Why Soaking The Rich Won’t Work

Obama and the Leftists are hitting the class warfare meme hard and trying to convince voters that the solution to our budget problems is making the wealthy pay their fair share.

I’ve shown before how the wealthy are already paying more than their fair share when you consider that their share of the income tax revenue is roughly twice their share of the total income in the US.  Iowahawk has also shown how increasing taxes will not bridge the budget deficit and I suggest you read his post now if you haven’t already done so.

In this post I’ll provide another simple way to see the lunacy of the Left’s claim that we don’t have a spending problem but instead have a tax revenue problem.

I’ll use the latest IRS data from 2009 and the US Government Spending site which shows the estimated 2012 federal government spending to generate the following graphs (feel free to check my math).  I’ll admit that using tax revenues from 2009 to compare with federal spending in 2012 isn’t exactly an apples to apples comparison but it’s not my fault the IRS hasn’t released data from later years and as you’ll see from the graphs, that even increasing these revenues with inflation doesn’t come close to matching our budget deficits.

You can see from the graph above that the amount of tax revenue from those making over \$200,000 per year was approximately equal to the tax revenue from those making less than \$200,000 per year.  Leftists reading this post will snap to a hasty conclusion that this proves the wealthy aren’t paying their fair share!  Math is hard and before you jump to that claim you need to realize that the income from those making over \$200,000 per year only accounts for roughly 25% of the total adjusted gross income less deficits of the US but they pay approximately 50% of the income tax revenue.  That means those making over \$200,000 per year are paying TWICE their fair share and this fact alone causes this favorite Leftist talking point to fail on simple math terms.

You can see from the graph above that even if we DOUBLE the income tax rate of those making over \$200,000 per year, we still don’t make up the \$1.3 trillion deficit our government will run in 2012.  We’d have to take 100% of the income from those making over \$200,000 per year to balance the budget and actually run a surplus.  So even if Leftists controlled the House, Senate and White House and they chose to enact this radical agenda, ask yourself why these individuals would continue to work if all their money went to the federal government?  This would only work for 1 year and then we’d be faced with another budget deficit that would be far more than \$1.3 trillion because those who make over \$200,000 would chose to not work and then the federal government would lose out on half of their income tax revenue.

The class warfare meme is crazy and fails upon a simple math test so the next time you hear a Leftist saying the wealthy need to pay more, ask them to prove it with math.  They can’t!

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