Note: If you become an annual paid subscriber, you will receive an autographed copy of my memoir.
How many times have we heard Bernie Sanders, Elizabeth Warren, and other Democratic members of Congress as well as economists and left-wing pundits assert that the top earners do not pay their “fair share of taxes?” These economic illiterates never identify what is their fair share, except to say that wealthy taxpayers should pay more income taxes. Why? No answer.
A progressive income tax, which was made legal by the 16th amendment, is one of the ten planks of The Communist Manifesto. We had an expensive and lengthy cold war against the communist “evil empire”, the Soviet Union, funding it with a major plank of The Communist Manifesto. You cannot make this up.
Now, let’s look at the data that economic illiterates from Bernie, AOC and the tax grabbers ignore regarding the “fairness” of the tax code.
(Remember TINSTAAFT. There is no such thing as a fair tax. All taxes are coercive and therefore should not exist in a free society. However, if taxes are to be levied, there is a “fair or equal tax,” according to economist, historian, and libertarian philosopher, Murray Rothbard. See Power and Market. Rothbard states: “Equality of taxation,” means just that – a uniform tax on every member of society. This is also called a head tax, capitation tax, or a poll tax… Each person would pay the same tax annually to the government. The equal tax would be particularly appropriate in a democracy, with his emphasis on equality before the law, equal rights, and absence of discrimination and special privilege. It would embody the principal: “One vote, one tax.”)
In short, if we had a head tax, the federal government would obtain the funds it would need for a “constitutional budget.” And yes, it would be incredibly low because there are tens of millions of Americans who earn less than $50K per year. And if anyone thinks they would not be taxed enough under a head tax, they could increase their share to the IRS.
Getting back to the fair share nonsense. As Robert Frank reported this morning on CNBC, 40% of Americans do not pay the federal income tax. In addition, according to the WSJ, “…about 43% of taxpayers with $50,000 or less [in income]—will earn about 10% of total income and owe minus 4.8% of income taxes.” The Earned Income Tax Credit and the Child Tax Credit provide low-income families money (they didn’t earn) from other taxpayers. This is the brainchild of “free market” economist Milton Freidman, who with other economists advocated a “negative income tax.”
Meanwhile, the top 10% of income earners pay 80% of the income tax and the top .5% of income earners pay 39% of the income tax. Fair share? How about highway robbery?
We are stuck with a commie tax policy supported by the DC establishment, most economists, and virtually all pundits. America, the land of the free? Not quite. We are a long way from a free economy, which would be the greatest anti-poverty program, ever.
This is the battle worth fighting for. Not nonbinary bathrooms.
On April 29th I will be speaking at the Libertarian Party Mises Caucus in Austin, TX, one stop in the Human Action Tour. See if there is an upcoming one in your area, https://lpmisescaucus.com/take-human-action-tour/.
My latest piece on the economy was published in Fortune, https://fortune.com/2023/03/27/recession-2023-layoffs-tech-finance-unemployment-outlook-fed-rates-murray-sabrin/ This is an update of my 2021 forecast, https://fortune.com/2021/12/09/next-recession-heres-everything-bubble-markets-2021-2022-covid-murray-sabrin/
Murray Sabrin, PhD, is emeritus professor of finance, Ramapo College of New Jersey. Dr. Sabrin is considered a “public intellectual” for writing about the economy in scholarly and popular publications. His new book, The Finance of Health Care: Wellness and Innovative Approaches to Employee Medical Insurance (Business Expert Press, Oct. 24, 2022), and his other BEP publication, Navigating the Boom/Bust Cycle: An Entrepreneur’s Survival Guide (October 2021), provides decision makers with tools needed to help manage their businesses during the business cycle. Sabrin’s autobiography, From Immigrant to Public Intellectual: An American Story, was published in November, 2022.