POTUS Election 2008, Taxation and Wealth Redistribution

I’ve been subscribing to Fortune magazine for about 15 years now, and in the last couple of years I’ve given serious thought to letting my subscription go for something more substantive and/or right-leaning, as I’ve watched the editorial staff at Fortune take their publication further and further left.  And then, just when I begin to think it’s a total waste of precious time and money, an issue strikes at the heart of all I hold dear and I think, “At last, someone in the mainstream media gets it”.

This is a serious time for America.  The next POTUS, regardless of who it is, has to make some serious decisions, not just about taxes, Social Security and Medicare, but Iraq, foreign policy in general and, oh yes, this little recession we seem to be in.  This requres a serious person for the job, and with all candor, I just don’t see Senators Clinton or Obama as being serious about anything other than pandering to the electorate via a populist message in order to obtain and maintain power.  They do not strike me as serious enough to handle the issues we face.

Which brings me back to Fortune.  In the April 14, 2008 issue, Geoff Colvin (if you’ve never read him, clearly the brightest writer in the media today) has written a piece entitled “The Tax Debate We Should be Having”.  Here are his statistics:

  • 50% of the people who file returns pay 97% of the income taxes.
  • the top 10% of wage earners pay 70% of the taxes.
  • the top 1% pay almost 40% of the taxes.

How does this square with the Democrat candidates’ respective messages?  It doesn’t.  What we hear from the Clinton and Obama camps is that “Bush’s tax cuts [were] for the rich”.  Huh?  I guess that explains the statistics outlined above.  Mr. Colvin’s response:  the income of the top 1% of wage-earners has gone from $119,000 in 1986 to $365,000 in 2005.  I need to understand how that’s a bad thing.  It’s not.  Second, Mr. Colvin makes it clear that Bush did cut taxes for the rich, but he cut taxes for the poor even more, as reflected in the effective tax rate.  Finally, Mr. Colvin writes:  “Since the well-off pay the overwhelming majority of taxes, any tax cut with a prayer of influencing the economy would have to go mostly to them.  You could completely eliminate income taxes for the bottom half of the population, and the Treasury would hardly notice.”  The result:  “…a shrinking minority of citizens pay most of Washington’s bills.  Social cohesion falls apart.  The majority who pay nothing resent those with higher incomes; the minority who pay heavily resent those who don’t pay”.

Colvin gets it.  That’s why we need a serious President, and that’s why neither Clinton nor Obama are serious candidates.  Either they truly believe their populist message, which is downright scary, or they’re pandering for votes, which makes them dishonest.

As for my subscription to Fortune, it’s safe for the time-being, but only in order to have access to Geoff Colvin’s thoughts.

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  1. Hannover Fist | Apr 11, 2008 at 8:53 am | Reply

    I read this article and also found it interesting. The problem is, with the exception of Rush Limbaugh, there are no rich people complaining about high taxes on the rich. The very people who want to soak the rich with taxes are among the richest in the country, including Warren Buffett, George Soros, John Kerry, John Edwards, and the Clintons who made over $100 million since leaving office. Even Barack Obama has way more money than I do. Cutting the top marginal income tax rates is unlikedly to ever benefit me directly, although I do believe it will indirectly. But why should I or anyone else middle class fight for it when those who actually qualify for the highest bracket oppose it.

    Oh, and to you rich people who think your taxes are too low — Just pay more! The government will take it.

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