By Dr. Glenn Mollette
If you are making less than $40,000 a year then you probably don’t care that single people making over $523,601 pay 37% of their income in federal taxes. Married people filing jointly making over $628,301 also pay 37%. These people make it and can afford to pay it we often say. What affects someone else doesn’t bother us that much when it comes to income and taxes.
Let’s say you are making $35,000 this year but next year you have an opportunity to make $45,000. Suddenly your federal tax rate increases from 12% to 22%. This is a big jump. You have the opportunity to make more but more of what you make goes to taxes. You start calculating the hours and time worked versus how much more you have to pay in taxes and you start wondering if it’s worth what it will take to earn the extra income. If a great job comes your way to earn $209,426 then you start calculating maybe it would be better to figure out how to make $208,000 and stay in the 32% tax bracket. Most likely if you are making $209,426 dollars a year you are probably working very hard for it and turning over $70,000 plus a year to the government doesn’t feel very good.
Our government is hungry for money. The $2 trillion infrastructure project that is on the table will mean our government will desperately need lots more money for many years to come. Our grandchildren will be saddled with this debt for most of their lives.
We need infrastructure updates. Roads, bridges, new water lines, better energy sources, internet and more. The project will create a lot of jobs. However, don’t be fooled into thinking someone else will pay for the project. We hear reports that the debt will be passed onto America’s 600 billionaires. Do you really think Jeff Bezos, Elon Musk, Bernard Arnault, Bill Gates and Mark Zuckerberg are going to pay for this $2 trillion-dollar infrastructure deal?
America’s billionaires should pay their fair share like all Americans but a nation that penalizes prosperity is unfair. I don’t feel sorry for billionaires but a billionaire shouldn’t have to pay 40% of his/her earnings to the government. Also, America’s billionaires have the resources to move to another country if they choose to. Their tax rate should be fair but we shouldn’t run them out of the country.
If your income grows from $30,000 a year to $60,000, that is no reason for you to be penalized by your country. Congress needs to push for a flat tax and tax everyone including billionaires. A tax rate of 12% to 15% on all individuals and corporations would encourage people to make more and America would have more money to cover our infrastructure costs. Plus, more manufacturing would come back to America. Instead, our nation discourages prosperity by penalizing those who make more.
Every American will pay for the infrastructure project. We will be paying for a long time. Every American’s tax burden will increase. Don’t let Washington fool you into thinking somebody else will pay for this project. It’s going to be all of us and for a very long time.
Hear Glenn Mollette every weekday morning EST at 8:56 on XM radio 131.