Commentary
Surely, you’ve heard President Biden repeatedly talk about the wealthy needing to pay “their fair share,” while ridiculously stating that “no billionaire should pay a lower tax rate than a school teacher or firefighter.”
It’s all about scoring political points, because soaking the rich always goes over big with lower income individuals. We saw legislators at the recent State of the Union address loudly applauding it for the folks back home watching. Ironically, many of them have considerable wealth.
Biden used his “fair share” message to push Democrats to include $80 billion … yes, billion … to boost the IRS in the so-called Inflation Reduction Act, with half of it dedicated for tax enforcement with the hiring of more agents to conduct more audits.
But in Fiscal Year 2022, the IRS spent just one fourth of its time auditing millionaires, auditing only about one out of every 100 millionaires, while low-income wage-earners – those taking the earned income tax credit – were audited at a rate five and a half times everyone else. They are considered to be easy marks.
Fair Share
The newest data available from 2020 tax forms filed in 2021, show that the top one percent – those billionaires – paid a 42 percent share of personal income taxes. The top 10 percent paid 74 percent. Not fair enough?
Another Look at Fair Share
The bottom 50 percent of individuals – those with incomes below $42,184 – owed 2.3 percent of all income taxes, however, many of these filers have no income tax liability because their earnings were below the taxable threshold, or due to eligibility for tax credits, they have reduced income tax liability.
The average income tax rate in 2020 was 13.6 percent, and the top one percent paid a 25.99 percent average rate. That’s more than eight times higher than the 3.1 percent average paid by the bottom half of taxpayers.
Ponder this … I view “fair share” as everyone having skin in the game, but there were over 61 million tax returns in 2020 with no income tax liability. Among them, 94 percent were filed by those with incomes less than $50,000.
May God continue to bless the United States of America.
