Should The Rich Pay their Fair Share?

          I got a phone call last week asking me to call my U.S. Congressman and ask him to make the rich pay their fair share.  I feel my congressman that is doing an outstanding job, but I understand partisan politics. 

        Let’s get back to the rich paying their fair share.  I would like to modify it to “everyone” paying their fair share. 

        The American Magazine gave the following quote:

“The latest data show that a big portion of the federal income tax burden is shouldered by a small group of the very richest Americans.  The wealthiest 1 percent of the population earn 19 percent of the income and pay 37 percent of the income tax.  The top 10 percent pay 68 percent of the tab.  Meanwhile, the bottom 50 percent – those below the median income level – now earn 13 percent of the income, but pay just 3 percent of the taxes.  These are proportions of the income tax alone and don’t include payroll taxes for Social Security and Medicare.”

Some people may argue with some of the specific figures, but they are basically correct.   I understand the “Make the rich pay their fair share.” argument has a great emotional appeal, but obviously is not supported by the facts in general.

I do agree some of the rich don’t pay their share, so what is the problem?  Warren Buffet paying a smaller percentage than his secretary is an often-quoted example.  General Electric paying zero taxes is an even more extreme example. 

If these individuals and corporations are not paying their share, it means that the top ten percent that are paying taxes may be paying more than their fair share.  What’s fair?

What is the problem?  How do we get everyone and every business to pay their fair share?  The problem seems pretty clear to me.  The problem is the 70,000-page IRS tax code. 

The tax code is a joke.  There are too many ways for the rich to avoid paying their “fair share.”  I am surprised the rich pay any taxes at all.  General Electric paid no taxes.  If the tax rate were 100 percent, it wouldn’t make any difference.  GE would still pay zero taxes. 

If there are not enough ways to avoid paying taxes and you are a General Electric, make some more campaign contributions and the tax problem should be fixed.  You may even get a return on the campaign contributions in the form of stimulus money or subsidies. 

We subsidize all kinds of industries including the oil industry.  Stop.  Actually, I prefer the term “Porkulus” instead of stimulus or subsidies.  It is probably more descriptive in many cases.

Listen to most politicians talk about solutions for the economy, unemployment, energy cost and many other problems, and you will hear tax credits and subsidies mentioned as part of the solution.    You have got to be kidding me.  Our tax code is already 70,000 pages and full of loopholes. 

We have to get real about fixing this problem.  We must elect representatives that are willing to fix the problem.  This means people that are willing to give up power and money for the good of the country.

The IRS tax code needs to be totally eliminated and start over.  A “flat tax” or the “Fair Tax” both have merits.  Even the “9-9-9” plan proposed by Herman Cane had merits.  The current tax code is no longer a workable option.  We must make some major changes.

Another benefit of total tax reform will be the drastic reduction of the size of IRS.  The IRS now has over 100,000 employees, which could be trimmed significantly.  The IRS is part of The Department of the Treasury, which has a $14 billion budget.   We must reduce the size and cost of government.