Monday, November 20, 2006

Tax Codes are Moral Documents

The Christian Coalition of America has made over the past several years their number one legislative priority making the Bush tax cuts on the rich permanent. Let me restate, in a world where thirty eight thousand children die each day of hunger, this "christian" organization has made it's top priority to give additional tax breaks to the rich (http://www.cc.org/noapp/issuedetail.cfm?id=257).

If I hear the old saw that the top 5 percent of the population pay over 50 percent of the taxes while the lower 50 percent pay a small percentage I am going to scream. Allow me to illustrate the fallacy of this argument starting with a scenario, followed by cold economic reality; both simplified for understanding.

First let's explore a scenario that perhaps these fine, upstanding "Christlike" folks would find more equitable.
Let us say you are a factory worker in a certain town, let's call
it Fundieville. In that town there is one restaurant, let's call it "Randy's Place". After saving up for some time you decide to take your wife and two children to Randy's for a burger and a coke. Now, Randy's serves all kinds of food, and when you arrive you find, Mr. Johnson, the owner of the factory eating some Surf and Turf with a fine Pinot. He is getting a complimentary pedicure, has already made 3 trips to the complimentary salad bar, and is enjoying the assorted cheeses and breads that come with the meal as he peruses the desert menu. "Good for him," you think "he can afford it." You sit down and order your hamburgers and coke. The waitress informs you that a side salad is available for just $2.95 or you can visit the salad bar for $4.95 each. You decline, too expensive.
After the meal, the bill comes; it's for $135.82. "Wait a minute," you exclaim, "we had 4 hamburgers and 4 cokes; the hamburgers are $4.95 and the cokes are a buck a piece, that's $23.80." "Yes," the waitress agrees "and Mr. Johnson's dinner was $145.95, together that makes $169.75, and 80% of that is $135.82; it's all in order!"
"But wait a minute," you continue, "what does that have to do with us?"
"Sir, are you going to be a problem," the waitress enquires, "plainly, Mr. Johnson was only 20% of the population, is it really fair that he pay 80% of the total bill?"

Now for the cold economic reality (simplified and illustrated to be more easily understood). Let us start with a country, we don't even have to name it Fundievania or anything, because this is pretty reasonable. The country has 100 citizens. Now 50 of the citizens make $10,000, 45 citizens make $100,000 and the remaining 5 citizens makes $1,000,000. In this "enlightened" country there is a flat tax of 10%. So the 50 citizens that make $10,000 pay $1,000 each in taxes for a total of $50,000; the 45 citizens that make $100,000 pay $10,000 each for a total of $450,000 and the remaining 5 citizens that make $1,000,000 pay $100,000 each for a total of $500,000. The total taxes paid is $1,000,000, of that the 5 citizens at the top paid $500,000; that's 50%, shocking!!! According to the US census bureau, the poverty level for individuals is $9183, and the top one percent of the population have incomes starting at $300,000. The average income for the top 0.1% of the population was three million dollars in 2002 (see http://www.nytimes.com/2005/06/05/national/class/HYPER-FINAL.html?ei=5090&en=f1af44c9cec8c79e&ex=1275624000&adxnnl=1).
The problem with statistics is that they miss the point. There isn't some secret tax that is placed on those making ten million dollars a year, as you earn more your percentage of the total tax paid increases; it increases even under a flat tax, but so do the benefits.

Have whatever economic beliefs you choose, but don't pin it on Jesus that you are a greedy bastard, that is unwilling to pay your fair share for a free society. If you are going to be the "Christian Coalition" then preach the gospel.
(adapted from a letter sent to the editor of the Free Times)

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