President Obama has been speaking of "fair share" with regard to taxes, but as many other proponents of "fair share" he does no more than talk about percentage of income paid in taxes.
But this is the wrong argument.
Suppose we have a small town with most people earning a decent income and one person earning over a million dollars a year. The town is small enough that it uses the county sheriff for law enforcement, the regional fire department for fires and first responders, the regional school system, and the county library. Its only major expenses are its streets and a city park. All of its revenues are paid by property taxes. The property taxes are based on market value.
So what is a fair share for everybody?
The millionaire lives in a house whose valuation is such that he pays five percent of the city budget. The town is large enough that most people pay one percent of their income in city property taxes. However, the millionaire only pays a half percent of his income.
Now let's assume that the millionaire earns all of his income investing online in national corporations. He doesn't use any of the city services more than anyone else and maybe even less. In this case, isn't his paying a larger portion of the city taxes a fair share irrelevant?
On the other hand, let's assume that the millionaire earns most of his income being the CEO of a large company in the state. What is his fair share of tax at the state and federal level? He is now using a long list of government services, sometimes directly and sometimes indirectly. If he depends on moving goods from place to place, isn't his income dependent on a good road system? If he has many educated employees, isn't his income dependent on a good school system that will educate future employees? On and on it goes that this millionaire is dependent on a long list of government services to be successful, even some he doesn't like. For example, if he processes food the state or federal inspections may seem bothersome, but he also wins because his customers have more assurance of the safety of the food his company produces. Few have any idea what his "fair share" of state and federal taxes is.
It could be far less than some fixed percentage. It could be a far greater percentage than most people pay. Nobody knows for sure and very few are even considering the real meaning of "fair share".
