The ‘rich’ don’t pay their ‘fair share’? What is their ‘fair share’?

One of the most persistent talking points on the left is that “the rich” — and sometimes “corporations” — don’t pay their “fair share” of taxes. While my views on this topic are pretty well-known among regular readers, I want to ask a question as neutrally as I can:

Exactly how much is their “fair share”?

You may present data to explain how much high-income Americans and corporations currently pay in taxes, and then argue for how much would be more “fair.” You may make more emotional appeals, although I’ll go ahead and tell you I won’t find such arguments very persuasive. Heck, you can even answer “however much it takes to pay for all the things we want government to give us.” (Oops, there I go being not-so-neutral again.)

But seriously: How much is enough? What’s fair?

And if you don’t have a credible answer to these questions, maybe you should stop using the “fair share” line.

– By Kyle Wingfield

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298 comments Add your comment

John Galt, MBA, CPA

July 26th, 2011
5:25 am

The same percentage for everyone- after a reasonable personal exemption- is the onlt “fair” answer.

WillieRae

July 26th, 2011
6:10 am

Fair share means more money from you so there can be more benefits for me.

ClinchPanther

July 26th, 2011
6:13 am

fair share means everyone pay a sales tax and eliminate the irs

BlahBlahBlah

July 26th, 2011
6:26 am

If you eliminate the IRS, who performs audits to make sure the proper amount of sales tax is sent to Uncle Sam? No matter the system, cheaters will cheat and someone needs to be there to prevent it. You think the state of Georgia’s system will catch them? Their audit plan generally consists of waiting for the IRS to finish their work, and then piggyback off the results. Put down the Boortz kool-aid and think for yourself.

Whitney O'Keeffe

July 26th, 2011
6:30 am

I am glad that someone finally asked this question-”what is fair”. Heck, life is not fair! Anytime someone attempts to “make things fair” they only mess it up for all.

Joel Edge

July 26th, 2011
6:30 am

WillieRae pretty much covered it as far as I’m concerned. Good blog, Kyle.

ByteMe

July 26th, 2011
6:31 am

When hedge fund managers can pocket billions (yes, that’s with a “b”) and pay only 15% on it, is that fair when a small business owner pays 33% on $1 million? Why does financial engineering get taxed at a lower rate than electrical engineering?

Why is there a mortgage interest deduction on second homes (those not used as rental properties, since that would be a business expense)? Canada has no mortgage interest deduction on first homes and their home ownership rate is similar to ours, so it’s obviously not because it encourages home ownership.

Kyle wants this to be about class warfare, but the deck really is stacked against the little guy and has been for a long time.

Rob Hood

July 26th, 2011
6:37 am

75% on personal incomes over $5 mill, with more significant tax breaks for charitable contributions

Rightwing Troll

July 26th, 2011
6:37 am

If I, as a small business owner, have to pay 27%, why should a wealthy individual or a corporation (corporations are “individuals”, remember) be allowed to pay anything less?

Sloan

July 26th, 2011
6:39 am

Flat tax is the only real fair solution. I make in excess of 250,000 per year and am in the highest tax bracket. It makes my blood boil every time I hear President Obama and other Dems talk about how the rich (which I am not, but they define me that way) need to give up all of their tax breaks and pay their fair share. At my income level there are fewer tax breaks than for someone in the range of say 100,000 to 250,000 because all of the IRS deductions are capped at my income level and I don’t receive the same proportionate benefit from these deductions as someone who earns less. The rhetoric that the Dems espouse on TV and the campaign trail is simply an attempt at using class envy to try to generate votes for them by getting you to believe the “rich” don’t pay their fair share of taxes. I would support a flat tax for all Americans with few if any deductions. Now that is fair.

jeff

July 26th, 2011
6:41 am

A recent study was published that states the top 400 wealthy earners in America pay an average 18% tax rate. I know my raate is higher, so, why is that fair? Who is playing class warfare, and more importantly, who is losing?

Ronnie Raygun

July 26th, 2011
6:43 am

The same tax rates for everyone would be nice. Rather than 15% tax rates for the investor class and up to 35% tax rates for people that work for their money. Why punish hard work?

joe joe

July 26th, 2011
6:43 am

Fair is paying taxes on what you consume.
Get rid of all these credits, loopholes, deductions etc. so that we don’t have to pay people for us to be tax compliant.

Mike

July 26th, 2011
6:44 am

A step towards “fair” would be eliminating the Earned Income Tax Credit so no one is receiving $6,000 more that she paid in! It might be “fair” to tax me at a higher rate than a single mom making a quarter what I do. Just don’t call me “fortunate” because I work two jobs and earned an MBA in my limited spare time! I earned what little I have through hard work, not luck. Likewise, a woman who got knocked up by a man who can’t pay child support got where she is through her own bad decisions. Taxes should be to pay the necessary, Constitutional functions of government and not to redistribute income from the responsible, harworking and productive to the uneducated, lazy and sexually irresponsible!

Gordon

July 26th, 2011
6:51 am

No one should pay more than a third of their income in federal taxes. If federal tax were the only tax we paid, that number could be higher. But with state, local, property, gasoline, inheritance, etc., paying one of three dollars to the federal government is enough. The top rate should start at maybe $500k, and maybe 28% from $150k.

However, more people should be paying higher percentages. There are too many loopholes. Finally, almost everyone should pay something, even if it is just 1 or 2 percent.

Ray

July 26th, 2011
6:51 am

Didn’t see any of you whiny rich boys while I was in Iraq.

Yeah, the top 2% might pay a little more, but it’s the other 98% that does all the work.

bill

July 26th, 2011
7:02 am

20% of every dime earned. Everyone that draws a paycheck no matter how small or how large. No deductions of any kind. No earned income credit! Everyone! No exceptions! No exemptions!

Barner B. Jones

July 26th, 2011
7:06 am

Wheres me SNAP check. It time to get all lickuored up.

Unaffiliated Voter

July 26th, 2011
7:08 am

Abolish the federal INCOME tax in favor of the FAIRTAX, so that EACH ONE pays his/her FAIR SHARE on their purchases. This taxes all visitors and ILLEGALs fairly too, while they are here! Employ scaled down IRS to collect the loot. Just think, KEEP 100% of your EARNED PAYCHECK and your employer no longer has to be the tax collector!
You pay tax on what you consume with ‘prebates’ to cover taxes on necessities! FAIRTAX would be the biggest economic boom in world history. Read, study, learn, activate! http://www.Fairtax.org

Mike

July 26th, 2011
7:17 am

All I know is everytime these left wingers go after your money, the economy goes deeper into a tailspin. The income gap is widening between the haves and the have nots and progressives think the solution is more government control. It is government control and its resulting recession that widens the gap in the first place!!

A free economy results in a rising lake that raises all boats, and then all of us get better off economoically. Progressives believe only in static economics, and thus the only way they can get better off is to take it from someone else.

The founder’s anticipated this crisis in the Constitution, and added property rights to prevent the “tyranny of the majority” from basically stealing property (money) from those who by the sweat of their brows had earned it. Go read Federalist Paper #10, authored by James Madison!

Road Scholar

July 26th, 2011
7:20 am

Kyle,what is the tax rates from the IRS for persons making over $250K?

What is their “effective”tax rate after deductions?

Laurie

July 26th, 2011
7:21 am

What’s fair? It would be “fair” if corporations distributed pay to ALL it’s workers so that CEOs didn’t make 500% more then an Accounts Payable clerk. Since that’s never going to happen, I think 35% of annual income is fair.

Mike

July 26th, 2011
7:22 am

“A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned – this is the sum of good government.”

Thomas Jefferson

Lynnie Gal

July 26th, 2011
7:22 am

You may present data to explain how much high-income Americans and corporations currently pay in taxes, and then argue for how much would be more “fair.” You may make more emotional appeals, although I’ll go ahead and tell you I won’t find such arguments very persuasive. Heck, you can even answer “however much it takes to pay for all the things we want government to give us.” (Oops, there I go being not-so-neutral again.)
In typical conservative Republican fashion, you have closed your mind to all argument that differs from yours. Your hardheadedness is literally “nuts”. That word describes the insane because the brain of the insane hardens and can not accept new information and can not accept reason. The political brain of today’s right winger has hardened and no longer accepts new information, and are therefore, “nuts.”

Mike

July 26th, 2011
7:24 am

Communism is the most “fair” political system. Why not simply go there, progressives?

Senior Citizen Kane

July 26th, 2011
7:26 am

Everyone should pay the same rate. It makes no sense to base the tax rate on income. A single person living in Atlanta who makes $150,000 a year is far ‘wealthier’ than a father of 2 who lives in New York and makes $250K. So how would it be ‘fair’ to tax the N.Y. father at a higher rate than the Atlanta single man?

Mike

July 26th, 2011
7:26 am

Ah, I love progressives. They fail to even understand the basic question raised by the article….that “fairness” is an elusive concept that changes over time, and that what is “fair” to one person is not “fair” to another…yet they simply bark out their Democrat talking points.

ged

July 26th, 2011
7:28 am

The 50% of us that pay all the taxes think the gov’t should prioritize, economize and redo entitlements. Isn’t it rich that the dems and their constituency want us to pay even more and for them to get more. The dems have created a welfare state so someone will vote for them. Oh and plus the public sector unions who are paid way too much salary and benefits.
I’d rather pay the taxes than be filled with envy.
Obama looks bad, lost and is starting to show his socialist colors. He’ll go down as a clown and the worst President of our lifetime. Bush recerssion, remember the economy did not start to falter until the dems took over Congress in 2006. You can hold a gun to business’s head and threaten to pile on more taxes and regulations = it just doesn’t work = see Obama.

Joe The Plumber too.

July 26th, 2011
7:30 am

Loved the Boehner smackdown of barry the boy blunder last night. I’ll bet urkle was chain smoking last night after watching the GOP response.

Joe The Plumber too.

July 26th, 2011
7:33 am

laurie: all my accounts payable person needs to worry about is how much she makes and doing her job correctly to continue earning her wage, what I earn is not her concern.

Will

July 26th, 2011
7:34 am

A fair share for the wealthy does NOT include tax loopholes large enough to drive a tank through.

The wealthy have the resources to hire the very best tax attorneys to find and utilize these unfair tax loopholes.

So, is that wrong? Depends upon who you are asking. Certainly not wrong for the rich to utilize their vast resources to take advantage of the loop holes. No more wrong that the wealthy (e.g. O.J Simpson) to utilize his vast resources (at the the time) to hire the best attorneys to help him get away with murder.

The unfairness lies in the tax codes allowed by the government that creates the loop holes in the first place.

Why do they do this? Because they are first and foremost politicians. They protect those who are seen as the most important to protect.

SouthernGal

July 26th, 2011
7:34 am

Graduated Flat Tax on all earnings/interest/capital gains…no exemptions no forms to file!

Ken

July 26th, 2011
7:35 am

Hey Joe, you ever get a job?

Karch

July 26th, 2011
7:35 am

I’m one of those so-called rich Americans that Obama continually refers to, as our household income is just over 250k. However, we certainly don’t feel so rich and we certainly don’t fly around in corporate jets either sipping champagne (heck, I only fly coach like everyone else, and only fly business class when I get bumped up 1-2 times a year.) After adding up all the taxes we pay (fed, state, SS, medicare, employment, etc.), our effective tax rate is about 47% a year, leaving us with roughly 130k left. Subtract our health insurance and contributions to our retirement accounts alone, that number is reduced yet again to around 90k. Subtract housing, business loan payments, food, utilities, car payments and all the rest; our final number is around 30k at the end of the year.

Now, I’m not implying that we’ve living paycheck to paycheck and I realize that we’re better off than most, but I just wanted to highlight that we certainly aren’t rich either—30k leftover certainly doesn’t buy us a lot of corporate jet trips Obama continually expounds on. And remember it has taken us years of hard work and sacrifice to get to this point, yet we are being scolded daily that we need to pay our ‘fair share’ (which basically implies that we’re not paying enough.) Even worse, roughly 50% of Americans don’t pay any federal taxes whatsoever, so who truly is paying their fare share and who isn’t?

@@

July 26th, 2011
7:36 am

I’m in agreement with Sloan’s 6:39.

It’s not fair for Kyle to put his “democratic contributors” on the spot. Were they to answer, they might appear greedy?

Jonesing on the Joneses is no way to go thru life.

Ken

July 26th, 2011
7:38 am

Karch, you realize someone making$32.000 has the same types of expenses as you right?

Ken

July 26th, 2011
7:40 am

Ever ask why 47% don’t pay income taxes? Slave wages could be the reason. Pay them enough I’m sure they will be happy to be taxed.

Bobby

July 26th, 2011
7:42 am

What is the difference between people on welfare who use food stamps and disability compared to corporate jet owners and farmers receiving federal tax breaks and monies? If we want to cut funding for medicare and the working class, then the wealthier should contribute their fair share. In the case of Neal Boortz and Donna Boortz they should pay their fair taxes without whimpering so much about the “poor” who work to support their extravagance.

Karch

July 26th, 2011
7:45 am

Ken, of course I do and where exactly did imply otherwise? I also specifically stated that I realize we’re better off than most or something to that effect. Again, the crux of my argument is we certainly aren’t rich, we aren’t riding around in corporate jets and we don’t have as much leftover yearly as one might think.

William

July 26th, 2011
7:47 am

“Slave Wages” ??
LMFAO
That’s awesome.. drop out of school, get drunk every night, go in and flip your burgers and complain about how little you make..

You should make a movie, or write a book (you could get someone to write it for you). This is America, dumb a**, if you don’t like how much you make, get another job (as soobn as we get rid of Barry next year) or WORK HARDER

Lil' Barry Bailout

July 26th, 2011
7:49 am

“the top 400 wealthy earners in America pay an average 18% tax rate. I know my raate is higher, so, why is that fair?”
——–

Because the rich are being taxed on capital gains. Capital is taxed at a lower rate because it is used to create and expand businesses, which creates jobs.

Any other easily-answered questions I can help with?

Ayn Rant

July 26th, 2011
7:51 am

More left vs. right bull, Kyle, where you speak for both sides!

Taxes must be levied for essential national and community projects and activities. It is the duty of each citizen to pay taxes according to the privilege he derives from the society. The federal government taxes income; the state governments should tax wealth, all of it, not just real property.

A citizen who derives only enough income to support himself and his family should not pay any income tax, as he derives little or no privilege. A citizen who derives more than enough income to cover basic needs should pay income tax; the more income, the more tax.

All hard-working citizens contribute to the community through their labor, but high earners have the unique opportunity to improve the economy and the society by investing their excess income in business equity and by funding cultural and charitable projects. Income from equity investment should be taxed at a lower rate than other income. Capital gains from true equity investments should not be taxed at all. Contributions to cultural and charitable projects should be deductible from taxable income.

The tax rate levied on high-earners should be slightly below that levied by other developed countries, so as to retain and attract wealthy people, but sufficiently high to encourage them to invest their excess income in worthwhile economic and social projects.

In practice, the tax rate on earners who have excess income should rise exponentially from 10% to a maximum of 66%. This is less than that imposed by other developed countries, with a few exceptions. Historically, high marginal tax rates in the US have promoted economic development by encouraging investment.

Isn’t it “fair” for those who derive the most privilege from the society to pay the most to support the society? It is, after all, the society that makes the difference between the income of a person in the US, and a person of similar abilities in the libertarian paradise of Somalia.

Joe The Plumber too.

July 26th, 2011
7:52 am

Yeah kenny boy, I think I’m doing good, keeping the dems out of my pocket, I’m supporting all the ebt people I can, keeping your card charged up for you. Oh by the way, You’re Welcome.

USMC

July 26th, 2011
7:54 am

“”"”"”The ‘rich’ don’t pay their ‘fair share’? What is their ‘fair share’?”"”"”

Great article, Kyle.

This is one of the BIGGEST LIES from the Left wing liberal Marxists now trying to transform, “Hope & Change” our country.

The deadbeat Democratic constituency are quickly becoming the Party of Marxists & Parasites.

News Flash!: LIFE IS NOT FAIR! Go “earn your OWN money!

MoreRightthanLeft

July 26th, 2011
7:57 am

I think the “message” is whats broken. Defining the rich at 250k, saying the word “fair”, and gov’t taking away from you and redistributing to others is the wrong message.
Fix the ridiculous tax code. The Fair Tax is a great solution…and for sake of argument from all you who cant add or read the print or their hate towards “producers” in this country. Please tell us your great plan…cuz the IRS thing aint workin

Ken

July 26th, 2011
7:58 am

Mike (@7:22)

“A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned – this is the sum of good government.”

Thomas Jefferson

Did he say this before or after he whipped his slaves?

Mike

July 26th, 2011
8:00 am

A few facts to ponder…..

(1) The truly rich earn income form sources OTHER THAN their W-2 income. Only 6.5% of their avergae income comes from their W-2. Raising their income tax rate is rather meaningless and will not raise enough revenue to justify all this arm-waving….raising it on the middle class (those who are NOT millionaires or billionaires) will make a difference, BUT it is a middle class tax increase on those making between $250K and $1MM, and to justify it as a tax on millionaires and billionaires is lying.
(2) Truly rich people earn their money and pay capital gains income tax rates. And the Federal Government has learned…the hard way…that raising that tax rate REDUCES tax revenues. Go look at the substantial drop in revenues that occurred after the Democrats raised the capital gains rate to 28% (from 20%) back in the mid 80’s. It was a fiscal disaster.

So, this whole issue is a class warfare issue pure and simple. It will NOT significantly improve revenues, but it will stir the mindless progressive masses who don’t ever bother to really look at facts or history, and Barry is in re-election mode already.

Ken

July 26th, 2011
8:02 am

@USMC – You need to wake up. While you’re probably struggling to stay middle class, the wealthier are laughing at you. And any person really making $250,000, knows more tax shelters than any of your on this board. It’s laughable to hear the “life is not fair” argument, and then hear someone else say, get the gov’t. out of my way so I can make my money. So which is it? Is the gov’t. the only one in the way, or should people who are legitimately discriminated against just suck it up?

MoreRightthanLeft

July 26th, 2011
8:03 am

Ken, the race card can used on Cynthia Tuckers blog…grow up and blame the guy in the mirror..
last i looked nobody on this site had any slaves…now go get my mcgriddle and coffee!!!

Mike

July 26th, 2011
8:05 am

Ken @ 7:58

Thomas Jefferson

Did he say this before or after he whipped his slaves?

Spoken like a true Progressive. When facts hurt your argument, make up lies to distract.Yes, Jefferson had slaves (although there is little I can find to support the allegation that he beat them.) BUT he opposed the concept and worked hard to eliminate it:

“While strongly opposed to the slave trade, as president Jefferson in 1806 successfully called on Congress to pass legislation to end it, which he signed.”