Cutting taxes doesn’t mean anything to people who don’t pay taxes. From Walter E. Williams at lewrockwell.com:
In describing the GOP tax cuts, House Minority Leader Nancy Pelosi said that they and bonuses American workers were getting were “crumbs.” They were “tax cuts for the rich.” Some argued that the tax cuts would reduce revenues. Pelosi predicted, “This thing will explode the deficit.” How about some tax facts?
The argument that tax cuts reduce federal revenues can be disposed of quite easily. According to the Congressional Budget Office, revenues from federal income taxes were $76 billion higher in the first half of this year than they were in the first half of 2017. The Treasury Department says it expects that federal revenues will continue to exceed last year’s for the rest of 2018. Despite record federal revenues, 2018 will see a massive deficit, perhaps topping $1 trillion. Our massive deficit is a result not of tax cuts but of profligate congressional spending that outruns rising tax revenues. Grossly false statements about tax cuts’ reducing revenue should be put to rest in the wake of federal revenue increases seen with tax cuts during the Kennedy, Reagan and Trump administrations.
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Diatribes against the tax avoiding wealthy and demands that they pay their “fair share” are for the most part divorced from reality. There are ways to avoid taxes, but most high earners pay a lot more in taxes, both in absolute amounts and as a percentage of their income, than most low earners. From Tyler Durden at zerohedge.com:
Every presidential election brings with it a renewed debate on taxes: should tax rates be increased or decreased (which in turn forces economists to break out their textbooks to brush up on their Laffer curve definitions)? Traditionally, the question eventually boils down to one thing: what should the tax treatment of the “rich” be: should the wealthy pay more or less in taxes?
Why the particular focus on the rich? The answer is simple: while those American who declare $500,000 and above in income represent less than 1% of total tax returns, they account for a quarter of taxable income and – more importantly – are responsible for 37% of government revenues collected through individual income taxes.
And with approximately $1.55 trillion in individual income tax expected to be collected in 2016, this means that less than 1% of US taxpayers will be responsible for more than a third, or roughly $575 billion in government revenue, nearly double what corporate income taxes ($300 billion) are expected to bring in.
To any readers surprised by this, here are further details from the St Louis Fed’s Fernando Martin and his recent note “A Closer Look at Federal Taxes”
To continue reading: Who Pays What Taxes In The US