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As it turns out, today's democratic socialist may need to spend more time in basic math classes and less in the social studies building.
The battle cry (for now) of the socially conscious democratic socialist is to make the 1% pay their fair share. The story is spun and perpetuated that if only the super wealthy would "pay their share" we would live in a blissful, strife-free economic utopia. Unfortunately basic math, not greed or racism, sinks that socialist ship of dreams.
Some quick research will yield that the United States wealthiest people control 34.2 trillion in wealth and assets. Conversely, the lowest 50% of American earners only account for 2.1 trillion. Admittedly, this is a significant gap. Nobody is arguing that. But the battle cry for democratic socialists is to tax the wealthy more aggressively and with fewer loopholes. This, they say, will make it "fair" for everyone. Alexandra Ocasio Cortez famously recommended that the wealthy could and perhaps should be taxed as much as 90% of their income.
Well, let's take a look and see how that would solve America's economic woes.
The U.S. has (at last count) 834 billionaires. Obviously these folks make up much of the infamous 1%. Interestingly, on average these people make an income of about $516k a year. (That's a lot of money. I don't make that much myself.) So, if you take the average income of the 1% and then multiply that by the number of billionaires in that 1% group, you get a total taxable income amount of just about 430 million dollars annually. (I bet you can already see where this is going...)
If we taxed these horrible, decadent monsters a full 95% of their income, we would see an income tax amount of 408 million dollars. NICE! Unfortunately, the estimated 2021 tax revenue for the U.S. is set at a bit under 3.87 trillion (Yes, with a T). So, great news... if we tax our 1% at 95%, we could gather a full 11% of our estimated 2021 tax revenue.
Sadly, that still leaves us with 89% to gather. Where does that come from? The rest comes from income taxes on all the folks J'Biden said he would NOT over-tax as well as from ... wait for it... Payroll Taxes! These are taxes your employer pays on your behalf to the U.S. government. Please note that J'Biden has never said he would not increase payroll taxes. Now, a small amount of the tax revenue will ALSO come from corporate taxes. "AHA!" says our democratic socialist! "Tax THEM to oblivion!" they cry in unison.
We should remember however that most large corporations pay taxes on their income and they ALSO pass taxes through to their shareholders. A C corp, while providing a number of positive financial benefits for shareholders also must weather a double tax hit. The far more prolific LLC corporations directly pass ALL their taxes through to the owning partners. This leads to greater tax burdens on those individuals as they must claim any income from the LLC on their own personal taxes. In short, corporations aren't really getting away with highway robbery as the democratic socialist would have you believe.
The revelation that simply over-taxing the wealthy on their income will not significantly dent the U.S. tax need ultimately leads to the next phase of democratic socialist devolution. At some point the cry will come forth to tax not only the income of the 1% but their wealth as well. This marks a dangerous departure from American policy. Once legislators begin eying additional taxes on individual assets, we have become full-fledged socialists. Any American at any income and wealth rate who is opposed to the idea of the government seizing some percentage of your savings or retirement accounts, or even foreclosing upon and selling your home, cars or other property should be terrified at the idea of wealth taxation.
Property tax and luxury tax already exist to generate some degree of revenue from the assets of citizens. If additional taxes were legalized and levied, what part of your home, cars, savings or retirement would you be willing to donate for the good of the people?
And therein lies the true failure of socialism, "democratic" or otherwise. The movement is driven by people who look with great jealousy at the success and holdings of other people. True socialism doesn't "normalize" wages. It doesn't merely tax the wealthy. True socialism sets an equivalent tax for EVERYONE. All citizens pay the same tax in order to support government and services that all may use. That means that the millionaire making 380k a year will be taxed 60% as well as the McDonalds employee making 38k a year. They BOTH must pay an equivalent tax. So, wealthy guy grumbles as he is compelled to pay 228k of his salary to taxes. Yet no one weeps for him as he still has $152k to live on. However, you also must not weep for McDonalds guy who equivalently has to pay almost 23k of his income to the government, retaining around $15k over the year to pay for housing and food.
THIS is the truth and inevitability that democratic socialists don't want you to understand. Truthfully, most of them don't understand it themselves. Socialism is AMAZING when it's other peoples' money, but by definition, socialism is YOUR money. Anyone who calls for socialism must be willing to pay the exact same tax rate that they wish to impose upon others. If not, they aren't socialists, they're bums.
The battle cry (for now) of the socially conscious democratic socialist is to make the 1% pay their fair share. The story is spun and perpetuated that if only the super wealthy would "pay their share" we would live in a blissful, strife-free economic utopia. Unfortunately basic math, not greed or racism, sinks that socialist ship of dreams.
Some quick research will yield that the United States wealthiest people control 34.2 trillion in wealth and assets. Conversely, the lowest 50% of American earners only account for 2.1 trillion. Admittedly, this is a significant gap. Nobody is arguing that. But the battle cry for democratic socialists is to tax the wealthy more aggressively and with fewer loopholes. This, they say, will make it "fair" for everyone. Alexandra Ocasio Cortez famously recommended that the wealthy could and perhaps should be taxed as much as 90% of their income.
Well, let's take a look and see how that would solve America's economic woes.
The U.S. has (at last count) 834 billionaires. Obviously these folks make up much of the infamous 1%. Interestingly, on average these people make an income of about $516k a year. (That's a lot of money. I don't make that much myself.) So, if you take the average income of the 1% and then multiply that by the number of billionaires in that 1% group, you get a total taxable income amount of just about 430 million dollars annually. (I bet you can already see where this is going...)
If we taxed these horrible, decadent monsters a full 95% of their income, we would see an income tax amount of 408 million dollars. NICE! Unfortunately, the estimated 2021 tax revenue for the U.S. is set at a bit under 3.87 trillion (Yes, with a T). So, great news... if we tax our 1% at 95%, we could gather a full 11% of our estimated 2021 tax revenue.
Sadly, that still leaves us with 89% to gather. Where does that come from? The rest comes from income taxes on all the folks J'Biden said he would NOT over-tax as well as from ... wait for it... Payroll Taxes! These are taxes your employer pays on your behalf to the U.S. government. Please note that J'Biden has never said he would not increase payroll taxes. Now, a small amount of the tax revenue will ALSO come from corporate taxes. "AHA!" says our democratic socialist! "Tax THEM to oblivion!" they cry in unison.
We should remember however that most large corporations pay taxes on their income and they ALSO pass taxes through to their shareholders. A C corp, while providing a number of positive financial benefits for shareholders also must weather a double tax hit. The far more prolific LLC corporations directly pass ALL their taxes through to the owning partners. This leads to greater tax burdens on those individuals as they must claim any income from the LLC on their own personal taxes. In short, corporations aren't really getting away with highway robbery as the democratic socialist would have you believe.
The revelation that simply over-taxing the wealthy on their income will not significantly dent the U.S. tax need ultimately leads to the next phase of democratic socialist devolution. At some point the cry will come forth to tax not only the income of the 1% but their wealth as well. This marks a dangerous departure from American policy. Once legislators begin eying additional taxes on individual assets, we have become full-fledged socialists. Any American at any income and wealth rate who is opposed to the idea of the government seizing some percentage of your savings or retirement accounts, or even foreclosing upon and selling your home, cars or other property should be terrified at the idea of wealth taxation.
Property tax and luxury tax already exist to generate some degree of revenue from the assets of citizens. If additional taxes were legalized and levied, what part of your home, cars, savings or retirement would you be willing to donate for the good of the people?
And therein lies the true failure of socialism, "democratic" or otherwise. The movement is driven by people who look with great jealousy at the success and holdings of other people. True socialism doesn't "normalize" wages. It doesn't merely tax the wealthy. True socialism sets an equivalent tax for EVERYONE. All citizens pay the same tax in order to support government and services that all may use. That means that the millionaire making 380k a year will be taxed 60% as well as the McDonalds employee making 38k a year. They BOTH must pay an equivalent tax. So, wealthy guy grumbles as he is compelled to pay 228k of his salary to taxes. Yet no one weeps for him as he still has $152k to live on. However, you also must not weep for McDonalds guy who equivalently has to pay almost 23k of his income to the government, retaining around $15k over the year to pay for housing and food.
THIS is the truth and inevitability that democratic socialists don't want you to understand. Truthfully, most of them don't understand it themselves. Socialism is AMAZING when it's other peoples' money, but by definition, socialism is YOUR money. Anyone who calls for socialism must be willing to pay the exact same tax rate that they wish to impose upon others. If not, they aren't socialists, they're bums.
