Able Americans Should Support America

Taxes should be continued by annual or biennial re-enactments, because a constant hold, by the nation, of the strings of the public purse is a salutary restraint from which an honest government ought not wish, nor a corrupt one to be permitted, to be free. -- Thomas Jefferson

America is getting richer, no matter what the Democrats say. In 2003, 44% of U.S. households had incomes exceeding $50,000; about 15% had incomes of more than $100,000. In 1990 the comparable figures were 40% and 10%. In 1980 they were 35% and 6%. All comparisons are adjusted for inflation.

True, the median household income is up only slightly since 1990, but the median income family has gotten smaller, thus the income per person is substantially up. Look at incomes of households of given sizes. In 2003 households with two people had a median income of $46,964, up almost 10% from 1990. For four-person households, the median income in 2003 was $64,374, up about 14% from 1990. Clearly, the middle class is getting richer.

At the low end, the Census Bureau estimated that 35.9 million Americans had incomes below the poverty line in 2003; that was about $12,000 for a two-person household and $19,000 for a four-person household. Hispanic immigrants account for most of the increase in poverty as the number of poor Hispanics is up by 3 million since 1990. Among blacks, the poverty rate declined from 32% to 24% since 1990. The rate is still much too high, but the cause is clear: Almost 70% of black children are born to poor single mothers. Still, the increase in poverty in recent decades stems mainly from (illegal) immigration.

As America gets richer, all strata of society are raised by the income tide. However, it is inevitable that the absolute income gap between the top and bottom income quartiles will increase. The root cause is intelligence. Richard Herrnstein and Charles Murray noted in their controversial book The Bell Curve that intelligence is both measurable and in large part hereditary (an unexceptionable finding for psychologists but maddening to social engineers).

As college education becomes open to all with the requisite intelligence, graduates will tend to marry graduates and produce children with similar intelligence, while others will tend to produce children without it. "America is becoming a stratified society based on education: a meritocracy." Seems like a good thing!

Success, however, depends on more than intelligence and education. Equally important ingredients are personal behavior and hard work. And those traits are accessible to all. As Murray has written, all you need to do to avoid poverty and find a valued place in American society is to graduate from high school, get and stay married, and take any job.

Then pay your fair share of income taxes.

But, according to the government "a record 44 million tax returns filed in 2005 will(correctly) demand the return of every dollar (or more) that was withheld from their paychecks during 2004."

"In other words," said Tax Foundation economist J. Scott Moody, "after taking all the available credits and deductions, they will owe no income taxes and Uncle Sam may well owe them."

The number of zero-tax filers is growing rapidly because of the Bush tax cuts, the Tax Foundation reported. In 2000, 29 million people had no federal income tax liability; that figure will reach 44 million in 2004, a 50% increase. (Tax cuts for the rich?)

"In addition to these zero-tax filers, roughly 14 million individuals and families will earn some income but not enough to be required to file a tax return," noted Moody. "When these non-filers are added to the zero-tax filers, they add up to 58 million income-earning households who will be paying no income taxes," he said.

Even 58 million is an undercount, Moody noted, because one tax return often represents several people. When all of the dependents of these income- producing households are counted, roughly 122 million Americans -- 44% of the U.S. population -- are entirely outside of the federal income tax system.

In 2002 the top 1% of earners paid 34% of the federal income taxes while earning 16% of the income. The top 5% paid 54% of the taxes while receiving 31% of the income. The bottom 50% of earners paid only a few percent of the federal taxes.

“Is it healthy for our democracy to put the costs of our federal government on a thin slice of Americans at the top of the earning scale?” Certainly that is not what our founding fathers had in mind.

[Excerpts taken from Michael Barone, Is Social Mobility on the Decline?, TechCentralStation; Scott Hodge, 58 Million Wage Earners Pay No Federal Income Tax, The Heartland Institute; Scott Johnson and John Hinderaker, Broad Ownership Needs Broad taxpaying, The American Enterprise.]