Prepare for shock
We are constantly being told that America's financial woes cannot be corrected until the top 1 percent of taxpayers pays their "fair share." This should be examined both absolutely and relatively.
The top 1 percent earned 16.9 percent of the income and paid 36.7 percent of the taxes. The top 5 percent earned 31.7 percent of the income and paid 56.7 percent of the taxes. And the top 10 percent earned 43.2 percent and paid 70.5 percent.
These figures are certainly progressive, but some would say they should be more progressive. Considering the remaining 90 percent only pay 29.5 percent of the taxes and the bottom 48 percent pay none, a real philosophical argument should be made about what can happen to a country when half the people are exempt from taxes.
How does the U.S. tax structure compare relatively with Western Europe? A study by Swedish economists Jesper Roine and Daniel Waldenstrom compared the top 1 percent and found that the United States was the most progressive. The reason for that is a country cannot support a large government supplying generous benefits without taxing the middle class. Western Europe has chosen the "welfare state," with cradle to grave government support. To do so they have had to devastate defense, accept high unemployment and economic stagnation, and resort to heavy borrowing. Now the people can't seem to give up these benefits and take to the streets when cutbacks are proposed. Soon, the lenders will not lend, the benefits will go away, and perhaps, it'll be bankruptcy.
The United States is now taking the same path as Western Europe. The federal government is rapidly growing and expanding services while trying to micromanage the economy and pick business winners and losers. The federal government is now spending close to 25 percent of GDP (like Europe) and is borrowing about 40 percent of its expenditures (like Europe).
We are told that if the top 1 percent will only pay their "fair share," all will be well. But all will not be well. Our American way of life is not guaranteed. We are who we are because we have been different. If the 99 percent think they're going to get something for nothing, then I suggest they prepare for a bitter shock.
Land O' Lakes