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Representation Without Taxation
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We used to have an issue in this country about taxation without representation. In other words, paying taxes, but not getting to decide how you’re governed…of course, back then, we were a colony and not a country…and that’s my point. Backasswards taxation policy was once enough to start the American Revolution. Perhaps it’s time for another revolution.

Some people wonder why I care so much about taxes, and my answer has always been that tax policy has a tremendous impact on virtually every other policy we put in place. It’s the “glue” that keeps everything together or pulls it apart.

Recently-released Federal Reserve data (from the most current year, 2006) shows that 39.89% of all income taxes paid in America come from the top 1% of income earners — people earning more than $388,806 annually. 60.14% come from the top 5% of earners, or those making more than $153,542 a year. 70.79% of all income taxes paid come from the top 10% of earners (making over $108,904 per year), while 86.27% of all income taxes paid come from the top 25% (that would be people making over $64,702 per year). And even more shocking, 97.01% of all income taxes paid come for the top 50% of income earners, which you join once you cross the $31,987 threshold annually. To put it another way, we now have half of all workers (those showing a positive AGI) paying only 2.99% of the total income taxes in America…that’s nearly 68 million people…and yet, we allow those folks’ ballots to count as much as yours or mine. You might just want to re-read this paragraph slowly so this sinks in some.

I find this deeply troubling, especially among much talk of our new Administration raising tax rates on the top 5%…and we all know that more than just that group will have to “contribute” with the way spending in Washington is going these days. If half the people eligible to vote aren’t paying much in income taxes (actually, 23 million Americans of working age paid nothing, yet still received federal “refunds” totaling $45 billion), then isn’t it easy to essentially “buy” their vote? What do they care if we teeter into socialism or worse? Why would they care if government continues to grow…they were getting all of the benefits with none of the “sacrifices” in the first-place.

I still believe this is the most upwardly-mobile country in the world, yet we have a political class that wants to keep squeezing what I call the “productive class.” I suppose that’s where the money is, but eventually you can no longer get blood from a stone. And in the middle of a recession, this is economic suicide. Maybe when the ratcheting-up of taxes begins again, we can refer to it as the “Success Tax” — at least let us keep some dignity about it. And by the way, for all the talk of the “rich getting richer,” recent Federal Reserve data shows the top 1% held 33.38% of the nation’s wealth in 2007, actually DOWN from 33.9% in 1995 — and that was BEFORE the $11 trillion in household net worth was lost in the past 18 months.

Sure, there are people among the top 5% of income earners that are undeserving and even some that are even immoral, probably. But there are also people there that are the source of many of the jobs in America. The people that make business a source for good in this country and around the world. The people that make America go. Among this group are the people that took the risks that were available to everyone else, but that few others ever take…to start a business, against the criticism of everyone who said it would be foolish. The Many don’t take the risks…not because they cannot, but mostly because they convince themselves they cannot.

I guess I’m still reeling from our Vice President’s comments on the campaign trail that I’m somehow “un-American” for working so hard to earn what I do…I kind of thought that WAS American. At least that’s what my friends who were born in foreign lands tell me when asked why they moved here. I also happen to think there’s probably a direct correlation between the amount of television watching one does with their income: more hours, less dough. And I’m pretty sure there’s a correlation between the number of books, magazines, newspapers, newsletters, etc. read, to income. I see entrepreneurs every day that don’t do what “everyone” else is doing…and I think they ought to keep more of the rewards they earn, not have the desire taxed out of them. But maybe all of this makes me old-fashioned and resistant to “change.” I’m just a little sick of the class warfare.

6 Comments

  1. Marianne Laudati says:

    It’s time the silent majority starts speaking up.
    I’m with you!

  2. Braudis Pegram says:

    Your post is quite remarkable Chris; and although I did not agree with your April 1st viewpoint (April Fool’s prank), and I can appreciate some element of “socialism” in certain aspects of the government, I am in agreement with your perspective. Some think your statement political considering the fact that the sentiment was the basis of the American Revolution. As a person who values aspiration, I think it’s just common sense.

  3. Kyle Ransom says:

    Hi Chris, I guess we can add this to the already long list of mis-representation of the American people of the US Goverment. There are many shortcomings in how the US Government has governed our country and it is clear that the US Govenrment does not have our best interest at heart.

  4. Maureen Rzasa says:

    If 68 million people earn less than $31,987 they desperately need help. How would you like to feed a family on that income. We need to educate those people so they can move into higher paying job. I’m more than willing to pay higher taxes if it will be used to help others get an education and earn more money to help their families. The 23 million working Americans that did not pay income tax, but received 45 billions in refunds helped the economy by buying products produced by the wealthiest of tax payers. These hard working individuals sacrifice every day of the year. They hold down jobs that you don’t want. Help their children with homework each night. Maintain their homes without maids. And by the way that same Federal Reserve data showed that there are currently more millionaires in the United States than ever before. The eleven trillion loss of net worth was caused by greedy people and companies promising to deliver high returns on real estate investments. These investment were no longer regulated by government due to deregulation by Bush. The top 5% of tax payers creating jobs, and taking risks deserve praise and gratitude. I agree with you there. I also agree that entrepreneurs do things differently. Many of them have been raised to think differently. The book Rich Dad Poor Dad tells it all. I liked reading your article even though I didn’t agree with many of your thoughts. The United States is a great place to live.

  5. Basile Daskalakis says:

    Chris, I am with you, 100%, and I can go further. to declare, that the American People, be Awaken, to the devastating effects, that the Printing of “FIAT MONEY” have in our every day lives! I think, it has a direct byproduct the Formation and expansion of the nonpaying Taxes Class! I must add, that worst of all, is that we issue Credit,base to almost worthless Dollars!,…..

  6. Mike Lyngvar says:

    Plain and simple with out the small business owner and the small business taxes that are paid the wheels of the fed would stop turning. If the small business owners of the country would unite on one front we might be able to take a stand against Washington.

    Think of this, what if every small business in America just said nope we will not be working on Mondays anymore. Just the loss in sales tax, income tax, etc. would be a big loss to the Fed.

    Three words GRASS ROOTS MOVEMENT, take back our dollar from the private banking sector known as the Federal Reserve and we might have a chance for “CHANGE”. If not that is all you will be left with in your pocket.

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