Fair?

I’m constantly amazed at what different people define “fair” as.  In his commentary to rally Democratic support, Robert Reich, former secretary of labor during the Clinton administration, offers the opinion that “if the super-rich paid their fair share of taxes, government wouldn't be broke”.  Apparently, Reich’s version of fair means that those with higher incomes should pay a disproportionately large portion of the total income tax.  Referring to the IRS’s own numbers for adjusted gross income share by percentage and total income tax share by percentage for different segments of the top wage earners in the United States (rows 146-191 of the linked Excel sheet); you will see an interesting trend.  The tax burden on the richest of Americans has increased over the period of time that this table covers.  The year 2007, the most recent data available, shows that the top 0.1% of wage earners in the U.S. earned 11.93% of the total income but paid 20.19% of the total income tax collected.  In overly simplified numbers, the top 0.1% made 1/10 of the money, but was ultimately responsible for 1/5 of the income tax.  Reich refers to the richest 5% of Americans in his argument.  Their numbers don’t seem to be fair either.  They earn 20.53% of the total income and pay 37.44% of the income taxes collected.  Surprisingly, the top 50% of wage earners earned 87.74% of the total income in the U.S., but paid 97.11% of the income taxes.  Extrapolated out, that must mean that the bottom 50% of wage earners in the country only paid 2.89% of the tax burden.  I’m definitely not for kicking the small guy when he is down, but to make the assertion that the rich are not paying their fair share simply is not supported by the numbers.

How often do we hear politicians speak about the need and desire to cut spending to curb national debt?  Almost everyone agrees that there is a problem.  Check out the US Debt Clock for real time analysis of the current situation.  What is unfortunate is that if you reference the list of largest budget items on that website, Joe Scarborough of the Politico points out that neither major political party will consider touching any of those items.  Politicians only focus on discretionary spending items and ignore areas that could have the largest impact.  Until politicians are willing to start considering cuts to Pentagon spending, Medicare, Social Security, and other “off limits” expenditures, we are doomed to  digging a hole too deep to get out of.