Tuesday, July 12, 2011

Orrin Hatch Sure Has A Big Hatch

So I am irked. Orrin Hatch thinks that the rich pay too large a share of the federal income taxes in this country:
Sen. Orrin Hatch (R-UT) took to the floor of the Senate on Monday afternoon to defend comments he made last week about the poor needing to "share some of the responsibility" for shrinking the national debt.


"It touched a nerve because last week after I raised this issue on the Senate floor, MSNBC and the liberal blogosphere -- presumably armed with the talking points from the Senate Democrat war room -- went ballistic suggesting that I wanted to balance the budget by raising taxes on the poor," Hatch said.
"I'm not surprised, but this completely misses my point and the point, and the point is this: no matter what these Democrats tell you, the wealthy and middle class are already shouldering around 100 percent of the nation's tax burden, and 51 percent pay absolutely nothing in income taxes," Hatch said.
"Keep in mind, I don't believe we should tax the truly poor, but now that's up to 51 percent in just over two years of this administration -- people who don't pay income taxes," Hatch said. "Are they all truly poor? I don't know. All I know is that it doesn't sound right that the majority of people -- the majority of tax units -- in this country do not pay income taxes, and the minority has to carry the burden."

He's pretty careful to point out that his figures only cover federal income taxes. The total taxes in this country also include state and local taxes and sales taxes, for instance.

But that's not what made me so irked (my new favorite adjective). Consider this example: A small community has 100 tax units. Ninety-nine of them have seen their earnings fall to 200 quatloos a month per household, while the taxable income begins at 300 quatlooss. One member, however, earns now a million quatloos per month and pays all the income taxes in the community.

Is a minority supporting the whole tax load? Sure. Is this unfair? Nope.

I made my example an extreme one but similar trends apply in the United States. The inequality in income and wealth is increasing, and the proportions in which the wealthier classes pay federal income taxes is roughly in proportion to their share in total incomes earned. Of course they have loads more wealth on top of that, and wealth is taxed much more gently than income.

Another way to respond Senator Water-Carrier For the Billionaires is by pointing out that if he wants to increase the tax-paying base for federal income taxes he should work for a more equal distribution of income in the society. Get jobs for the jobless and they start paying taxes! It's a win-win.