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Wednesday, November 23, 2011

Biting the Hand That Feeds

It occurs to me that the "occupy movement" is a classic case of biting the hand that feeds. The ability to be present for weeks on end without having to go to work implies that someone else is paying the bills. Odds are, that entity is government of some sort or another. Government, in turn, obtains its money from taxation. According to IRS data from 2004 (when the Bush tax cuts took effect), the top 1% of earners received roughly 19% of all (earned) income nationally, but paid 37% of all taxes collected. Indeed, they paid roughly 95% more than their fair share, if by "fair share" we mean that they pay proportionately to what they make. (Source here.)

Moreover, many in the top 1% are not individuals but corporations. This fact is lost on "occupiers," who seem oblivious to the fact that if they own a mutual fund or have any sort of pension plan, they are part owners in those companies and therefore benefit from those earnings. As Mitt Romney correctly noted, corporations are indeed people, though many of these people don't seem to be cognizant of that fact.

Although these numbers are everywhere on the Internet, they bear repeating, loudly and often. Let's examine who pays for our government (tax year 2004 data):

The top one percent -- 37%

The top five percent -- 57%

The top ten percent -- 68%

The top twenty-five percent -- 85%

The top fifty percent -- 97%

According to the same set of data, at the height of the "Bush economy," the bottom fifty percent paid only 3% of all tax revenue, yet received 13% of all (earned) income. That would mean, proportionately speaking, they underpaid by 433%. Since then, the situation has only become more exaggerated. Today, 47% of Americans pay no taxes whatsoever, most of whom receive some form of EITC (Earned Income Tax Credit, e.g. free money). Welfare, food stamps, and other forms of assistance are not factored into the income data either. I will not argue against the notion that there are many in the current economy in need of assistance. To be perfectly honest, as a classroom teacher with four children, I don't make enough to pay taxes myself. However, I am not camping in the street interfering with free trade because of my ingratitude.

Worse yet, those in the "occupy movement" are making it less and less likely that the purported cause of their malice will improve. Businesses will not expand production when net profits are declining. For those of you who may be "occupiers" yourselves, net profits are the profits a company makes after factoring in the costs of doing business. A company may make billions in gross profit (total revenue minus production costs), then reinvest much of that money into research and development, expanding operations, or modernizing its equipment. This is how a company supposedly making "disgustingly" large profits can claim to be unprofitable, and thus pay taxes on only what remains after investment. By raising taxes on gross profits (which is what this movement wants government to do), the profit margins of these corporations will decline. In turn, less money will be available to invest in the growth of businesses, which means that economic growth will decline even further. In short, fewer profits means fewer jobs.

It is my contention that these people do not want job growth. They want, instead, to feed like ticks off the lifeblood of those of us who still work for a living. I may be part of the forty-seven percent, but I don't intend to stay that way. That is what these individuals lack -- ambition. It is highly ironic that they are willing to spend so much time and energy demanding handouts while lacking the motivation to make something of themselves. College students dropping out to scorn the successful demonstrate that the idea that all students are college material is a fallacy. To put it bluntly, there are a lot of doped-out idiots in college. Sadly, adding a few abbreviations after their names doesn't change that.

Perhaps Wall Street should have a demonstration of its own, though an Ayn Rand-style walkout would be disastrous for the nation. If these leeches succeed in shutting down corporate America, they deserve the fate that will befall them. As for the rest of us, we'll also suffer for their idiocy. Isn't that always the case, though?

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