President Joe Biden and almost every Democrat says that it is time for Corporations and the Wealthy to pay their fair share of taxes. But no one can ever define what that “fair share of taxes” ought to be.
The Corporate Income Tax – Another Fraud Perpetrated Against the Public
With respect to corporations and other business entities, they DO NOT PAY Taxes; they merely are efficient tax collectors. In the February 22, 2014 issue of The Economist, far from a conservative or libertarian magazine, they stated: “The big question is whether it makes sense to tax corporate profits at all. A company is a legal entity; if it is taxed, it must pass it on.”
Corporations do not pay taxes, only individuals pay taxes. When a corporation is taxed, either: (1) the stockholders absorb the tax, through a reduction of dividends and/or company value; (2) employees are penalized, by cancelling raises or bonuses and not hiring new workers; and/or (3) customers pay the tax through an increase in the cost of the products or services purchased from the corporation. Over time, all taxes are ultimately passed on to the customers, whether poor, middle-class, or wealthy.
Contrary to what we hear from the media, academia, and the politicians, it is the middle-class and the poor that suffer from taxes imposed upon corporate profits.
The Economist has even taken the position that “the rich world needs to cut red tape to encourage business.” The cost of government regulation represents another tax or fee ultimately absorbed by the middle-class and the poor. The regulatory and tax environment that exists today, especially under the Biden Administration, keeps the middle-class and poor from being able to start new businesses; they are unable to compete with the entrenched large corporations who have huge armies of attorneys and accountants, which are necessary in today’s over-regulated and over-taxed environment.
Only consumers, workers, and investors pay taxes, not corporations. The corporate income tax and regulatory environment is a hidden stealth tax that negatively impacts poor and middle-class Americans.
The next time a politician, an academic, or a media-type says that corporations are not paying their fair share of taxes, call them out as either ignorant of basic economics, or Liars trying to manipulate the public to accomplish their socialist goals. Socialism and freedom are diametrically opposed to each other; there is no in-between.
If an elected politician wants to tax corporations, he wants to tax you without you knowing about it; vote these hypocrites out-of-office!
What is the Wealthy’s Fair Share of Taxes
The Socialists and most Democrats like to say that the wealthy or the rich are not paying their fair share of taxes. Yet, they never answer the question, i.e., should the rich pay 30%, 40%, 50%, 60% or more of their income to the federal, State, and local governments?
Here’s the IRS statistics of “Who Pays Income Taxes” for the 2019 and 2020 tax years based upon returns filed and the related Adjusted Gross Income (AGI) threshold:
1) The Top 1% of individuals paid 42.31% of federal income taxes in 2020 with an AGI of at least $548,336; for 2019 it was 38.77% of federal income taxes paid with an AGI of $546,434 or more.
2) The Top 5% paid 62.74% of the total income tax for 2020 with an AGI of $220,521 or more; for 2019 it was 59.44% paid, with an AGI of $221,572 or greater.
3) The Top 10% paid 73.7% of the total federal income tax in 2020, with an AGI of $152,321 or greater; and in 2019, the Top 10% paid 70.81% with an AGI of $154,589.
4) The Top 50% paid 97.7% of the federal income tax in 2020, with an AGI of $42,184; for 2019, the Top 50% paid 96.94% of taxes with an AGI of $44,269.
And, for 2020, the bottom 50% of the tax return filers only paid 2.32% of the total federal income taxes; in 2019, the bottom 50% of filers paid 3.06% of the total federal income taxes.
Finally, according to the Tax Policy Center, for 2020 “nearly 107 million households, or about 61 percent, owed no income tax or even received tax credits [i.e., payments,] from the government.”
Well, well, well… looks like the wealthy are already paying much more than “their fair share of income taxes” … wouldn’t you agree? I would also suggest that the lower and upper middle- classes pay more than their fair share too!
The real question should be: When someone, whether an individual or a government, takes by force a percentage of your hard-earned income or wages for your labor, at what point do you become a slave? The American Founders believed that a tax on a person’s labor, regardless of the percentage, was tantamount to slavery. They read baron de Montesquieu’s book, The Spirit of Laws, published in English in 1751, in which he set forth his basic principles of taxation: Direct taxes (e.g., tax on the wages of labor) were dangerous and natural to slavery; indirect taxes or taxes on the sale of merchandise were more natural to liberty.
Because of this belief that an income tax on a person’s labor was tantamount to slavery, there was no peacetime income tax for the first 137 years of our existence; and there was never an income tax while our Founders were still alive. Through the Constitution, the Founders attempted to protect Americans, as explained by Bastiat, from legalized plunder through progressive taxation. As described by Thomas Jefferson at his first inaugural address on March 4, 1801:
“A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities.”
In other words, “to close the circle of our felicities,” or rather, to pursue happiness, no American would be subject to an income tax; and would not be regulated, licensed, and taxed in their economic endeavors to support themselves, their families and to acquire property.
As Americans, we got complacent and fell asleep at the wheel, expecting our elected representatives to do the right thing and uphold the Constitution. The year 1913 was the beginning of the end of the American Republic. In that year, the Federal Reserve Act was passed, resulting in the devaluation of the U.S. dollar since that time of 96 percent; the 17th Amendment was ratified providing for the popular election of Senators, taking power away from the States; and the 16 th Amendment was ratified granting Congress the right to tax all incomes from whatever source derived, opening the doors for Congress to begin the enslavement of the American people.
Even though Congress has a right to impose taxes, it must be done constitutionally. The administration and collection of the individual income tax is a violation of our right to be left alone, or our 4 th Amendment right to be secure in our papers and effects, and our 5th Amendment right not to be a witness against ourselves. The 16th Amendment does not say it supersedes or is superior to the 4 th and 5 th Amendments. Criminals are read their Miranda rights but, there are no such warnings that by filing our income tax returns and submitting information to the IRS, we are waiving our 4 th and 5 th Amendment rights… this is a fraud perpetrated against all Americans. My LL.M. thesis, summa cum laude, has been published, The U.S. Individual Income Tax is Incompatible with a Free Society.
Even though the administration and collection of the individual income tax is unconstitutional, we are currently stuck with complying with the income tax laws as interpreted by the IRS; otherwise, we will end up forfeiting much of our property and likely be imprisoned.
In accordance with Article I, Section 9 of the Constitution, a tax on our wages and self- employment income is a “Capitation, or other direct Tax [that] shall [not] be laid, unless in Proportion to the Census.” Therefore, the tax on our labor is unconstitutional because it has not been laid “in Proportion to the Census.” However, this provision has long been ignored and misinterpreted, when necessary, by the power-elites that control government and sadly, by the Supreme Court.
Since we are currently stuck with a progressive individual income tax, what percentage should the wealthy pay to satisfy the socialists? And who are the wealthy? Since there appears to be a commitment that the 87,000 new IRS agents will not employ their Gestapo tactics against households making less than $400,000 of gross income, does Congress believe that a couple with combined gross income of $400,000 is rich or considered wealthy? Seems more like upper middle-class, especially if the couple lives in or near New York City, Chicago, LA, Washington D.C., or any other urban city.
Moreover, why would any law-abiding Taxpayers making under $400,000 —say $150,000-to- $399,000 or less — believe the IRS won’t come after them; even many independent authorities believe the IRS will have to renege on this promise to generate additional taxes, penalties, and interest to justify their existence. The IRS is much more successful auditing the middle-class than the super-wealthy, who can afford high-priced CPAs and Tax Attorneys.
Most socialists will never say exactly how much the wealthy or rich should pay, but let’s assume they’d be appeased with at least 50%. They would probably prefer to go back to the mid-1960s and 1970s when there were 24 brackets ranging from 15% to 70% on taxable income that exceeded $200,000… maybe the 1950s and early 1960s, when the top bracket was 91% on taxable income above $400,000.
As a Certified Public Accountant, the standard for materiality is 10% or more. Therefore, I would suggest that a tax greater than 10% on anyone, including the middle-class and the very wealthy, is tantamount to slavery! Enough “to make your blood boil”!
So please, go to our website, Abolish the IRS, and sign our Petition to Abolish the IRS. Forward this blog to friends, family, neighbors, and associates. Do it now!
If enough people understand the fraud perpetrated against them, we may be able to restore our Republic, by repealing the 16th Amendment and abolishing the IRS as we know it.
In the meantime, vote everyone out-of-office who wants to raise taxes of any kind, whether on corporations or so-called wealthy individuals, because it ALWAYS trickles down to “We the People” … ALWAYS!
Dum Spiro Spero—While I breathe, I hope.
Slainte mhath,
Robert (Mike) G. Beard Jr., C.P.A., C.G.M.A., J.D., LL.M.