What Constitutes Rich in America?
With
the “fiscal cliff” looming ahead there has been much discussion about the pros
and cons of increasing taxes on the rich. The difficulty, however, in addition
to the theoretical differences in the major political parties with regard to
the potential long-term risks in taxing the rich more, is defining what
constitutes “rich”.
While
the Obama administration and Democrats contend the voting public gave them a
mandate to tax “the rich”, there is a contentious dispute as to what
constitutes rich in America. For the 98% that means anybody earning more than
the median. But that is not fair. Essentially, if 98% of the population votes
to raise taxes on the rich, they are voting to increase taxes on anybody but
them. But, is it fair or even reasonable to allow an electorate to vote to
increase taxes on others? I think not!
The
arbitrary threshold of $200K for an individual and$250K for a family also
causes consternation. While many may concede that an individual earning an annual
income of $200K may constitute extremely comfortable, it is not reasonable to
presume that a family with an income of $250K would qualify as wealthy. From my humble perception, if one earning
$200K equals wealthy, than 2 earning $400K may constitute wealthy – but
certainly not 2 earning $250K. How on earth does Congress decide that 2 or 5
can live almost as cheaply as one? While this may have been reasonable in 1933,
it is certainly far from reasonable in 2012.
Additionally,
the theory that one must be taxed at a significantly higher rate if a couple
earns more than $250K would certainly cause me to reevaluate my commitment to
marriage. Rather than pay a significantly higher tax rate, if my partner earned
$140K and I earned $120K, I would opt to cohabitate or, if already married,
divorce and live together, to avoid the punitive taxes.
Again
– I do not fall within these parameters, but if I did, this is what I would
espouse. They only fair options: (1) a
flat tax on all income with no deductions or exemptions; or (2) a federal sales
tax on everything but food. Oh too bad if somebody on welfare has to pay 25%
tax on cigarettes or beer. Guess they can’t afford it. If somebody is on the
dole, they shouldn't buy luxuries!