In response to “Time for high earners to pay their share of taxes” (by Nathaniel Drake, Feb. 12):
Letter to the Editor
Mr. Drake complained at length about payroll taxes returning to normal levels while expressing frustration that it’s about time we raise taxes on high earners. Perhaps Mr. Drake is unaware of the huge tax increases that were just passed for high earners, including the following: raising the top personal income tax rate on household income above $450,000 from 35% to 41% (which includes the phase out of various deductions); raising the estate tax rate from 35% to 40% (exemption of the first $5 million); raising the tax on dividends and capital gains from 15% to 23.8% (which includes the new 3.8% Obamacare investment income surtax); and finally, an additional 0.9% Obamacare payroll tax surcharge on household income above $250,000, in addition to the 2% payroll tax hike on everyone. These figures are directly from the U.S. Senate.
Additionally, according to Kiplinger, the top 1% of taxpayers pay 38% of all federal income taxes, while only earning 20% of the total income. The top 10% pay 70% of federal income taxes, while only earning 46% of the total income, and the top 25% pay 86% of the taxes while earning 67% of the income. A 2008 study by the OECD, a Paris-based think tank, ranked the United States #1 out of 24 developed nations in tax progressiveness based on a measure called the concentration coefficient, beating out supposedly “fairer” societies like France.
Mr. Drake is skillful at playing off the base human emotion of envy. However, when you look at the numbers objectively, the wealthy are paying more than their fair share — even more so after this latest raft of tax increases.
— Daniel Joseph Kinnear
I can’t help but wonder how much a political science and communications sophomore really knows about economics and the reality of government taxation. As a business owner quite familiar with the upper tax brackets, I can tell you that high earners already pay their “fair share” of taxes, and that it is the lower income earners who often skate with little or no taxation on their incomes. However, those lower income earners have a disproportionate share of government benefits inuring to them. In other words, stop whining and get back to me in 10 years when you have a better idea of the reality of the situation.
In one paragraph the assumption is made that trickle-down economics (the idea that lower taxes on high income workers leads to economic growth) doesn’t work. In the very next paragraph the solution is to raise taxes on high earners, even though it will slow growth. Now the question is, Do high taxes on high earners limit growth or accelerate it?
It is a little known fact that people making over $125,000/year already pay 80% of income taxes and that the top 1% pay close to 40% of the taxes themselves. The big difference between tax rates and tax revenue is the ability that high wage earners have to defer their tax bills. They can hire accountants or move money overseas or take payment later so that their tax burden is lower. The average person cannot afford to pay 10 accountants to save them on their taxes and therefore are more burdened by tax rates.