Many say "the rich" should pay their "fair share" of taxes, but what really is a "fair share"? I think often the argument is that since the rich have more money, they can afford to pay more taxes, and that they should pay at a higher marginal rate without a lot of gimmicks that allow some to pay even less taxes than some earning less.
I think that this is the wrong approach. What one should add up the "benefits" that the rich get for their taxes.
How often do we consider that those involved in commerce benefit from a good transportation network? Every part of the network is paid for in full or part by taxes. Almost all roads are paid for by taxes, local property taxes, state and federal taxes, and probably some by income taxes. Airports are built and operated partly from landing fees and partly from taxes from all levels.
How often do we consider that those in business depend on a trained work force? Without taxes we would have far fewer schools and a far smaller trained work force. Kids could only go to school if their parents could afford it. We have examples of this imbalance all over the world and even in our own country's past.
How often do we consider that business depends on a court system to settle disputes? Some say we need "tort reform", meaning reduce the ability of individuals to sue corporations. But does anybody consider how much corporations sue each other, sometimes resulting in settlements in billions of dollars.
How often do we consider that business depends on public safety, sanitary systems, and many other aspects of tax-supported infrastructure? Would every business want its own fire department and security department. If they are going to have their own security department, are they going to have their own courts and detention centers to do something with those who harm people or things on company property?
If businesses need all these government services, shouldn't they pay the taxes for them, either directly or through the income of those profiting from the business?
Many argue that "taxing the rich" limits their ability to invest and create jobs. But how many of them are putting money into new ventures or expansion? Or are many of them just moving money around? The answer is both but I would say more of the latter than the former.
For those of you who have what you consider a good amount of savings, how much of it have you put into helping somebody start or expand a business? More than likely you have put it into mutual funds, stocks, and bonds. What happens when you invest. Directly or indirectly you buy stocks and bonds from somebody who already owns them. Does that money go into creating jobs? Probably not, except for the transaction fees pay the salaries and bonuses of those working for mutual funds or brokerages.
The only real benefit of your buying stock and bonds is providing liquidity to the market. This is necessary but it really doesn't really do that much for creating businesses and jobs. Liquidity has many advantages but let us look at only one. You put $1,000 into some investment. It may go up or down, but let's assume not by much in either direction. Now something happens to your car or house that you need about $1,000 to pay for. Assuming you have no other savings, you want to quickly get your $1,000 back. If there was no liquidity, you would have as much chance of getting your $1,000 back as you would have of quickly selling a film camera on eBay.
I could go on with many more "yes, but" considerations about taxing and investment. I do hope that this little bit of text does help you consider almost all the arguments in print and on the blogs are over-simplifications of something that needs more than just taking a position. And taking a position may be a way to invest, but it is not the way to run a country.
