There seem to be only a few wealthy renegades who think like Warren Buffet. The people in this country who have been blessed beyond the imagination of the rest of us, do not like the idea of possibly having their recent tax cuts repealed. I can’t say as I really blame them. I’m frugal and don’t like paying taxes, either. The argument is often made that these privileged few really pay most of the taxes collected. This is an argument I find hard to believe, but perhaps this is, in fact, true. The top one percent of taxpayers in the country, after all, do make 90 percent of the money.
What I find most interesting is that this one percent is convincing the rest of us, or at least they’re trying, that it is in our best interests to let them keep as much of their income as possible. The argument is made that increasing income taxes on those Americans whose taxable income is more than $250,000 would stifle job development and put an undue burden on small businesses.
The Census Bureau statistics indicate a different reality. The definition often used to describe a “small business” is broad. The term “small businesses” include far more than mom and pop grocery stores and family farms. Included in the definition of small business are companies such as Bechtel and Price Waterhouse. Also included are rich individuals who form corporations to benefit from tax laws but do no real business and have no employees. Of all individuals with small business income, only 1.9 percent have income that will put them in the top two tax brackets. Ninety-eight percent of individuals paying taxes on small business income would not be touched by these tax increases. The rest of small businesses are being asked to go to bat for tax cuts that will benefit the few.
When faced with a rising tax bill, most of us who earn our living as proprietors of small businesses do a couple of things. We may invest some of our profit in tax sheltered retirement funds. We are likely to invest in new equipment so we can deduct more depreciation from our taxable income, or we hire more employees to staff our growing and profitable business or we donate to a charitable nonprofit to increase what we can subtract from the front page of our tax form. All of these options benefit the economy as a whole.
What do the wealthiest among us do with their extra cash? Just read the most recent edition of “Forbes” magazine. “Forbes” features articles on wealth management, the state of the stock market and annually creates lists of the world’s richest people. Interspersed between the articles are glossy, full page ads for watches worth more than the annual income for four families of four living at the poverty level, luxury private jets, yachts and designer suits. The last issue also featured an article entitled “Five places for your cash instead of money markets and treasury bonds.” Were these five places companies which will then create new American jobs? No. Were they nonprofit charitable organizations funding efforts to cut the number of starving children in the world? No. The recommended five best places to put your cash, according to “Forbes” magazine, are suggestions to invest in the currencies of Switzerland, Norway, Singapore, Australia and China. The advice is to take your increasing wealth and to bet against the strength of the US dollar on the world currency markets.
Why, then, are we, the majority of Americans, being asked to shoulder massive cuts to programs like food stamps, Social Security, Medicare, and Medicaid while being told that we cannot even consider raising taxes on the nation’s wealthiest back to the levels they were only a few years ago?
We are being asked by politicians and some new media to believe that the editors of and those who subscribe to “Forbes” have our best interests at heart. We, the many, are being asked to vote for those who will protect the interests of the few who have the most money.
It is a matter of math.
Copyright © 2011 Janet Jacobson and Sustaining the Northern Plains