By Tom Quiner
The debate has been furious.
Democrats insist that taxes need to be raised on America’s most-productive Americans by letting the Bush tax cuts expire.
A flawed compromise plan was reached that extends the Bush rates for two more years.
At issue: should the top income tax rates for super-producers earning more than $250,000 per year increase from 35% to 39.6 percent? In other words, are these super-producers undertaxed?
I’m not sure that’s quite the right question. After all, there has been way too much wailing and gnashing of teeth from the political Left and Right over what amounts to a disagreement over just several percentage points to explain all this angst.
The real issue is: who owns your productivity? That’s the flash point.
Conservatives say you do, that you own one-hundred percent of your own productivity. You give back a percentage to the state as part of your civic duty to support government services as defined by federal and state constitutions.
Liberals say the state owns all of your productivity. They will tell you how much you are allowed to keep.
Liberals say they know how your money is best spent. To that aim, they pass mammoth health care bills that require you to purchase a product (health insurance) you may not want in obvious violation to the Constitution (just struck down by a federal judge).
They pack the bills with spending you find objectionable, like taxpayer-funded abortions, because they know how to spend the fruits of your own productivity better than you do.
They portray America’s most-productive workers as being selfish, undeserving, even evil. And yet an analysis of these folks comes up with a different portrait, according to researchers Thomas Stanley and William Danko in their book: “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy.”
Did our rich inherit their wealth? Not really. Eighty percent are first generation wealthy. Only 19% live off of trust funds.
In fact, the striking thing about our country’s wealthy is that they are self-made individuals. They tend to be self-employed. Three out of four of these self-made millionaires are entrepreneurs, the rest are professionals like doctors and accountants.
They worked hard. They made good choices. They sacrificed. They took risks. And it paid off, because this is America, the land of opportunity.
These are the good guys. They create jobs and wealth for the entire country.
High income taxes discourage productivity from these super producers by reducing the reward for the next dollar earned.
The fundamental question is: where do we draw the line? That’s where politics kick in. Right now, the top 1% of earners pay more income taxes than the bottom 95% combined. Our super-producers are more than paying their fair share.
The issue comes down to control. Liberals want control over your productivity. That’s why they rage over this issue. They want control over your productivity.