Class warfare against the rich

In today's Oregonian is a story covering New York Times reporter David Cay Johnston's speech on our country's tax code.

If you can get past the ridiculous hyperbole -- a "progressive" tax system is a bedrock principle of democracies, and the U.S. system is so skewed to the rich that the government may not survive -- you might see a hole in Mr. Johnston's rant. You know, the one about how the rich don't pay enough in taxes.

Let's take this paragraph from the story to illustrate:

But in the past decade, Presidents Clinton and Bush enacted huge tax cuts skewed toward the rich, he said. As a result, the United States now has a tax system that requires the richest 400 people in the country -- people who make an average of $176 million a year -- to pay only 17 cents in taxes for every dollar they take in, Johnston said. That is barely more than the 15 cents paid by the average U.S. taxpayer and is the same rate paid by families earning $100,000 to $200,000, he said.

I will operate under the assumption that Johnston's numbers are correct. Let's do the math.

If I make $176 million every year and pay 17 percent of my income to the federal government, that's $80,000 shy of thirty million dollars that goes to pay for our supposedly-collapsing federal system.

If I make $200,000 a year, I pay $34,000 a year to the feds. Who's paying more? I bet I could ask my second-grade daughter and she'd know the answer.

Let's assume that the average taxpayer earns $40,000 a year, and thus (according to Johnston) pays 15 percent of his or her income to the IRS. That's $6,000. Which is more -- $34,000 or $6,000? Again, not a difficult question.

And this doesn't even count what those people pay in state and local taxes.

Yes, I understand that in each of those examples, they are left with a decent amount of spendable cash -- $146 million, $166,000 and $34,000, respectively. Yes, I understand that the lower the income, the less take-home pay that's left, and that could be a big burden for low-income households. I sympathize. I've been there. Not that long ago. And frankly, our tax code takes that into account.

My point is this: those who claim the rich aren't paying their fair share don't think about the fact that the rich are paying a boatload of taxes that a typical schmoe like you or me will never see as income, never mind tax burden. When's the last time you wrote a $30 million check to the IRS?

It's kind of like those people who chastise society for not supporting schools. They don't think about the fact that society is already paying to support schools, and may not want to pay more. But that's another story for another time.