I'm sick and tired about hearing how the wealthy americans are not paying their "fair share" in taxes. The democrats keeping beating the drumb stating that if is the rich paid their "fair share" we could solve the debt crisis.
We all know that is a bunch of BS. It would hardy solve anything. I doubt it would bring in even 80% of the projected revenue. Anyone who knows anything about economics knows that a static modeling doesn't work in this case. Raising taxes by 10% will not bring in an extra 10% of revenue. The percentage is will bring in depends on things such as elasticity of demand and availability of substitutes. Raising taxes on gasoline, a every inelastic item, by 10 percent will bring in additional revenue close to that, however it still will not hit the 10% mark, as some people will not purchase/purchase less gasoline.
Secondly, additional tax revenue brought in by a tax increase will also depend on where the current rate is. The higher the current tax rate is, the less of an increase in revenue will be seen when the tax rate is raised.
So what is the point of all this? We need to prove to the American people that these claims of raising taxes on the rich and importance of the Buffet rule are not problem solvers. It may be time to call out the dems and agree to a few things. Once the problem is not solved, we have better case to America, saying LOOK EVERYONE, these changes did nothing. The real problem is the runaway spending and entitlement society. Americans may need to see this before they finally "see the light"
I have 2 suggestions that would certainly gain support from democrats and those who want to soak the rich.
1 - The 1 millionaire rule - Anyone who makes a million dollars or more a year will pay 25% in federal taxes, no if ands or butts. No deductions, no anything. Obviously the millionare will still be able to put food on the table. They won't be suffering, but other Americans will be as a result of such rule.
2 - Investment income tax rule - You look at someone's total income. If you make more than 50% of you income through investment income, that that part will not be taxed at 15%, it will be taxed at at the rate of your total income. The rest of you income will then be taxed at 15%. For example, lets say someone made 3 millions dollars, 2 million of it was from investment income, and the tax bracket for anyone making over a millions bucks is 30%. As i understand it, i may be wrong, this individual would pay 15% on the 2 millions dollars, and up to 30% on the additional millions. the left thinks this is un fair, blah blah blah. However with this adjustment, since this individual made about 67& of his money thorough investments, the $2 millions would be taxed at up to 30%. while the 1 million would be taxed at 15%.
Both these ideas could surely pass congress and show America that the rich are paying their fare share. Clearly as we all know, this wont solve the problem we are having. The additional revenue coming in won't be much at all, and many Americans will suffer because of the lower level of investment & less money circulation in the economy.
The point is, sometimes we need to be shown why something isn't a good idea, we cant just be told. When i was a kid, i really wanted to order the blueberry pancakes at the diner. My dad swore to me that i wouldn't like them, and they weren't real blueberries, it was just like a blueberry paste. He didn't let me get them. Next time we were at the diner, i again insisted on the pancakes. He just shook his head and said FINE, get the pancakes. I got the blueberry pancakes alright. He was exactly right, they were nasty. I could barely eat a piece of them. He sat their with a smile on his face. He still makes fun of me about those panckaes 20 years later. But guess what....I had to find out for myself that what i thought i would like turned out terrible......