Who Pays the Freight?

The argument was made to me the other day, on the way in to work, that we need to cut taxes on the rich because the rich pay most of the taxes.  She argued that the rich are paying the freight for all of us.  Now, without going in to the fact that this was stated with no attribution other than our favorite Beck, without crunching the numbers, I hope to dismember her argument here.  To me, her statement is just another piece of fallout from the goose in her featherbed of lies.

 

Even if the rich DO pay more (after their tax loopholes, and I don’t have the number), I doubt they pay more in terms of value received.  Let me use roads as an example.  If you don’t have a car, or use it rarely, your cost per use is either infinite (anything divided by zero is undefined) or it is astronomically high.  People who use the roads a lot are the people who have places to go (not just the fact that they tend to drive further to work, but they take more vacations and have more discretionary driving to their leisure activities.  I submit that the wealthy use the roads more.  After work, they may go out to dinner, to a play, etc.  Weekends they drive to the golf course, the ski slopes, to a weekend getaway.  On a per use basis, they are paying far less for the roads our taxes maintain than those who go to and from work and stay home otherwise.  Of course, those taking public transportation are pay a high price for non use.

Airports are supported by tax dollars.  Need I say more?

Look at law enforcement.  I don’t know the statistics for crimes committed against the wealthy vs crimes committed against the poor.  But when the poor get robbed, the amount of goods taken is by definition low.  You have to have something to steal in order to have something stolen (no kidding).  When a rich person gets robbed, what is taken is bound to have higher value because they have things of higher value.  So the police assistance has greater value.  (to say nothing about the higher level of police patrol in higher rent neighborhoods, etc)  On a per dollar value, the rich get a far better value from the police assistance than the poor even if they pay more for it.  Same with fire.  If a rich person’s home is saved from burning down, a lot more money was saved than a poor person.  The rich person comes out ahead doubly because his insurance will pay more to repair, even after adjusting for difference in premiums.  The same with a car.  The poor person is unlikely to have his car stolen because nobody would want it, and if it was stolen it is not likely to be worth what the rich person’s car is worth.

I would even stretch to say there is a difference in the value of protecting our country.  We are protecting a subpar standard of living for the poor.  If somehow this nation were overrun by bad guys, the jobs the poor do would still be there and they would still do them.  The rich are having their homes protected, their investments protected, their livelihoods protected, their companies protected (and their access to fossil fuels protected).  Those who would suffer most from a bad end to conflict are the wealthy.  Nonetheless, the burden of protecting our country falls on all of us economically and disproportionately in terms of people serving and giving their lives.  On a dollar for dollar value basis, the poor pay much more for their protection than the rich.

Not only are the wealthy not paying their fair share, the burden on them is far lower.  While many will whine about the dollar amount they have to pay, they can never equate their pain with the things the poor have to sacrifice to pay their taxes.  I can recall having to decide whether to feed my children or catch up on taxes.  How many of the wealthy have to make that choice?

For almost every service provided by our tax dollars, the rich pay a disproportionately low amount based on the value they receive.  This is why a regressive tax makes sense – the rich get more bang for their buck.  The argument of unfair taxes against the rich is just another lump in the featherbed of lies.

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