Tuesday, July 24, 2012

Fair Share

Will someone please tell me what it means for the rich to pay their fair share of taxes? The federal government is spending $3.7 trillion each year. Spread over the population of 309 million, that is $11,974 for every man, woman, and child in the country. I'm sure as heck not paying that much in. Are you? Are you paying your "fair share"? I'm not, and I'm grateful the more wealthy are shouldering a greater part of the burden.

In a related vein, there are people insisting that we should be have a balanced approach of cutting spending alongside increases in taxation to balance the budget. The problem is with that number above. Who can argue with a straight face that we need a federal government that spends $11,974 for ever man, woman, and child and that we can't afford to cut that back substantially apart from any increases in revenue? If we cut a trillion off our spending to match our current revenue, that would still be $8,737 for every man, woman, and child. That is some expensive government. Shouldn't we be able to make do with that?


Bryant said...

What does "fair shair" mean? The problem is that the phrase (obviously) doesn't mean the same thing to different people.

Based on your post you seem to think that fair shair means paying equal amounts. That seems perfectly like a perfectly reasonable definition, as long as you are clear that this is how you are defining the term.

Another reasonable definition I think would be payment based on ability to pay, where ability to pay (with "ability to pay" defined elsewhere). This could be a progressive taxation; it could also be a flat tax. One's ability to pay could probably only be approximated in a tax system, and of course ability to pay could be endlessly debated.

A third reasonable definition would be to say that a fair share is the amount that covers the costs of consumption of public goods, properties, facilities, etc. that an individual uses, like public roads, services like fire and police, and shared resources like land and air. In some ways rich people obviously generate greater costs; in other ways, not.

Then, consider that we provide many services that are inversely related to one's ability to pay, such as unemployment benefits, social security, welfare, WIC, and so on.

What do I consider to be a fair tax? I'm not sure, but paying equal amounts is not what I consider fair.

Now, how much should we spend per person? $12,000 sounds like a lot. Still, I don't think a per person figure to be of much help. I think it's better to list what you would not like to spend money on. The government does not spend money per person, but spends money on programs and services. Less money spent means less money spent per person, and reducing spending on specific programs is an actionable goal.

For the record, a lot of spending is still under debate in my mind, but one thing my mind is made up on is that we can greatly reduce our spending on foreign military bases and some of our foreign wars, and save trillions of dollars per decade.

Bradley Ross said...

Bryant, so sorry I left your comment in the moderation queue. I thought I had a different setting on this blog.