Do the rich pay their fair share of taxes?

One of the major discussions in the United States today, do the rich pay their fair share of tax revenue? The obvious answer to this question is yes they do. Not only do the rich pay their fair share, they pay more in taxes than the average American earns in one year. There are three key points that prove this statement, the numbers, the many different tax rates, and the way we tax corporations.
The richest citizens in the United States of America, pay the majority of the tax revenue that our government takes in. From Macmillan’s book on Macroeconomics, the top 1% pay 20% of all tax revenue. Not only is this stat insane, but it is also the complete opposite of fair. However, we have a progressive income tax system at the federal level, which makes this happen. On top of that, the top 20%  pay 75% of the federal income tax. The counter argument says, the lower income citizens pay a bigger percent of their total income. This statistic blows away that claim because a flat tax rate would mean they were equal, however our progressive tax system makes their claims impossible. Another huge burden on the claim, is the fact that the bottom twenty percent do not pay any federal income tax at all. Some have a negative tax rate in real terms. The rich not only  pay their fair share, but they pay the share of many other citizens.
The United States has many more taxes than just income tax. We also have property tax, sales tax, and the FICA tax. Property taxes are a big sum of money when it comes to very expensive property. Many people’s property taxes on just one house in Florida, are well over $75,000 a year. On top of this, people with more money for the most part spend more money than those who are financially struggling. Sales tax is collected on these items, which increases the total amount of taxes paid. A tax that is taken out for social security and medical purposes, is called the FICA tax. This tax is 7.65% of your income, which is a flat tax rate. This rate makes everyone pay the same percent of their income, however the rich still end of paying a lot more to these services. In every way possible, the rich pay a bigger share of taxes.
Another big factor in income taxes, is the topic of corporations. The corporate tax rate is around 35%, depends on different factors. Double taxation has made wall street pay lots more in taxes. Many people complain that wall street does not pay taxes, however it is clear they pay taxes on the same income twice. A major counter to this is, corporations keep money in the banks.  Holding money in the bank not only helps the banking system, but it also does not help major corporations. The interest earned is not worth their time, they would rather reinvest. Holding money in a bank however, is the way everyday people get loans. Without the holding of money, no one would be able to buy a car, house, or any item they finance.
The rich not only pay their fair share of the taxes, they pay most of the taxes. The argument to tax the rich at a higher rate, because they do not pay their share, is false in numerous ways. The rich allow for investment, job creation, and our banking systems to be fully functioning. The percentage of taxes paid by the rich show these results. Every tax rate, makes the rich pay more in total tax dollars.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s