Wednesday, January 25, 2012

Unfair?

President Obama seems intent on making Tax the Rich the mantra of his reelection campaign. He eschews economics for emotion in his appeal because, well, there really aren't any good economic arguments to support that position. But just for the moment let's examine the facts behind the emotions of the "fairness" issue. The President's main complaint seems to be that it's "not fair" for The Rich to be paying less of their income in taxes than the Middle Class. First of all, that's not factually correct as is readily apparent from the CBO data below (You have to assume that the President has access to this data if I can find it, so he either has a very poor memory or is just lying about it).


Average Income Tax As %
Quintile Of Total Income
Top 1% 18.8%
Rest of Top 20% 11.8%
Middle 20-80% 4.2%
Bottom Quintile -5.6% (Negative due to tax credits)
Source: Congressional Budget Office


Beyond that, though, is this word "fairness".  What exactly is unfair about the top 1% of earners paying 19% of the income in federal income tax while middle class families (presumably those in the 20th through 80th percentile of income earners) pay 4% of their income in federal income tax? Is that 4% really unfair? If so, what should it be then? Zero?  Or is the President perhaps simply disingenuously mining the economic ignorance of the public? Do you really think the Middle Class should be incensed that they are "unfairly" being forced to cough up a whopping 4.2% of their income in federal income tax?

The President is not the first person to appeal to blind envy -- nor will he be the last. After all, they always teach in debate class that when you don't have a good factual argument, call people names and appeal to their prejudices.

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