washington outlook
Let’s Try Shared Prosperity
Richard S. Davis
The recurring appeals to “shared sacrifice” miss the point. Policy makers should
drop the divisive rhetoric and focus on plans that unite us in shared success.
In August, the Oracle of Omaha took to The New York Times’
editorial pages to complain that he wasn’t taxed enough. Warren
Buffett is not just another “rich man talking.” People listened
and responded. His opinion piece fueled the ongoing flap about
tax fairness, shared sacrifice and the obligations of the well off.
redistribution lobby also fails to acknowledge that the federal
tax code is already highly progressive.
Economist Mark Perry tells us just how much so: “In 2007,
the ‘mega-rich’ [reporting income of $10 million or more]
represented only 0.0129 percent of American taxpayers ... And
yet that small group of ’mega-rich’ paid nearly 10 percent of all
federal income taxes paid that year.”
There are consequences. With the recession, the ranks of the
mega-rich have dropped by 55 percent, according to The Wall
Street Journal, which notes that “disappearing millionaires”
account for at least $130 billion of the higher 2009 federal deficit.
The Tax Foundation reports that the top 1 percent of taxpayers
account for 20 percent of the nation’s income and pay 40 percent
of the income tax. Meanwhile, half of all American households
pay no federal income tax.
Of course the federal tax code is a mess — rife with special
favors, social engineering and mind-numbing complexity. Real
tax reform debate aimed at simplification, broadening the
base, lowering the rates and eliminating double taxation is
long overdue. And H