The 1% and $1 trillion

I’m proud to call myself a member of the 1%… who voted for Gary Johnson in 2012.

That’s not what most people are referring to when they mention “the 1%,” though. I recently talked with a friend who supports Occupy Wall Street and has a 99% sticker on his car — we agreed that there is a problem, but we came to very different solutions.

Wealth distribution in the US is a problem, but it’s neither exclusive to us nor solvable through the proposed measures from the economic statists.

The top 1% of US income earners have about 43% of the wealth. They paid 36.73% of the tax burden in 2009: close, but not quite even.

The poorest 5% of Americans are still in the TOP third in the world in wealth. We may not all be the 1%, but globally, we’re pretty damn close. Can we take a minute to be thankful for how much we have?

The top 10% of income earners pay 71% of taxes, but only earned 43% of income. Knowing this, it seems that the bottom 50% of earners (who pay less than 2% of taxes) are willing to sacrifice the top 2% to 10% (professionals like their doctor, lawyer, dentist, surgeon, local business owners, and entrepreneurs) in an attempt to “stick it to the rich.”

Their plan will fail because the very wealthy can evade any new taxes attempted to hurt them under the current 74,000-page (and growing) tax code, but the upper middle class already paying a high proportion of taxes — those 2% to 10% people — will not. This is the core problem of what ails our economy.

By contrast, with a flat tax that includes a standard income deduction to protect the lower income earners, like Senator Rand Paul proposed (or the one I proposed in “A More Perfect Nation”), the bottom 50% of earners pay 0% of taxes and the “fair share” argument is eliminated.

While not ideal, because I agree with many libertarians that income taxation is theft, the flat tax is a step in the right direction as we eliminate the tax code that burdens the US to a tune of about $1 trillion and 6.6 billion hours, while assuaging the fears of people who think we’ll have collapse without income tax.

Those numbers include tax compliance of businesses. A flat tax on businesses would eliminate loopholes, deductions, lobbying and favors for corporations. Isn’t that one of the tenants of the OWS movement? With a flat tax on corporations, we eliminate situations like GE and Apple paying less than 2% taxes while individuals pay a far higher percentage. This is a solution which should appeal to fiscal conservatives and anti-corporatists of all stripes alike.

What could the US accomplish with an extra 6.6 billion hours? What could we do with an additional $1 trillion in the economy instead of tax compliance? Imagine the possibilities.

Content published on the Young Americans for Liberty blog is only representative of the opinions and research of the individual authors. It does not necessarily reflect the views, goals, or membership of YAL. 

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