Wealth cannot be created by taxation

Intelligencer Journal
Lancaster New Era

Nov 19, 2009 08:59 EST

TO THE INTELL EDITORS:
Bob Herbert's column ("Safety nets for the rich,'' Oct. 21) illustrates how far detached from logic and facts class hatred is becoming. Herbert states: "We've spent the last few decades shoveling money at the rich ... ." But where did this money come from? Answer: the rich. The top 5 percent of taxpayers have provided 50 percent to 60 percent of the income tax receipts in America while the bottom 40 percent paid no income tax at all. It's not surprising, then, that when income tax rates are cut (as President George W. Bush did in 2003), less would be taken from those who paid more in the first place.

Consequently, from 2000 to 2004, the share of all individual income taxes paid by the bottom 40 percent dropped from zero percent to (-)4 percent, meaning that the average family in those quintiles received a subsidy (welfare payment) from the IRS. A Heritage Foundation Study, by contrast, found that the share paid by the top quintile of households (by income) increased from 81 percent to 85 percent.

I know of no rich person who gets money shoveled at them. I know many rich people who are shoveling money into the federal government. Without them, the subsidies to the bottom 40 percent will disappear.

Incredibly, Herbert then states - "we cannot continue transferring the nation's wealth to those at the apex ... ." But it's not the nation's wealth. Wealth is not a national resource. The nation only has wealth to the extent that it confiscates it from those who worked for it and earned it. And when the nation takes wealth from productive citizens (mostly small business owner-operators) those citizens are less able to provide jobs. Is less jobs what we want and need right now?

Waiting for it to "trickle down" is not an effective wealth-building strategy. On this, I agree with Herbert. Instead, one needs to work long, hard and smart while taking significant but measured risks while creating opportunity for others.

Every one of us is born capable of accomplishment. Buying into victim statements like Herbert's fuels envy and resentment instead of pride and self-reliance. It is also what drives some of us into the ditch.
Chris Poole

New Providence