I ran across a couple comments today from relatives on social media that caught my eye. They caught my eye because they appeared to be caught up in rhetoric that feeds emotions … which is fine if: (1) the rhetoric is accurate, and (2) it leads to a positive response. I’m not sure that the exchange met those criteria, so naturally I looked into it. Here’s that story for today:
The exchange was based off a Candace Owens tweet, referring to welfare waitlists for Americans and the contrary outpouring of resources to illegal immigrants that was referred to as “absurd”. Sounds reasonable, right? The ensuing exchange among my relatives implied this was backwards and in fact, we needed to stop carrying the uber rich folks. It struck me that something was missing in the conversation.
Let’s deal with the illegal immigrant conversation first. There are tons, and I mean tons, of available reports, dating back at least 10 years (so far that I’ve found) that talk about the cost to the US tax payer for support of the illegal (a.k.a. undocumented) immigrants. But let’s just look at numbers that are increasing every single year; and in the last 10 months they have exploded:
Starting in 2014, in just California, the cost to support illegal immigrants was $25.3 billion dollars. That equated to $2,370 of the taxes paid annually per US Citizen household in that state. Just California. And by the way – that report number was NET after taxes from those immigrants’ income was already deducted.
In 2017, nationwide, support of illegal immigrants was growing past $116 billion dollars; that was supporting 12.5m illegal adults and 4.5m children with them (and some were unaccompanied).
In a 2021 report, just in Texas for 2020, the cost was over $850 million dollars of taxpayer money after net tax contribution by those immigrants’ paychecks was removed. There is actually a report for all 50 states out there as well; it impacts every single state. But the take-away is that yes, the problem is real and not fluff or rhetoric. All these reports considered healthcare, K-12 education, early childcare, housing, and nutrition assistance (among other factors).
But enough of that; what about the “carrying the billionaires” piece? That made me think “what is fair-share supposed to look like”? First, I don’t think “carrying billionaires” is even close to accurate. But the marketing machine that builds these taglines have followings, and while I don’t consider all followings as having Jonestown moments, many do drink enough Kool-Aid to eventually fall off a rhetorical cliff. By the way – we all buy into some rhetoric at some point, and we all want to believe it.
So, first, let’s talk about federal revenues. Did you know that 98% of the almost 3.8 trillion-dollar federal budget funded by personal income taxes is funded by income earners who make over $50,700/year? But wait, it gets better: 68% of federal revenues funded by personal income taxes comes from those making over $163,600/year. But wait again … there’s still more: Those making over $818,000/year fund over 25% of the inbound income taxes per year.
There are roughly 700 billionaires in the US today. There are really 2 areas to lump them into, for analysis: (1) Job creators, and (2) Asset holders. The Job creators, like Elon Musk, re-invest massive amounts of money into building industry and creating tens of thousands of jobs. Those investments are done at risk, and losses can be equally as huge. For example, Musk poured hundreds of millions into SpaceX, despite failure after failure to successfully remotely land a booster to support re-usability. He walked up to the cliff of “last chance, then I stop pouring in funding,” and it ultimately worked out. But he was able to write off the losses. That fuels industry in the US, and it’s what makes us the powerhouse in the world that we are. If those losses were unable to be subtracted from his net income then yes, his tax burden would have been higher. And SpaceX might have closed. That’s 9,500 jobs, incidentally, not to mention the hundreds of millions the US paid to Russia to hitch rides to the ISS on Soyuz. So, I ask again, with 8% of the Federal income taxes coming from this group, what is fair share?
Looking at the other group of billionaires, the Asset Holders, these are the folks that own a bunch of stuff. Land. Stocks. Stuff. They live mostly off interest and gains – that they do also pay taxes on. But the rhetoric is that they are getting richer and richer. Well, yes. Many are. The marketing machine spewing this stuff out isn’t saying that, though. They’re just saying they should pay their fair share. Well, if you look at the numbers and ignore the Kool-Aid being poured, you’ll see that they are paying quite a bit, but not always at the same percentage (net) the rest of us are. Why? Take this way-over-simplified example: You invest in a stock. It loses money. You invest in another stock. It makes money. You’re taxed on the net. If it’s a negative net, you not only pay nothing that year, you can claim the losses backward or forwards in previous or subsequent years. Here’s another one (closer to home here in the fossil-fuel west): You own a bunch of open land. Part of its value is in the mineral rights, but Biden is at war with those rights and you can’t get any drilling or extraction approved. Value plummets. That’s an eligible loss on tax burden.
The examples go on and on. Now, in a desperate attempt to get some of that money, they’re even talking about going after gains in capital assets even if you haven’t sold them yet! This should scare the bejeebers (sp) out of everybody. Imagine owning your home and being taxed on the gain in value as INCOME tax (beyond regular property taxes) BEFORE YOU EVEN SELL IT. That’s on the list in Biden’s discussions right now. Yes. Right now.
So again, think about what is “fair share”?
