Whoopi and Taxes

For those who haven’t had the chance to see Whoopi Goldberg’s perspective on taxes on “The View,” it’s definitely worth viewing:

She makes a great argument that while she doesn’t mind paying taxes and giving back, since she has done well financially, she still feels she’s being punished by the government for her success. And Whoopi, I couldn’t agree with you more. You see, I’m not jealous of your success, as I know that talented, entrepeneurial people like yourself are the folks that are taking risks and creating jobs for those of us who are employees. You and other business owners small and large are the engine and the driver of our economy. But your government, in it’s current form led by the Democratic party, doesn’t see it that way. And that’s not to say it was considerably better under the previous Republican administration, since they strayed far away from core conservative principles of small government, low taxes, and personal responsibility. They received the “due penalty” of their error, and are now doing penance (I pray).

These days I often hear liberals say that Reaganomics have concentrated money at the top over the past 25 years, and now that Democrats control the Presidency and Congress, they will “redistribute” money back to the poor and the middle class. But here is the question: why do they believe those doing the “redistribution” can do a better job than properly regulated market forces? There will be a small, concentrated group of people performing the wealth redistribution (i.e., Obama and Congress), which means they will decide what to take from whom and to whom they will redistribute the proceeds. Do liberals really feel this is a job for government? And with the trillions of dollars this small group of people plan on redistributing, can they do this solely on the backs of the “rich,” who make over $250,000? I don’t think that’s realistic. The middle class will have to participate in this ill-gotten, productivity killing scheme as well.

To demonstrate my view, please note the following summary of Federal Individual Income Tax Data from 2006, showing each group’s share of income taxes (source: Internal Revenue Service):

• Top 1%: 39.89% (>$388,806)
• Top 5%: 60.14% (>$153,542)
• Top 10%: 70.79% (>$108,904)
• Top 25%: 86.27% (>$64,702)
• Top 50%: 97.01% (>$31,987)
• Bottom 50%: 2.99% (<$31,987)

Note that the top 5% (Whoopi and other “greedy” folks making over $388,806), are already carrying 60% of the tax load, and that the top 50% (making over $31,987) are carrying 97.01%. The bottom 50% are paying 3% of the total tax load. Looking at these numbers, the issue of fairness comes in to play. If the top 10% are paying 70% of the taxes, what is a “fair” amount for them to pay? 80%, 90%, 100%? Even if you ask the top 10% to carry all of the tax load, you’re asking some that are making just a little over $100,000. That sounds like a lot of money in some states, but in states such as California and New York, that’s middle class living at best in major metropolitan areas.

Let’s again note that the bottom 50% pay a total of 3% of the taxes. According to the Wall Street Journal, with the new and expandable refundable tax credits Obama’s budget is proposing, the bottom 50% will pay NO taxes. This, the paper notes, “could cement a permanent voting majority with no stake in controlling the cost of general government.” So in this regard, the Democrats could permanently assure themselves both the Presidency and the Congress because they will have a plurality of voters that, with a little help, could vote themselves the largesse they feel they deserve. And I believe as politicians, they will look out for themselves first, since they will be in an elite class that wants to remain an elite class. If that means class warfare and redistribution of wealth as a means to that end, then so be it. The key question is what would happen if a portion of the top 50% got fed up with being penalized for achievement, and decided to cease being as productive? What would happen then? Inquiring minds want to know.