The Wealthy and Taxation: What is "Their Fair Share?"

The Pew Research Center put out recent survey data as to what the American people think about the tax system.  When asked about "what bothers you most about the tax system," the number one answer was "the wealthy people don't pay their fair share."  Not surprisingly, there is a partisan divide on this one.  73% of Democrats agree, whereas 38% of Republicans agree.  Interestingly enough, 57% of Independents agree.  For those who feel this way, here's my question to you: what constitutes as one's "fair share?"

Before figuring out whether the rich are paying their fair share, it would behoove us to see how much everyone is paying in taxes.  Looking at the percentage that individuals pay in taxes (both federal and state/local) comparison the shares of comprehensive household market income, the top forty percent pay more in proportion (see Tables 21 and 22).  If they pay more in proportion, then the dollar amount they pay is surely higher than what the poor pay.

Let's consider the notion of redistributive justice, which allocates property and wealth in a "socially just" manner.  The poor don't have enough, and it's up to the government to redistribute wealth so that they can have a decent living.  That would be typical rhetoric from the Left.  For the Left, desired outcome would be a smaller Gini coefficient, which is a measurement of income inequality.  That could very well sound fair.  We're all equal in the sense that we receive the same amount, which would eliminate any income inequality.  But it was Winston Churchill who said that "socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy.  Its inherent virtue is the equal sharing of misery."  The notion of equality of income has never boded well for mankind.

The Pilgrims tried income distribution and nearly died because of it.  The Former Soviet Union gave it a go, and life couldn't be more miserable.  Chairman Mao Zedong redistributed food in the Great Leap Forward, which killed well over twenty million.  Over history, the United States government has implemented certain programs (e.g., Medicare, welfare, Social Security), and debt has now reached 100% of GDP.  Amazing how any attempts at equality of income minimize equality and opportunity.

This country was built on the idea that all men are created equal.  If that were the case, then everyone would pay the same percentage in taxes.  A progressive income tax does not do that.  You know what does?  A flat tax.

Two more alternative views before I conclude.  The first is that life is not fair.  There has always been income inequality, and no government programs can adequately mitigate the issue.  The second is there is nothing wrong with income inequality, something which I have discussed before.

Do I think the rich pay their fair share?  Yes, I do.  Since rich people pay more in absolute dollars and percentage-wise in tax dollars than the poor, I think they pay more than their fair share in taxes.  But good luck telling that to those who perpetuate class welfare in order to aggrandize Big Government.