The day has come and gone. What day am I referring to? Dreaded Tax Day! Is this the most disliked day of the year? You may remember President Ronald Reagan’s famous quote about Tax Day. Reagan, the eternal optimist proclaimed, “Republicans believe every day of the year is the Fourth of July, but Democrats believe every day is April 15.” Yes, income taxes are in my thoughts today.
Many of us also have memories that run through our minds that are left over from our childhood. My mother used to tell me whenever I would complain about what I perceived as someone getting unfair treatment, “What’s good for the goose is good for the gander.” Knowing that there is a gender difference between a goose and a gander, I queried my sister to see if Mom might have been referring to sexual disparity. We both concluded that she absolutely was not. She meant if something was deemed fair for one person, then it should be fair for all concerned.
Yes, fairness and taxes are on my mind today. How many times have you heard President Obama say that we must pay our fair share — every American no matter how rich? My understanding of what the president said and continues to say is if it is fair for one, then it must be fair for all. No one should receive special treatment when it comes to paying income taxes — no matter how much wealth they do or do not have.
According to the Committee on Joint Taxation, (a respected bipartisan committee of Congress) 51 percent of American households paid no income tax in 2009. Not only that, 30 percent of American households actually made money from the tax system by way of the Earned Income Tax Credit and other refundable credits. According to the Urban-Brookings Tax Policy Center in 2007, the richest 20 percent paid 68.9 percent of federal taxes and the top 1 percent paid 28.1 percent. And this is fair? This seems like redistribution of wealth to me.
As you know (thanks to the 16th Amendment) those of us who pay income tax, pay what is called a progressive tax. H. Peyton Young, professor emeritus, at John Hopkins University said, “One idea behind progressive taxation is to level the playing field so that the wealthy don’t hold an iron-grip on economic opportunity. Rather, a progressive income tax system aims to enable the poor to climb the socio-economic ladder.” The polar opposite thought comes from the CATO Institute. “A progressive tax violates the very heart and soul of the Framers’ Constitution of liberty. Our constitutional democracy rests on the principles that individuals are equal under the law.”
The 16th Amendment is the law of the land. We have to live with a progressive tax system and the IRS, but some politicians are talking about alternatives to our current tax structure, two of which are the “flat tax” and the “fair tax.” The “flat tax” is an income tax system requiring everyone to pay the same tax rate regardless of their income, and it eliminates all loopholes. Others talk about a “fair tax” which eliminates all income tax and adds a sales tax or consumption tax to all products that we buy.
The House Budget Committee chairman, Rep. Paul Ryan, suggests a slightly different version or a “flatter tax” where instead of six tax rates like we currently have, there are just two tax rates — 10 percent for lower and middle income tax payers and 25 percent for the top income earners. This is in comparison to the President’s proposal that suggests the highest income earners pay income tax at a rate of 44.8 percent (also known as the Buffet Rule). Rep. Ryan’s proposal also includes a corporate tax rate of 25 percent. This is a far cry from the current 41 percent, which gives the U.S. the dubious distinction of having the highest corporate tax rate in the world. If the highest income earners, also called the job creators, had more disposable income, then more jobs would be created.
Every time I listen to the news, I hear President Obama’s words crying out that we must pay our fair share — every American no matter how rich (and I might add no matter how connected one is). Prior to this tax day, 36 people in President Obama’s executive office owed $833,970 in back taxes. How embarrassing this must be for the President who is so focused on everyone paying their “fair share.”
Yes, I do think we should ALL pay our fair share. It is also my belief that the current tax structure only adds to the class warfare that is dividing our country, making those who arguably are the most productive influences in our economy, the job creators, pay more than their “fair share.” It is time to change our tax structure, and time to end the class warfare. I think my mother was very wise. “What is good for the goose is indeed good for the gander.”
WILLEE COOPER is a former teacher and military spouse. A Hopkinsville resident, she is president of the Kentucky Federation of Republican Women. Her column runs on the first and third Friday of each month. Reach her at email@example.com.