I never thought I would say this, but I am beginning to believe that the general American electorate will never have any economic common sense. The idea that taxing millionaires, who already pay more taxes that others, because they need to "pay their fair share" should automatically raise red flags for anyone thinking clearly about a plan to get our economy back on track. In fact, I would submit that the American romantic love affair with all things Europe is going to destroy this country. It seems that Americans have forgotten that this country was founded on political ideas that were categorically different than our friends across the pond.
The United States of America is a nation that has grown in her understanding of what it means for religious, political, and economic liberty to create the conditions necessary for human flourishing. No doubt this nation has imperfectly put these ideas into practice, but the commitment to do so has made this country the only place in the world where an "average Joe" can go from poverty to wealth in one or two generations. Political and economic liberty, as principles for prosperity, are now on death row, and there is little, I believe, that will stop the inevitable: America is on a pathway to bankruptcy because we believe the European illusion that raising taxes and coercing wealth redistribution creates wealth.
I do not blame President Obama for the ignorance that leads one to believe the myth that millionaires are not paying their "fair share." President Obama only represents the ignorance of many Americans who have no idea how our convoluted tax code actually works. For example, Stephen Ohlemacher recently wrote an article that sets things straight, exposing the lie that most Americans believe about who pays what in taxes:
"On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government. . . . The 10% of households with the highest incomes pay more than half of all federal taxes. They pay more than 70% of federal income taxes, according to the Congressional Budget Office."
Using government data, Ohlemacher reports the following:
"In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. . . . This year, households making more than $1 million will pay an average 29.1% of their income in federal taxes, including income taxes, payroll taxes and other taxes. . . . Households making between $50,000 and $75,000 will pay an average of 15% of their income in federal taxes. Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5% of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7%."
If the economic facts demonstrate that the wealthy already pay more taxes than everyone else why are Americans in support of raising taxes on this small population again? Class warfare could be the culprit, but I think the real reason is much worse. At least in class warfare you know you're harming the other, but what we have today is pure multi-generational economic ignorance and the absence of fiscal common sense. Americans increasingly think like Europeans.
It is important to remember that Otto von Bismarck, the Prussian prime minister/German chancellor from 1862 to 1890, is the father of the welfare state. He advanced the vision that government should serve as a social services institution by taking earned wealth from the rich and from businesses to deliver services to those who are not as advantaged. European governments fully implemented Bismarck's economic ideology and now the entire region is on the verge of bankruptcy. This will be our destiny as well unless the sound political thinking that created this nation's prosperity in the first place is released from the prison of America's Bismarckian economic ignorance.