Thursday, November 06, 2008

Everyone Should Pay Their Fair Share of Taxes, But Not a Penny More

I just returned from the Fourteenth Forbes Cruise for Investors. We left New York City on Oct. 29 and toured the Caribbean. I got off in Angtigua on Nov. 4, but the cruise is still in progress. I arrived at JFK airport around 11 p.m. on the 4th and entered the baggage claim area just as CNN declared Barack Obama the winner of our presidential election. The place erupted in cheers.

Most participants on the investment cruise were resigned to an Obama victory, but they worried about what this would mean for the economy. Of course, Obama has threatened to raise taxes on the so-called rich. Depending on the day, his definition of rich seems to include anyone who makes $200,000 per year or so. I know in some parts of this country this sounds like a good sum of money, but I do not know anyone in the New York City area who makes this amount of money who considers himself rich--especially if he is supporting a family. With the top 1% of income earners already paying 40% of all the federal income taxes, it seems the "rich" already pay way too much tax.

More than one-third of Americans pay no federal income tax at all. Some are honest hard-working people who simply do not make enough money to pay taxes. But others either refuse to work or work in the underground economy. Many grocers, landscapers, painters, waiters, musicians, etc. deal only in cash. Are all these cash-based businesses declaring their income and paying their fair share of taxes? Some experts estimate that the illegal drug trade alone has a global value of $400 billion--all of it tax free. Instead of trying to squeeze more money out of the rich, Obama should first make sure that everyone pays his fair share.