Vail Daily letter: Taxing rich is bad news for us
Vail, CO, Colorado
Tax increases on the rich are bad news for America and the Vail Valley.
President Obama recently proposed $1.5 trillion in tax increases on the wealthiest Americans to reduce the size of the federal deficit. These tax increases will come from what he calls having the rich “pay their fair share.” A simple analysis of the numbers illustrates that the notion that the rich are not already paying their fair share in taxes is absolutely ludicrous.
Currently, the top 10 percent of earners in America pay 70 percent of all federal income taxes. Also, according to IRS publication 1304 for 2009, table 1.1, households with income between $40,000 and $50,000 have an average federal income tax rate of 10.6 percent, households with income between $200,000 and $500,000 have an average tax rate of 24.6 percent, and households with income between $1,000,000 and $1,500,000 have an average tax rate of 29.4 percent. Clearly the rich are already paying their fair share. Furthermore, raising taxes on the rich, which includes many small businesses, during a recession would hamper job creation at a time when too many Americans are out of work.
President Obama also points to the so-called Buffett Rule, named after billionaire investor Warren Buffett, which is aimed at preventing millionaires from paying lower tax rates than middle-class Americans. For instance, Buffett says he paid 17.4 percent in federal taxes. This is a result of investors having a 15 percent tax rate on long-term capital gains. What the president fails to realize or mention is the inherent risk that comes with investing.
Our local economy depends on the wealthiest Americans to vacation here and spend money. If their taxes are increased during a time of economic uncertainty, it will have an effect on the Vail Valley economy.
Participate in The Longevity Project
The Longevity Project is an annual campaign to help educate readers about what it takes to live a long, fulfilling life in our valley. This year Kevin shares his story of hope and celebration of life with his presentation Cracked, Not Broken as we explore the critical and relevant topic of mental health.
People may not cancel their trips all together, but a family who typically spends seven nights here during the winter might decide that because of their higher tax burden they will only stay four nights. This loss of three nights affects a lot of people.This would quickly add up to significant revenue loss for the Vail Valley.
Tax increases are not the answer to our deficit troubles. Overspending got us into this mess, and spending cuts are the only logical way to get us out.