Feds $3 Billion – Aide,” Nasdaq, 4/5/11)
Would Democrats even consider lifting the tax loophole on union dues? Doing so would generate $25 billion over 10 years, eight times as much as closing the corporate jet loophole.
“A conservative estimate for union dues paid each year is $8 billion, according to the National Right to Work’s Stan Greer. If over ten years $80 billion in union dues were taxed, the federal government could generate roughly $25 billion in tax revenue.” (Kate Havard, “Ending Tax Break For Union Dues Could Save $25 Billion,” The Weekly Standard, 7/6/11)
This economic crisis is one created by spending too much, not taxing enough. Proposals to soak the rich, while refusing to enact meaningful entitlement reform, demonstrates just how intellectually bankrupt the Democrat Party is.
The first measure to secure sound financial footing is to cut the size and growth of government. Only when there has been meaningful reform to government outlays, including entitlement reform, can there be a discussion of taxes.
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