The Rich Already Pay Enough in Taxes

by

Thursday, January 31, 2019


Visit Bernie Sander’s website, and you’ll see a collection of progressive agenda items such as universal, government funded healthcare and tuition free public colleges and universities.

Senator Sanders assures us that these expensive projects, which some have estimated will cost $36.2 trillion dollars over 10 years, will be funded mainly by making the rich pay their “ fair share” through policies like raising the top marginal tax rates. Supporters of Senator Sanders’ policy agenda point to Scandinavian countries such as Sweden, Norway, and Denmark which have such programs and enjoy some of highest rates of happiness in the world. If you subscribe to Senator Sanders’ worldview, you might be led to believe that the rich are getting away with paying very little taxes and, if we made them pay their “fair share,” we could afford these programs.

Since Sander’s 2016 election bid, many others on the left have joined in in his call for higher taxes on the rich such as New York Representative Alexandria Ocasio Cortez who has called for a 70% top marginal tax rate. While this rhetoric may be appealing, it is important to take a step back and look at the facts.

Despite Bernie Sander’s rhetoric, you might be surprised that the United States has one of the most progressive tax rates in the world. “Progressive” means that more you earn, the higher your average tax rate. In fact, according to numbers from 2008, the top ten percent of wage earners earned 33.5% of the country’s total income, yet paid a disproportionate 45.1% of the country’s taxes.

In Senator Sanders’ beloved Sweden, the top ten percent of wage earners earned a little lower at 26.6% of the country’s total income, yet paid a drastically smaller 26.7% of the country’s taxes. The high progressivity of the US’s taxes is because America’s middle class enjoy an unusually low tax burden compared to other countries. About 45 percent of citizens do not pay any income tax each year, according to one estimate.  

So how do Scandinavian countries afford such high levels of social spending? The answer is two fold: one, higher regressive VAT taxes (similar to a sales tax), and two, higher income taxes on the middle class. While America has no national sales tax, individual states have sales taxes that range from 0% to around 10%. In countries such as Sweden and Norway, however, the general VAT tax rate is a whopping 25%. In addition, according to The Economist, while “a single mother with two children earning two-thirds of the average income pays overall taxes of just 13% in America,” Sweden would charge them with an approximate rate of 34%.

So next time, you hear politicians like Bernie Sanders and Alexandria Ocasio Cortez say the rich don’t pay their fair share, point to the facts. The rich pay a disproportionate amount of the country’s taxes and the middle class enjoy an unusually small tax burden compared to other rich countries. For the US to become like Norway or Sweden, we would have to massively raise taxes on the middle class and institute large, regressive VAT taxes. That means the government would be taking more of your money and you would have less freedom on how to spend it.

Joshua attends New York University with majors in Politics and History and a minor in Economics. When he is not having political arguments with friends, he likes to read and watch movies.

The views expressed in this article are the opinion of the author and do not necessarily reflect those of Lone Conservative staff.


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About Joshua Kim

New York University

Joshua attends New York University with majors in Politics and History and a minor in Economics. When he is not having political arguments with friends, he likes to read and watch movies.

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