4.14.2010

A couple of useful cave drawings

Lance Burri, aka the TrogloPundit, has two posts on some staggering tax statistics that are indicative of the reason why we're facing the frightening fiscal future that Chairman Bernanke testified about earlier today.

First, only 47 percent of Americans will pay taxes this year. Lance - in responding to David Leonhardt - addresses the problem of nearly half the electorate being subsidized by the other half:
No, that’s not what it’s “shorthand” for. That’s not the “notion.”
The “notion” is: when nearly half of Americans are paying no income taxes, nearly half of Americans – close to an electoral majority – have an interest in keeping it that way. They have interest in the benefits of government that exceed their interest in paying for those benefits. And that’s troublesome. As the saying goes:
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury…
Second, the per household spending by the federal government is $31,406 but it will only take in $18,276 per household in taxes.
Forty-two percent of federal spending is deficit spending this year. Wow.
But even that’s not the important part. Here it is: does your household pay $18,276 in federal taxes? Mine doesn’t. Not even close. That means my neighbors are, after a fashion, subsidizing my existence. Others are paying more than 18 grand because I’m paying less.
Oh, am I crying for the poor downtrodden rich? No, I’m not. Should I be? How should I react? When somebody else is paying more so I can pay less: should I be grateful, or indifferent, or should I be angry that my neighbors aren’t picking up even more of the tab?
What Lance is getting at isn't that we should be paying more in taxes, but rather that spending has gotten so far out of control, that we no longer have the ability to pay for what we have now. The solution is a combination of drastically cutting spending, and having a more even distribution of taxes. I have no problem with a graduated income tax, but at the same time we cannot afford to punish success and wealth. Right now, when so many don't pay taxes and a small minority pay the vast majority of taxes, that is exactly what we are doing.

What do you think about those stats?