I am not going to call President Joe Biden a liar in this column. Let’s say that his advisors and speechwriters gave him wrong advice and he passed it on.
Maybe they are ignorant of the facts. More likely, they refuse to acknowledge them because the facts don’t play into their political strategy.
Political pundits have pointed out several misstatements by Biden from his first address to Congress April 29.
I am only going to cover one from Biden: “It’s time for corporate America and the wealthiest one percent of Americans to just begin to pay their fair share. Just their fair share.”
That statement is downright false. It assumes wealthy Americans don’t pay their fair share. It also pits one set of Americans against another, continuing the Left’s strategy of dividing us, making everyone jealous and angry at the wealthy.
The truth is easy to discover. According to an analysis by the nonpartisan Tax Policy Center, the top one percent — those making over $783,300 ($2.4 million on average) — were set to pay an average federal tax rate of 30.2 percent in 2019. That’s a higher rate than any other income category.
Here’s another way to look at it.
In October 2018, Bloomberg reported that the top one percent pay 37.3 percent of the total federal income tax burden while earning just 17 percent of the income in the U.S.
Is that fair?
Here are some more figures. According to the IRS, the top ten percent of all earners — people who make $150,000 a year and more — pay 71 percent of all taxes while earning only 42 percent of all income.
The top half of taxpayers pay 97 percent.
Those earners who make $45,000 or less in a year — 47 percent of all taxpayers — pay little or no income taxes.
If you compare America to other countries in the west — like Germany and Sweden — you will discover that our tax system is substantially more progressive, meaning higher earners pay a higher percentage of total taxes.
The tax rates that I have mentioned do not take into account state taxes. In high tax states — like Democrat-controlled California and New York — those in the top income bracket can expect to pay more than 50 percent of their income in taxes.
This has caused the wealthy to flee those states in the last few years to the point that both New York and California are losing seats in Congress while low-tax states like Texas and Florida will gain seats.
Of course, Democrats continue to misrepresent the truth about Donald Trump’s tax cuts claiming that they were only for the wealthy. They are wrong. According to 2018 IRS data, “total tax liability fell for all income groups except one in 2018.” Care to guess what income group paid more in income taxes for 2018? Let me help, it wasn’t you or me. It was the mega-rich, those earning over $1 million a year.
Meanwhile Biden used a major tax loophole in 2016 to save $500,000 in taxes.
Now let’s tackle the second part of Biden’s statement concerning corporate America, also based on ignorance. (I have covered this before in a column from Oct. 25, 2017.)
According to 2014 data from the OECD — the Organization for Economic Cooperation and Development — the combined federal and state statutory corporate tax rate for the United States was 39.1 percent. That was the highest tax rate in the world, until it was reduced under the Trump administration.
Guess what. Lowering corporate taxes helped lead to one of the greatest economic expansions in American history.
Here are the facts. Corporate tax rates are paid on the profit a corporation realizes after applicable expenses.
In realty no corporation pays taxes. Corporations do a combination of three things when they have to pay any tax.
Increase the cost of their product
Reduce what they pay their employees
Lower dividends to stockholders
In reality, all taxes are paid by individuals like you and me. We have to face facts. Corporations do not pay taxes. They are passed on to the consumer in one way or the other.
When Democrats say the rich don’t pay their fair share it is at best misleading.
My advice is, don’t listen to politicians who are either ignorant of the facts or lie to you about taxes.