The Huxtable Tax
As a well-researched economist Paul Krugman used to play by the numbers, now he’s distorting the facts to rob the Huxtables. In a recently released excerpt from his contribution to the Occupy Handbook, Paul “blame Bush” Krugman discusses political polarization as a negative extension of power borne by the so-called one-percenters. Never mind the free-speech protections and profligation of online media that have allowed a larger number of Americans to participate politically, Krugman blames the one-percent.
Krugman blames the one percent for everything from political polarization to the economic crisis. His solution is to find more “things to tax”—specifically higher income earners since they can pay more. This argument follows the “pay your fair-share” philosophy behind Occupy Wall Street (which has degenerated into an anarchist movement). So on tax-day 2012 we’d like to look at the nature of “fair-share” taxation and shed some light on the highly progressive structure of the federal tax code.
The tax code is a progressive, highly redistributive tool for government to affect the behavior of a large group of households. About 70% of taxes are paid by homes with an income at or above $100,000—equivalent to the household income of a teacher and firefighter living together and earning an average of $57,000 and $43,000 respectively.
What about the 1% which many on the left want to tax more? A lawyer and an obstetrician living together earn an average of $349,000 putting them in the one-percent where they pay about 40% of income tax. These aren’t super wealthy bankers or some millionaire tax-cheat, these are the Huxtables. Raising taxes on the 1% in the name of “fairness” is like robbing Cliff and Claire to pay Cockroach.
Like Michael Moore, Paul Krugman is in the one-percent, although Moore he denies it revealing that he either doesn’t understand the meaning of percentages, income or both. If they want to pay more they can make a voluntary payment to the Treasury today by sending in a check or using their credit cards on the Treasury’s website. We find it ironic that you can take out a line of credit to pay off the government’s rapidly expanding line of credit.
In his Occupy Handbook excerpt, Krugman claims that Republican politicians must have failed Econ 101 otherwise they wouldn’t propose tax decreases. Never mind that every economist agrees on principle that taxes distort behavior, drive away investment and decrease wealth for society as a whole—if you don’t believe us take a look at any economics textbook including the one written by Professor Krugman. Correction: Dr. Krugman, he’s earned his PhD after all and even Obama can’t tax that away from him.