by Victor Davis Hanson<\/p>\n
Tribune Media Services<\/p>\n
For the last two years, $250,000 in annual income has been an arbitrary line in the sand of a renewed class war. Those above it must have their income taxes raised. Those below it are deemed more virtuous and so deserving of a tax cut.<\/p>\n
But who exactly are the \u201crich\u201d? Zillionaires such as Warren Buffett, Bill Gates, and George Soros surely are. But these wealthiest individuals have so much money at their disposal that they don\u2019t care much about income-tax rates. Their tax lawyers have found ingenious ways to divert millions of what would be owed to Uncle Sam by funding tax-free pet causes, private foundations, and favored charities \u2014 in a way not available to those who make far less than a million dollars a year.<\/p>\n
Is annual income a good gauge of wealth? Who is richer \u2014 the architect in Monterey, Calif., who makes $250,000 a year and who paid $700,000 for a modest house while picking up the full tab of $50,000 a year for his daughter at a private liberal-arts college, or the engineer in Salt Lake City, Utah, making $100,000 a year who has a house twice as large at half the cost, and whose son is on a need-based scholarship at the university? Should annual income alone trump all other considerations when the costs of living vary widely by region, and eligibility for billions of dollars in federal and state subsidies is predicated on income levels?<\/p>\n
By the same token, what exactly is \u201cpoor\u201d in a globalized world of cheap imported TVs, cell phones, and high-tech gadgetry available to most Americans at Walmart and Target? The middle class today has better access to what were once called luxury items than did the super-wealthy just two decades ago.<\/p>\n
How do we define tax \u201ccuts\u201d? Were the George W. Bush income-tax rates really \u201ccuts\u201d for the rich? Or were they across-the-board cuts only in comparison with the higher Clinton rates? In turn, were the Clinton rates actually \u201chikes\u201d on top of the George H. W. Bush \u201chikes\u201d? Both upped the lower Reagan rates, which in turn had been \u201ccuts\u201d from the higher Carter rates. In fact, every president\u2019s newly adjusted income-tax rate is derided mostly on partisan political grounds as either a counterproductive hike that \u201ckills small business\u201d or an unfair \u201ctrickle-down\u201d cut.<\/p>\n
Income taxes don\u2019t operate in a vacuum. That the \u201crich\u201d should pay 39.5 percent on their income might seem justified in isolation. But what about property, state income, payroll, and other taxes that, combined with federal income taxes, can take up to 65 percent of some incomes in high-tax states?<\/p>\n
In addition, income taxes are already graduated, so one pays a higher percentage of one\u2019s income the more one makes. Yet 50 percent of Americans pay no income taxes at all, while 5 percent of taxpayers pay nearly 60 percent of the total collected. The result is that half of Americans are likely to favor both higher entitlements, which they may well receive, and higher income taxes, which they most certainly will not pay.<\/p>\n
Did the staggering annual national deficit arise from a lack of revenue or out-of-control spending? California manages to have the highest income, sales, and gas taxes and the largest deficits. Over the last decade, federal income-tax revenue \u2014 and budget deficits \u2014 have increased almost every year.<\/p>\n
Income levels are not static. Belonging to the upper brackets is not always a matter of privilege or inheritance. Some Americans go in and out of the top tax brackets depending on the economy. Others are \u201crich\u201d for only a few years in their 50s and 60s \u2014 making far less before and after.<\/p>\n
If we prefer high rates, we will see either more tax avoidance or a certain reluctance to work an extra day, buy new equipment, or hire a new employee \u2014 given that any additional income will be mostly eaten up in taxes. Those who make over $250,000 are those who would be more likely to hire new employees, and they usually can do it far more efficiently than the federal government.<\/p>\n
Finally, if the goal is to increase federal revenue, then it is wisest to keep taxes as they are. That encourages Americans to make as much as they can and to hire and buy, thereby enriching the nation at large. But if the aim is instead to ensure that we mostly end up about the same, then raising taxes on the already highly taxed might make us more equal \u2014 and collectively all poorer as well.<\/p>\n
\u00a92010 Tribune Media Services<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
by Victor Davis Hanson Tribune Media Services For the last two years, $250,000 in annual income has been an arbitrary line in the sand of a renewed class war. Those above it must have their income taxes raised. 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Obama is in dire need of additional revenue after proposing a $3.8 trillion 2011 budget \u2014 containing the largest deficit in\u2026","rel":"","context":"In "Taxes"","block_context":{"text":"Taxes","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/politics\/taxes\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2055,"url":"https:\/\/victorhanson.com\/wordpress\/the-war-against-the-wannabe-rich\/","url_meta":{"origin":1034,"position":1},"title":"The War Against the Wannabe Rich","author":"victorhanson","date":"December 28, 2009","format":false,"excerpt":"by Victor Davis Hanson Tribune Media Services There is class warfare going on in this country \u2014 but it's not against the established rich. It's against those who are trying to become wealthy. President Obama has declared that those who make over $200,000 will pay higher income taxes. Caps on\u2026","rel":"","context":"In "December 2009"","block_context":{"text":"December 2009","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/archives\/2009\/december-2009\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":843,"url":"https:\/\/victorhanson.com\/wordpress\/class-warfare-the-last-refuge-of-a-failed-presidency\/","url_meta":{"origin":1034,"position":2},"title":"Class Warfare the Last Refuge of a Failed Presidency","author":"victorhanson","date":"April 12, 2012","format":false,"excerpt":"by Bruce S. Thornton FrontPage Media Now that Mitt Romney will be Obama\u2019s opponent in November, the Democrats are rolling out the false narrative they will use to demonize Romney and obscure four years of failed economic policies that have created the worst recovery from a recession since the Great\u2026","rel":"","context":"In "Bruce S. Thornton"","block_context":{"text":"Bruce S. Thornton","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/our-contributors\/bruce-s-thornton\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2024,"url":"https:\/\/victorhanson.com\/wordpress\/the-idiotic-corner\/","url_meta":{"origin":1034,"position":3},"title":"The Idiotic Corner","author":"victorhanson","date":"September 24, 2011","format":false,"excerpt":"by Victor Davis Hanson PJ Media It is odd for a newspaper in unsigned editorials to go after a writer. But the Monterey Herald has done that on occasion with me, and with the usual\u00a0ad hominem\u00a0tactics and failure to offer a rebuttal, which seem at odds with basic journalistic ethics.\u2026","rel":"","context":"In "Mainstream Media"","block_context":{"text":"Mainstream Media","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/american-culture\/mainstream-media\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":11778,"url":"https:\/\/victorhanson.com\/wordpress\/california-has-become-americas-cannibal-state\/","url_meta":{"origin":1034,"position":4},"title":"California Has Become America\u2019s Cannibal State","author":"victorhanson","date":"April 11, 2019","format":false,"excerpt":"Victor Davis Hanson \/\/ American Greatness For over six years, California has had a top marginal income tax rate of 13.3 percent, the highest in the nation. About 150,000 households in a state of 40 million people now pay nearly half of the total annual state income tax. The state\u2026","rel":"","context":"In "California"","block_context":{"text":"California","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/california\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":160,"url":"https:\/\/victorhanson.com\/wordpress\/let-the-real-fat-cats-pay-their-fair-share\/","url_meta":{"origin":1034,"position":5},"title":"Let the Real Fat Cats Pay Their Fair Share","author":"victorhanson","date":"December 20, 2012","format":false,"excerpt":"by Victor Davis Hanson Tribune Media Services Who exactly were the rich who, as the president said, were not \"paying their fair share\"? The rapper Jay-Z (net worth: nearly $500 million)? The actor Johnny Depp (2011 income: $50 million)? Neither seems to have heard the president's earlier warning that, \"at\u2026","rel":"","context":"In "Debt and Deficits"","block_context":{"text":"Debt and Deficits","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/politics\/debt-and-deficits\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts\/1034"}],"collection":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/comments?post=1034"}],"version-history":[{"count":1,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts\/1034\/revisions"}],"predecessor-version":[{"id":1035,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts\/1034\/revisions\/1035"}],"wp:attachment":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/media?parent=1034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/categories?post=1034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/tags?post=1034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}