Now that we’re in the waning months of the George Bush Presidency, one of the larger topics that comes up is the taxes. Both Senators Obama and Clinton are saying flat out that they will eliminate the Bush tax cuts for the rich. That they will increase the taxes on the rich and the corporations.
Four years ago, in the campaign leading up to the 2004 elections, this was also a topic. It was discovered at that time that John Kerry, the Democrat Presidential nominee who was in favor of eliminating the Bush tax cuts, paid 12% on his taxes. He and his wife are millionaire’s, yet they paid 12% in taxes. Through choices that they’ve made in their investing, they were able to pay less taxes.
In Michigan, the median income is $42,000 per year. Which means that the citizens of Michigan pay more, percentage wise, than John Kerry and his wife (the ketchup queen).
So if you’re making $40,000 per year, you’re paying your taxes, usually deducted from your paycheck. At the end of the year, you figure out your taxes and find that you are getting money back from the government for your taxes. It’s not that you’re not paying taxes, you just overpaid your taxes and they are returning the excess amount that you paid. They do not give you interest for the use of your money. They just return your overpayment.
So who’s paying the majority of taxes in this country? People that earn the most money are paying more than their share of the taxes. Those earning the top 50% in this country are paying 96.03% of the taxes. These figures are from the latest information available which was 2001. I have placed the chart from the US Treasury on the side.
Let’s forget about that portion for a moment and look at income. If you’re making $40,000 per year and you’re paying 28% in taxes, your tax bill is $11,200. If you’re making $140,000 per year, paying a 33% tax rate, your tax bill is $46,200 per year.
So what does everyone get for their tax money? What benefit are the richer getting that the middle class is not getting? Even if we went to a flat tax, and everyone paid 17% income tax on what they earned in a year as was proposed by Steve Forbes years ago when he ran for President. Again, using the same numbers. If you earned $40,000 per year your tax bill is $6,800 per year. If you’re earning $140,000 per year, your tax bill is $23,800 per year.
Again, I ask. What extra do the rich get for their taxes paid? Bigger house? They earned it, they made more money. More expensive car? They earned it, they made more money.
The rich don’t get their own lane in traffic. They have to deal with the same lanes as the rest of us when they drive somewhere. The gas they buy isn’t better than the gas we buy. They use the same gas. If I’m wrong on this, someone please point out where the gas stations are that say “Rich people here, poor people over there.”
Another fact is that corporations do not pay taxes. They write the checks for the taxes, but they don’t pay them. Corporations offer a product. The price of that product is determined by the cost to the Corporation to produce that product. First you need a building to produce the product. That has expenses built into it, such as heating, electricity, water. Then there is the worker to make the product. He/she must be paid and included in that cost is the expense of their health care provided by the company.
The company must also pay into social security for that worker in addition to the amount that the worker pays from his pay.
The company must also come up with their profit level. After all, they are in business to make money. There are costs involved with improving their product and adding other products on that enhance the first product. Then they are taxed for their business. That too is built into the price of the product.
By the time the product gets to the store shelf, the cost of creating the product are all figured into it to come up with a price to charge the consumer. That price includes the taxes the corporation must pay as well as the profit that they earn.
Corporations don’t pay the taxes, they build them into the cost of the product. When it arrives at the store, the store then adds their markup. After all, it costs them to provide space to put the product so that you’ll see it and buy it. They too have many of the same expenses that the corporation has. Utilities, store space, workers, their social security, their health care, and so on.
Once you pick up that product to buy it, you take it to the clerk to make your purchase, then another tax is added. Sales tax. The store doesn’t cover that for you. The corporation doesn’t cover that for you. You pay it. Now the liberal candidates are telling us that they will increase the taxes on corporations. The corporations aren’t going to pay this out of the goodness of their hearts. They will increase the price of their product.
What about personal taxes?
As you go through your personal taxes this year, look at your W-2 form. See how much in taxes was withheld. Then look at your tax form and see how much of that you’re getting back. Subtract how much you’re getting back from how much you’ve paid. Then just for fun, add $100,000 to your income and figure out what you’d have paid and the question that everyone should have is why are they paying so much more? Shouldn’t they be paying the same amount? What added benefit do they get from their taxes paid that I don’t get?
Compare the chart on the side of this blog and ask yourself why richer people are paying so much more proportionately than we are. What added benefit do they get that I don’t get? I’d really like to know the answer to that question.