While class warfare is nothing new in America, it has reached new heights with the President of the United States and Congressional Democrats demanding that the wealthiest Americans pay more money in taxes to support more government imposed social programs. Even worse, some have hinted that the prosperous do nothing for this country as far as creating business or hiring employees goes.
This post is an attempt to educate the average American as to how the wealthy contribute to the economy in ways that are viewable and are rooted in common sense, not emotional babble.
Since Congressional Democrats reasoning for taxing the wealthy at higher rates is to help the poor, let’s look at the poor first. If you fall at or below poverty level, you pay taxes on your income from each paycheck. At the end of the year, however, you receive all your tax money back AND hundreds to thousands of dollars in taxpayer subsidized unearned ‘tax credit’. A startling 47% of Americans fall into this category.
Now, let’s talk about the %1 (this equals approximately 3 million people) of America that grosses over a million dollars a year. Currently, they pay 35% (or $350,000 per year) in federal taxes alone minus deductions…and the other 50% of the rest of us fall somewhere in between at various tax rates depending on income.
In short, the poor pay no taxes and receive free money from taxpayers who fall in the middle to upper class wage earners. How is it that the poor can complain that the wealthy do not contribute when in reality, it is the other way around? Yearly, through tax credits, the poor receive help from middle-class and wealthy Americans.
If you’re a middle-class or wealthy American, you probably own stock in different companies. This creates a cash flow for businesses to do research and development. This is how Apple/AT&T gave us technology such as the iPhone and Google/Verizon the Droid. Furthermore, companies that introduce new products, such as plasma, LCD, and 3D televisions, to the marketplace need a supply of money to meet the demand of the product. So they will produce a small quantity and sell them at a high price point. If demand exceeds supply, the company uses the money to invest in mass production and the price point eventually falls. If the product does not sell, the manufacturer either drops the price point and discontinues the model or recalls it. The very law of supply and demand requires some kind of investment in supply for demand to occur.
Can the poor, or middle-class for that matter, afford to invest in these new technologies? If not, what happens to research and development? How can jobs be created without consumer capitol?
Approximately 2% of (6 million – 1 in 50 people) Americans make over $200,000. Any one of these people could run a serious political campaign against an incumbent. A shining example of this is Linda McMahon in Connecticut. She is a self made millionaire who is tired of the establishment. She has the individual funds to spread her message, run television ads, and campaign effectively against her opponent. If Linda were poor or middle class, she would not even be a blip on the radar the way the election system currently works.
Dollars turn to cents with each program the federal government sets up. Due to general failures and high overhead costs, tax money is wasted that is collected from middle class and wealthy citizens… and the government wants more to use and abuse? It is nothing but thievery.
Regardless of your own financial situation, you have to realize class warfare is a dangerous ideology. Loss of income means you buy less, you buy less, stores and manufacturers have to lay-off, technology and research for experimental medications and new gadgets will be stifled. This will create more of a gap between the rich and poor as the middle-class join the poor and unemployed.
The next politician you hear spewing class warfare, tell them how the wealthy contribute to the economy and that you would like a representative who wants more middle-class to get rich and more poor become middle-class.