What is a Taxpayer's Fair Share?

My View by Jim Yacavone

(September 1, 2016)

Hillary Clinton has run a lot of ads promising to make the wealthy pay their “fair share.” President Obama and the Democrats use the phrase often. This got me to thinking—what is a fair share of federal income taxes? 

Let’s start with the fact that 45 percent of eligible taxpayers—about 40 million of them—pay no income tax at all. Some of those who pay no income tax actually receive money from the IRS. According to the Tax Foundation, an independent tax policy organization, “low-income families not only do not have an income tax liability, but they receive generous checks back from the government as a result of the ‘refundable’ portion of the child credit and the Earned Income Tax Credit.” (Only the IRS and the U.S. Congress could call such a payment a refund. Talk about Orwellian doublespeak.)

A share is defined as part of a larger amount that is divided among a number of people. By definition, then, taxpayers who pay no income tax do not pay a fair share because they don’t pay any share at all. Which means that the rest of the taxpayers—the 55 percent who pay income tax—pay more than their fair share since they pay the share that the other 45 percent don’t pay.

We have a “progressive” tax system—not because it’s enlightened but because the tax rate increases with income. For example, the 2016 federal income tax rate for a single person earning $50,000 is 28 percent but for a single person earning $100,000 it’s 33 percent. A single person who earns more than $415,150 has a 40 percent tax rate.

Why is it “fair” to tax higher income earners at a higher rate? Do they have a greater right to use federal highways than lesser wage earners? Does the U.S. military defend them better? Does the Federal Centers for Disease Control protect them better? Does their higher tax rate give them any more right to federal services and benefits than the less wealthy? The answer is no. In fact, it’s just the opposite—persons with higher incomes are disqualified from getting many government services and benefits. And yet they are taxed at a higher rate.

Look at it another way. Would you think it was fair if you had to pay a higher price for the same item of merchandise simply because you make more money? Would you think it was fair if you had to pay more for a movie ticket because of your income bracket? I don’t think so.

There are many, many people who are fortunate to have an occupation that puts them in a higher income tax bracket. In the vast majority of cases that’s not because the federal government gave them any special favors or benefits or opportunities not available to everyone else. No, it’s because they studied hard and worked even harder in their careers. The government didn’t pay their tuition or take their tests. It doesn’t help them work evenings and weekends. It didn’t make the sacrifices required to be successful. What government does is punish them for their success.

The truth is that there is nothing “fair” about government imposing a greater income tax burden on higher income earners Our income tax system is that way simply because lower income voters outnumber higher income voters and the federal government has the coercive power to compel those with higher incomes to pay more.

And now Hillary Clinton wants the wealthy to pay even more. What’s fair about that?

        That’s my view. What’s yours?