Wednesday, December 11, 2002

Cal had a lot of numbers to back up what he was trying to say, and I believe he was trying to say a couple of things. Number one: the wealthiest people in this country pay a disproportionate amount of tax and the poorest pay far too little. Number two: This is unfair because both get an equal amount of government services for which, if one was going to actually purchase such things, one would expect to pay the same price.

Now Mr. Beverly did not go so far as to say we need to increase taxes on the bottom 50 percent of the income population, but he didn't have any plan for decreasing government expenditure. If we decrease the total amount that one portion of the population pays, we either decrease the amount we're spending or go into debt financing the shortfall (something the current administration is pursuing).

Cal used many statistics, but one caught my eye and just for giggles, I decided to do a little ciphering on my own. Using 1999 IRS information, Mr. Beverly told us that $26,415 was the magical 50 percent, below which, half of our filing households subsist. People below this number pay only 4 percent of all federal income taxes collected, and that fact is keeping Cal up at night.

There's an old Indian saying about walking a mile in a man's shoes before judging him, so I thought I might try that for an imaginary median household. I gave it a mom and dad, both of whom work. They have two kids, an old beater car, and a new one with a payment. They have a $50,000 mortgage, and no outstanding credit card payments or other secured or unsecured debt. In short they're a hard working, responsible, probably churchgoing, "conservative" family with all those family values that skinny little git Ralph Reed is always talking about so probably doesn't have.

Anyway, I projected their hard-core expenses as the following: $467 per month for the mortgage, taxes, insurance, and PMI; $200 per month for the new car. Car insurance $83 per month. Their Social Security tax would be about $132 per month and Medicare $30 per month. Georgia state income taxes, with the standard deduction, about $52 per month. Their gross paychecks each month work out to be $2201.25.

Subtract the above listed base expenses and the family is left with $1237.50 per month to live on. Living expenses would include the cost of feeding and clothing themselves and their kids, paying for gas to get to work, heating, cooling, electricity, telephone, repairs on the old car and the house, savings, birthdays, holidays, and vacations, as well as any medical expenses not included in their policy if they have one.

And remember, these are the people at the top of the 50 per cent that, in Cal's opinion, aren't pulling their weight in taxes. So how much should we stick it to 'em, Cal? Let's say they only have to pay 10 percent of their AGI in federal income taxes. That would work out to $220 per month, reducing their monthly net income to $1017.50 a month or $254 a week.

If the government could collect this $2641 per year from all 63 million of the households that fall below the 50 percent line, it would collect an extra $166 billion per year. As the national budget is now over $1 trillion, that would be a little under 16 percent, which I'm afraid still might not meet Cal's definition of "fair."

Another problem: we're only looking at the top of the 50 percent bracket. Income falls fast below the median number, so that $166 billion really needs to be cut in half. In recompense, we could double the tax rate to 20 percent, leaving our hard-working, God-fearing family of four with $797 a month to live on.

So you see, Cal, if we squeeze really, really hard on this bottom 50 percent of the population, we'll still never get anywhere near the tax burden equity you so desire. We could hammer the middle 50 percent harder, but again this would merely shift the perceived tax injustice to a group that largely doesn't get to take advantage of the marginal break attained by meeting the FICA requirements, and in the end produce insufficient funds to run the government.

If we examine the real tax burden of our family before federal taxes, we see $1054 Social Security, $360 medicare, $624 state income tax, assume $800 personal property and real estate tax. If we assume they save $100 a month and spend the rest on necessities, at 5 percent, the family would spend $40 a month on sales taxes or $540 a year, bringing their tax total to $3912 for the year. That is 14.8 percent of the families' AGI before any federal tax. I guarantee there is no one in the upper (top 25 percent) who even approaches that number.

Now here is my problem with your problem, Cal: Government is not some sort of business where you're provided direct equity in all things. You can't go to the window and ask for your road building dollars back.

Men have formed and continue to form societies and governments out of necessity. Those governments can take many different forms and they don't have to be, and traditionally have not, comprised anything like our form of democratic republicanism, which has in turn generated all this wealth.

It's nice and simple to say, let every man be taxed the same amount (a head or poll tax), or at the same rate (flat tax). The reality is that many very good, hard-working people live right on the edge through no fault of their own, and in the name of "fairness," we can help push them right over that edge.

What we'll probably find is you can't get blood out of a stone, but you can sure as hell crack the stone trying.

In the end, it all boils down to how we want this society to look and function, not some simpleminded hue to an ethereal, but completely impractical philosophy of tax equity. If this is just a business, why do we get emotional at the playing of the national anthem? Why don't we have equal representation of the bottom 50 percent in the national government? Are there sufficient numbers of the wealthiest 1 percent in combat rifle platoons headed for Iraq right now?

As to the latter two questions, probably not. So they're going to do most of the dying but had no real say in the policy. Does that seem fair to you, Cal?

The only reason the wealthy have any money, or power, or importance, is because they are buoyed on the shoulders of the people they get to create and maintain their wealth. We shouldn't be seeking any great levelers.

Winston Churchill said: "The inherent vice of Capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries." When we reach the current stage where 1 percent controls 20 percent of the wealth, they can expect to pay some disproportionate taxes.

In "The American Crisis," Thomas Paine wrote: "Yet it is folly to argue against determined hardness; eloquence may strike the ear, and the language of sorrow draw forth the tear of compassion, but nothing can reach the heart that is steeled with prejudice." I often see "conservative" writers lambasting "liberals" for painting them as heartless bastards which they claim not to be.

Whether or not that characterization stands, you're not getting a whole lot more out of the bottom 50 percent. Using Cal's numbers, I can say the rich continue to get richer despite their crushing burden. Good thing the shrub wants to ease their pain just a little more!

Timothy J. Parker

Peachtree City