Democrats push for wealth tax but remain quiet on what ‘fair share’ means
Fox News senior national correspondent William La Jeunesse reports on Democrats’ efforts to develop a wealth tax based on the idea of paying a ‘fair share.’
What does paying your "fair share" mean? President Biden claims to know, but won't say.
"All I'm asking is you pay your fair share," Biden said just after taking office. He reiterated in February, "Make the wealthy begin to pay their fair share."
The president has yet, however, to attach a number to this – a number that defines exactly what share of taxpayers' income the IRS demands.
Biden is not alone. Fox News asked every member of the House Ways and Means Subcommittee on Tax Policy that question – 11 Republicans and eight Democrats – to tell us what they believe is a "fair share" for all taxpaying Americans.
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"All I'm asking is you pay your fair share," President Biden said just after taking office, and reiterated in February, "Make the wealthy begin to pay their fair share." (Anna Moneymaker/Getty Images)
Zero provided a response. Remember, these are the members of Congress actually assigned to do that job and not one could say what "fair share" means.
What does the public think? Sixty percent of Americans polled by Pew Research last month said the "wealthy" do not pay their fair share. Thirteen percent think "low income" people do not pay enough. Thirty-eight percent are "bothered" by how much they pay and 56% say they "pay more than" their fair share.
What do the actual numbers say? According to the Tax Foundation, the top 1% of returns (those earning $550,000 or more) pay 26% of their income in taxes.
In total, that 1% – roughly 1.5 million taxpayers in that top bracket – pay 42% of the federal revenue from the individual income tax. That is up from 35%% in 2011.
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The top 10% (those earning $150,000 or more) pay a 20% rate. Put another way, one out of every five hours of labor they spend working for the federal government.
The bottom 50% ($42,000 income or less) have a tax rate of 2%. The bottom 40% pay zero income taxes and actually get money back.
Is that a "fair share" if some pay nothing at all? We asked random people in Los Angeles.
"I think it does make sense for everyone to pay something," said Tiffany, a middle-aged woman from North Carolina. "It's like the harder I work, the more I make and the more I'm being taxed when some people, you know, can just go on government subsidy and never have to work."
Tiffany and her son support lowering rates for 95% of all taxpayers but raise the rate from 37% to 42% for those earning $1 million or more.
In total, that 1% – roughly 1.5 million taxpayers in that top bracket – pay 42% of the federal revenue from the individual income tax. That is up from 35% in 2011. (iStock)
Nicholas McCune from Denver disagreed.
"I don't think that, you know, the more money you make, the more taxes you should pay. You know, that's something that you earned," he said. McCune favors a 20% flat tax for all earners – no exceptions. "Everybody should pay something," he said.
Averi Blackwell, a street performer in Santa Monica, endorses a progressive tax system but favors lower rates.
"Just because you make more money doesn't mean you have to pay more," he said. Blackwell favors reducing today's 37% income tax rate for those earning $550,000 and above to 26%, but those making $100 million a year or more should pay 31%. That is considerably less than proposed today by several liberal Democrats.
At a news conference Tuesday, Los Angeles Congressman Jimmy Gomez and several colleagues proposed a 90% tax rate on those earning $100 million or more and a 37% minimum tax for anyone earning more than $1 million. The federal government would also take 99.5% from any estate worth more than $3.5 million.
Many Democrats favor the Buffett tax, which would close loopholes and require anyone earning over $1 million – no matter how they earn their income – to pay a 30% minimum tax. The policy is largely fueled by outliers – the super wealthy – which the White House claims pay little or nothing at all.
According to a 2021 White House study, the wealthiest 400 billionaire families in the U.S. paid an average federal individual tax rate of just 8.2%. For comparison, the average American taxpayer in the same year paid 13%.
A similar report by ProPublica found the 25 richest Americans paid a tax rate of just 3.4% – not because they cheated, but because they used loopholes in the tax code provided by Congress to borrow against their assets to provide income. By not reporting income, they had little to tax.
Attempts by the Biden White House to tax wealthy Americans more the last two years went nowhere. (Win McNamee/Getty Images)
Attempts by the Biden White House to tax wealthy Americans more the last two years went nowhere in a Democrat-controlled Congress and any prospects for the next two years are equally doomed.
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"When the president says everyone needs to pay their fair share – what he means is he is talking about raising taxes on working-class taxpayers," says Rep. Jason Smith, R-Mo. Smith is chairman of the House Ways and Means Committee, but he too refused to provide an effective tax rate that represents a "fair share" for all taxpayers.
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