The flight of those who pay the lion’s share of taxes is nothing new. We discussed this at length in “The Rich Don’t Pay Tax! …Or Do They?” But recently released data from the IRS reveals even more reason’s why those whose taxes support this nation are fleeing the jurisdiction of the IRS.
The latest official data from the IRS shows that the share of the tax load paid by the Top 400 Taxpayers, in relation to their share of income, increased by more than 20%, between 2008 and 2009. They paid 1.45 times their share, based on income in 2008, but that number jumped to 1.75 times their share in 2009. At the same time, that IRS Data shows that this elite group, while being called upon to pay more tax, actually earned less. The average income for the Top 400 Taxpayers dropped by more than 25% during that period.
I know that many people who read this will just say, “Well the rich can afford it, so why not make them pay more?” But the problem is not that all of them are paying more. It’s that “SOME” of the rich are paying more, while others in that group are leaving. The reason why the Top 400, as a group, are earning less, is that when higher earners leave, it makes room at the bottom for less successful people to move up into the Top 400. The result is a lowering of the totals and average for the group. But worse, it means that more of the tax load must be borne by middle and lower income taxpayers.
You see, when SOME of the rich leave, it means that taxes for the rest of the rich, the middle class and even the poor, goes up to make up for that loss. When that happens, more of the wealthy and the middle class will reach their own individual economic pain threshold and they too, will leave. Taxes for those who remain will necessarily go up, which will force more to leave, which will force taxes to go even higher for the rest of us, which will force more to leave…
Well… you get the picture. It’s a snow ball rolling down hill and it threatens to soon become an economic avalanche, if we don’t do something to reverse this dangerous trend that is really, just a side effect of “Soak the Rich” policies.
Love ’em or hate em. We need the rich. We need them to keep paying the taxes and creating the jobs. Just because some people think that it’s OK to “Soak the Rich”, doesn’t mean that the rich, even though they can afford it, will go along with that policy. In fact, more and more of them are refusing to accept punishment for working hard, succeeding, providing lots of jobs and helping boost the economy for everyone.
In fact, we know of two extremely high income earners, who formally renounced US citizenship this year – Facebook co-founder, Eduardo Saverin and songwriter, Denise Rich. But for every US expat who formally renounces, more just quietly drop off the US tax radar.
When we force those who pay the lion’s share of the taxes and create the lion’s share of the jobs to move offshore, it only means that the rest of us will have to make up the difference in taxes and job creation. Of course, when was the last time you heard of anyone getting a job from a poor person?
It’s time to stop trying to “Soak the Rich” and find a way to make them stay here, where their taxes and jobs will benefit Americans. There is one policy that would certainly turn around that flight of our most productive taxpayers and job-creators. As clearly demonstrated in “The Rich Don’t Pay Tax! …Or Do They?”, the FairTax would not only stop this frightening trend, but actually reverse it, making the USA an investment and jobs magnet. Without it, the USA will just keep hemorrhaging our most prolific taxpayers, leading ultimately to an economic collapse that no president will be able to stop, without it.
If you have not yet read, “The Rich Don’t Pay Tax! …Or Do They?”, I strongly encourage you to do so now.
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