September 24, 2011

WASHINGTON POST: Five Myths About Millionaires. Including this one: “In a speech on Monday, Obama said raising taxes on millionaires isn’t class warfare, but ‘math.’ His math may be off: According to the IRS, those with adjusted gross incomes of more than $1 million paid an average of 23.3 percent in federal income taxes in 2008; those earning between $100,000 and $200,000 paid 12.7 percent; and those earning between $50,000 and $100,000 paid 8.9 percent. Half of American families don’t make enough money to pay income taxes at all.” And that’s the real problem. Everyone should have skin in the game.

UPDATE: A couple of readers suggest that payroll taxes provide the necessary skin. Well, yes and no. On the one hand, payroll taxes for Social Security, etc., are allegedly more like insurance premiums — and they’re not paid by those who aren’t working, or who are working under the table.

On the other hand, the fact that we’re currently enjoying a payroll-tax reduction that will be politically hard to eliminate suggests that where more people have a stake, there’s more pressure for lower taxes. Want to bet that if everyone paid income taxes, and if, as I’ve suggested before, the amount always went up when federal spending went up, we’d see a lot more resistance to increased federal spending?

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