By Jeff Pett, Fleetwood Group
We have heard a lot lately about “the 1%”, and “the 99%”, the “9-9-9 plan”, and who makes how much, and who pays more taxes, and who should pay more, and on and on and on. It’s enough to make your head spin, and is more than a little hard to follow. I don’t think I’m alone when I say that I have had a hard time getting a real grasp on what the “Occupy” movement is trying to achieve. Even some of my quite-left-leaning friends refer to it as having “a fuzzy agenda” and, as such, cannot support them.
My take on it is they are unhappy with two things: the people with a lot of money are making too much, and corporations are getting too much “corporate welfare.”
While I don’t agree that anyone should have their income potential limited (why would we put handcuffs on the Steve Jobs of the world?), I do agree on the corporate welfare thing. As much pain as we’ve been through the past few years I tend to think that there should have been no such concept as “too big to fail.” Had we allowed the strong corporations to survive and the errant ones to die, it might have been very painful for a shorter period of time, but we might already be looking back at the painful times instead of wondering when they will end. All those corporate moguls of the companies that would have been allowed to die would have been properly “rewarded” for their poor leadership, and it would have been a wakeup call to business leaders and investors at all levels that you really can lose it all.
The Occupy movement has gotten me thinking more about the tax burden we have saddled ourselves with, too. Yes, ourselves. We elect people to represent us, and we donate money to organizations that lobby those elected officials to try to influence their votes in our favor. And so, in the end, we have met the enemy, and it is us. We need to be more personally involved in the system to make it change.
I have heard it said more than once recently that over 50 percent of the US population does not pay any federal income tax. That can’t be good. What nongovernmental organization in the world gives you free membership? If what they say is true, the bottom 50 percent have full membership privileges in the USA club, but pay no dues. We don’t tend to put much value on things that don’t cost us anything, right? So this is really unhealthy, both for those paying $0 and for the country. It seems to me that everyone should pay at least a minimum federal tax, even if that is only $100. Then every citizen would have some skin in the game and would likely value their citizenship that much more.
I did a little online research on taxes and pulled these facts off the National Taxpayers Union website (all figures are for 2009):
- The top 1% of income earners paid 36.7% of all federal income taxes.
- The top 5% paid 58.6% of all federal income taxes.
- The top 10% of income earners paid 70.5% of all federal income taxes.
- The top 25% of all income earners paid 87.3% of our federal income taxes.
- The bottom 50% in terms of income level paid only 2.3% of all income taxes that the federal government collected.
What do all those stats tell me? Mainly that our tax system already taps the top 5% heavily. Our system is quite “progressive”, that is the more you make the higher portion of your income you pay to the government. The top 10% of all income earners already pay over 2/3 of the income tax revenue collected to run our government.
The Occupiers are frustrated, and I get that. Times are not good, so jobs are less plentiful and making ends meet has never been tougher in our lifetimes. But I think their anger is misguided, and their agenda is too “fuzzy” to get anything done to help our situation. Here are some of my suggestions to redirect the energies of the Occupy people:
- Rather than vilifying the “1%” maybe we should be “Occupying” the White House and the Capital for putting tax loopholes in that allow businesses and individuals to reduce their taxable incomes, and for spending more than they are taking in;
- Maybe we should be insisting on a government tax freeze (no new taxes and no tax cutting!), and task them with “doing more with less” as all of us in non-government jobs have been forced to do for a decade or two;
- Maybe we should task our lawmakers with cutting each year’s budget to spending no more than 95% of revenues until the payments on our debt load is less than 15% of our annual revenue;
- Let’s insist on eliminating the practice of projecting savings several years out. Savings have to occur in the current budget year;
- And let’s task them with no new spending plans without offsetting expense cuts elsewhere.
I’m not smart enough to know which tax code option is best. Throwing out the whole system may be throwing the baby out with the bath water. The Occupy people and the Tea Party people, whether you love them or hate them, know the status quo is hurting all of us. Each of us has a responsibility over the next 12 months to get involved, or Occupy, the system in a way that brings about meaningful change. Don’t sit this one out.
