...Whoa! Massive TRANSFER of wealth? Really? How is this happening? Last time I looked, the bottom 50% of the country pays 2% of total taxes. Is there something going on that I don't know about?
Dear brother, to understand what I am saying you have to look at the broad picture. From the tax foundation summary
here I give below the % breakdown of who pays what % of taxes.
[TABLE="class: grid, width: 221"]
[TR]
[TD]Wealth[/TD]
[TD]% Taxes paid
[/TD]
[/TR]
[TR]
[TD]Top 1%[/TD]
[TD="align: right"]37%[/TD]
[/TR]
[TR]
[TD]1 - 10%[/TD]
[TD="align: right"]34%[/TD]
[/TR]
[TR]
[TD]11 - 40%[/TD]
[TD="align: right"]27%[/TD]
[/TR]
[TR]
[TD]Bottom 50%[/TD]
[TD="align: right"]2%[/TD]
[/TR]
[/TABLE]
So, you are correct, the bottom 50% of Americans are paying only 2% of the taxes. But, pointing to this is diverting the attention from where the banditry is actually taking place. This is what good magicians do, divert attention away from where the slight of hand involved in the trick is taking place.
I would like to explain this magic trick the already wealthy use to amass even more wealth with a simplified illustration. Let us suppose the total wealth produced in one year is $1,000. Also suppose that in the aggregate $500 is necessary for the whole nation to maintain a reasonable life style, at the current level of technology, for one year. This leaves a surplus wealth of $500. The important question now is, how is this surplus going to be shared?
Let us make some reasonable assumptions. We all know that the bottom 50% are barely making ends meet, so they get nothing. We also know the top 1% and the remaining 9% of the top 10% get a lion's share of this surplus, and the balance 40% get a little bit scraps. So, I am going to use these percentages: 50% of the surplus for the top 1%, 40% for the next 9% and 10% for next 40%. Now, I know I just pulled these numbers from thin air, but let us not quibble about these percentages, you may change it to what you think are honestly reasonable and the point of my presentation will not significantly change.
Now the question of taxes. Let us suppose 20% of total production is taxes, i.e. $200. This is going to be collected as shown in the above table.
Now let us put all of this together in the following table:
[TABLE="class: grid, width: 777"]
[TR]
[TD]Wealth tier[/TD]
[TD]% Taxes paid[/TD]
[TD]Share of surplus %[/TD]
[TD]Share of surplus $[/TD]
[TD]Taxes paid[/TD]
[TD]Share of surplus after taxes[/TD]
[/TR]
[TR]
[TD]Top 1%[/TD]
[TD="align: right"]37%[/TD]
[TD="align: right"]50%[/TD]
[TD] $ 250[/TD]
[TD] $ 73.46[/TD]
[TD] $ 176.54[/TD]
[/TR]
[TR]
[TD]1 - 10%[/TD]
[TD="align: right"]34%[/TD]
[TD="align: right"]40%[/TD]
[TD] $ 200[/TD]
[TD] $ 67.47[/TD]
[TD] $ 132.53[/TD]
[/TR]
[TR]
[TD]11 - 40%[/TD]
[TD="align: right"]27%[/TD]
[TD="align: right"]10%[/TD]
[TD] $ 50[/TD]
[TD] $ 54.56[/TD]
[TD] $ (4.56)[/TD]
[/TR]
[TR]
[TD]Bottom 50%[/TD]
[TD="align: right"]2%[/TD]
[TD="align: right"]0%[/TD]
[TD]$0[/TD]
[TD] $ 4.51[/TD]
[TD] $ (4.51)[/TD]
[/TR]
[/TABLE]
You see, even if the taxes of bottom 50% are excused, i.e., they pay not even the 2% but 0% taxes, still the top 10% are making out like bandits at the expenses the rest of the 90%.
Cheers!