As the California Legislature struggled ad nauseum this spring and summer to come up with a State budget that the Governor might sign, some advocated a tax increase or new tax be imposed on the top 1% of taxpayers to fill the gap between revenue and the cost of keeping State government running.
Likewise, we have President Obama proposing that a tax on the wealthy help fund the national health insurance reform he has been advocating.
While the average taxpayer may not be concerned about socking it to the highest earners, a story in the Business Section of the August 20 Register is reason to pause. Headlined “Rich Americans pull vanishing act”, this story by Jason Notte of Thestreet.com reports that the trend of baby boomer demographics is leading to a decline in the number of rich Americans. The hit that those in or nearing retirement have taken due to the economy driving down the value of savings investments and houses is translating into a need for Baby Boomers to work years longer than they had thought would be necessary, according to this story.
So, as politicians call for taxing the rich, it appears they are looking to a declining revenue base. If so, that will lead to “unanticipated deficits” in the not too distant future. That outcome sounds all too familiar. Perhaps those of us non-rich should begin to ask if proposals to tax the rich are just another Ponzi scheme in pursuit of instant gratification.
Why can’t we just have a fixed tax rate for everyone, and not over analyze each case by case? In other words, whether you’re making $5,000 or $5,000,0000 a year, why can’t we all just pay 20% in taxes; regardless of your family situation. No deductions whatsoever.
Note: 20% is just an example…