Friday, November 7, 2008

The Wealthy Pay Most Of The Taxes

So looking at the understanding that we work to gain the resources to buy goods and services as Highlighted in the post, below titled “Employment And The Work To Time Ratio”. Through a series of thought exercises I think I adequately established that desire to work for those things are tempered by the time we are asked to spend earning it. That leads me to one of my economic pet peeves.

Back to economics. Do you know what I am about sick to death of hearing. “The top 10% pay 80% of the taxes.” Or something along that lines. Alright, this is about logic here, right? Yep I looked up and sure enough right at the top of the page I make reference to the posts being about taking “logical approaches”. So let us apply it to this Irrational claim. In one of those stupid long posts about “wage reform” I covered this basic idea. I hope to make it clearer here.

If every capitalistic read blooded American is really working for time, then isn’t time the factor by which we make that tax assessment on. Why pick the dollar value. Like I pointed out before. There are two factors that form a ratio there. They are equally weighted. Money over time or dollars/ hour. Why do we have to pay the government in dollars. Why isn’t the 1040 filled in with hours. Probably because most of us would understand how little we deserve that guilt place on us by the “10% pay all the taxes” statement. It would aslo make us sad to see how many hours we have to put in before we start making money.

What if I told you that, Richard S Fuld Jr (CEO of Lehman Brothers who is currently receiving bailout money from the government.) paid $24,600,000 in taxes for the year of 2006. He made $123 million that year. What if I told you that Joe Smith (He is a janitor the cleans the toilets at Lehman’s main office.) paid $5,200. He made $20,800 that year. Who would you say paid more in taxes? For those of you who think Joe, you are dismissed for the day. I will see you at the bar in a few min. Those of you who say, “well obviously Richard paid more”, dope slap yourself and pay attention. Like I said before, we work for time as well as money. CEO “Rich” worked only 416 hours to pay off his tax obligation. He needs the extra time to spend all of that cash. His accountant somehow got him down into the 20% bracket. Joe “the janitor” used Turbo Tax to pay 25%. He has to work 520 hours to pay off his tax obligation. Good thing he was at work that extra time, or he might have been tempted to spend money he didn't have. Don’t think that happens? Warren Buffet recently condemned the system that allowed him to pay less taxes then his secretary.

So the next time somebody spouts on about the fact that the rich pay more in taxes, look at them, shake your head and say, “You voted for Palin didn’t you?” This is code for you are a giant idiot. You can try to explain this to them, but they won’t get it.

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