9%….I got an email last night from a reader in response to this post about the rich fighting so hard these days to reduce the taxes they pay to support the government. It said, in part:
Will paying taxes actually improve the part of America that helped make these guys rich? Do taxes pay back the part of the country to whom the rich are indebted?
Think about it. How are these rich and talented people indebted to welfare recipients and income redistribution beneficiaries? What did these beneficiaries do for the rich and talented to merit being “paid back”?
My initial reaction was discouragement. This was a smart guy, but he just took it for granted that we should only expect rich and talented people to support government programs that directly benefit them ? or might have benefited them in the past. And programs to support the needy, the sick, and the elderly? Why should successful people be expected to pay taxes for that?
It is such a small view of America. We live in the greatest country that the mind of man has yet built, but too many people measure that greatness by little more than their ability to amass a fortune and the fervency of their support for our troops. Why not measure it as well by the fervency of your support for civil liberties, your support for universal education, and your support for decent treatment of the needy, the sick, and the elderly? Isn’t that just as much a part of what makes a country great? And doesn’t that part make its own contribution to an American culture that has inspired greatness in so many of its people and allowed so many of them to become millionaires in the first place?
Of course it does. Just look at the kid who got a shot only because some public school teacher set him straight when he was 10 and got him off the street. Or the teenager who went to a state university ? or perhaps to Harvard ? because of a federal loan guarantee. Or the woman who was only able to start up her own company because she wasn’t forced to take a job at a warehouse in order to pay for her grandmother’s illness ? because Medicare paid for it. There are millions of stories like these all across America.
I shook my head, wondering what causes the blinkered vision that doesn’t see this and knowing that nothing I could say could really combat it, and then, being the analytical person that I am, I started to think about the question in terms of numbers. And I wondered: rich conservatives complain all the time about welfare programs and income redistribution and all their assorted socialist brethren, but how much do those programs actually cost them? How much does someone who makes a million dollars a year pay for those things?
Well, on the generous assumption that that million dollars is pure salary, our millionaire probably pays about $300,000 in federal taxes. Out of that, he pays about $5,000 to Social Security, $15,000 to Medicare, and roughly $70,000 toward the social welfare programs that make up approximately a quarter of the rest of the federal budget.
That’s a total of $90,000 out of that million bucks. The rest of his taxes ? $210,000 ? pays for national defense, interest on the national debt, building highways and prisons, funding the courts, and so forth. In other words, the vast majority of it goes for all the stuff that no one really complains about.
So that’s it. Even if you take the complaint at face value, the stuff they’re complaining about ? because it doesn’t benefit them personally ? only amounts to about 9% of our millionaire’s salary.
9%. That’s what they’re fighting so desperately about, and that’s what the war over the dividend tax cut is all about: reducing that 9% of their salary that goes not to programs that benefit them directly, but instead to helping the needy, the sick, and the elderly.