Politics With Peyton: Taxation for Thee but Not for Me
Representative Alexandria Ocasio-Cortez walked through the 2021 Met Gala wearing a white mermaid dress with red text stretched across the back that read, “Tax the rich.” The decision to wear the dress, which was designed by Aurora James, ensured that Ocasio-Cortez continued a heated discussion within the political world: do the rich pay their fair share in taxes?
An Associated Press poll found that two out of three Americans do not believe the wealthy pay enough in taxes.
So, are the rich really taxed their fair share? An example presented by The Heritage Foundation sums this up perfectly. I will tweak it in order for us to understand and relate to it better. Let’s say that after one of LU’s football games, a group of 100 people decide to celebrate the victory at La Carreta. Every person agrees to go in on one bill, and then split it evenly.
At the end of the meal, it is time to pay the bill and it rings up $5,000. Therefore, every person would pay $50, as they agreed.
However, if we paid this bill in the same manner we pay our income taxes, then it would be split up differently. Those who are in the top income bracket would pay about $97 per person, and those in the bottom half would pay about $3 per person, with nearly 40 people not paying anything at all. The richest person at the table would pay nearly $1,750.
Yet, people claim the rich do not pay their fair share.
Historically, this is not the case. According to The Heritage Foundation, in 2011, the top 1% received 19% of the total U.S. income and covered 35% of the federal income tax. In 2018, the top 1% earned 21% of the U.S. income, and paid 40% of entire federal income taxes. Furthermore, if you expand this, the top 10% of these earned 48% of the income and payed 71% of federal income taxes.
The U.S. actually has one of the most progressive tax systems in the world, in which the highest income earning individuals pay the most in taxes. Even more liberal institutions found that in 2020, the poorest 20% of Americans paid an average tax rate of 20% in sals and state taxes.
The problem in America is not whether the rich pay a fair amount but the issue of government spending.
The Heritage Foundation released its 2021 Index of Economic Freedom, which reflected that the U.S. has received its lowest ever ranking in overall economic freedom: 20th in the world. The federal government’s spending as GDP percentage is projected to continue to grow past its already historically high average.
Government spending is the reason the national debt held by the public has outgrown the size of the economy and is projected to increase to 202% of GDP by 2051.
Despite what celebrities say and AOC’s hypocritical dress, we do not need to make the rich pay more – the rich already pay more than their fair share. If we continue this idea of “the more you make, the more we take”, then what incentive do we have to work? We must promote the work ethic, competition within the markets and less government spending in America.
MacKenzie is the opinion editor. Follow her on Twitter at @PeytMacK.