EDITORIAL: It’s only fair

Spendthrift Democrats don’t need an election year as an excuse to continue ranting that the rich don’t pay their “fair share” in taxes. But this being an election year, expect the rhetoric to be especially shrill as they agitate for the federal government to dig ever deeper into the pockets of wealthier Americans.

Problem is, these types of policies often come at an economic cost. Think Vice President Joe Biden’s favorite four-letter word: jobs.

A recently released publication from the Congressional Budget Office, “The Distribution of Household Income and Federal Taxes, 2013,” reveals that the top 1 percent of households paid an average of 34 percent of their income in federal taxes, up more than 5 percentage points from the average between 2008 and 2012. The middle 20 percent, meanwhile, paid only 12.8 percent of their income in federal taxes.

But that barely scratches the surface of the study. Mark Perry of the American Enterprise Institute did an even deeper dive into the CBO publication. AEI’s report broke down the amount of federal taxes paid by the average household in each income quintile, minus the average amount of government transfers — payments/benefits from federal, state and local governments (Social Security, Medicare, Medicaid, unemployment insurance, etc.) — received by those households in 2013.

AEI’s report pointed out that “for each of the three lower-income quintiles, the average government transfer payments exceeded their federal taxes paid by $8,800, $12,200 and $7,800 respectively, and therefore the entire bottom 60 percent of U.S. households are ‘net recipient households’ of government transfer payments.” The second-highest household income quintile was classified as a “net payer household,” though it paid only $2,600 more in federal taxes than it received in transfers ($17,600 in tax/$15,000 in transfers).

But the real eye-popper comes from the top quintile. AEI noted that the average household in the top 20 percent paid $69,700 in federal taxes in 2013 and received $12,000 in transfers, making it a “net payer household” of $57,700 on average. Wrote Mr. Perry: “Hey, they (the top 20 percent) are already shouldering 96 percent of the entire federal tax burden, along with financing almost the entire system of entitlements and transfer payments! And that’s not ‘fair’ enough already?”

Apparently not. But it should be.

In fact, if policymakers seek to improve on the meager 2 percent (or less) economic growth of the past several years, it’s going to require Washington to seriously reel in spending, along with a massive rewrite of its byzantine tax code. That would encourage putting more Americans to work in better jobs, rather than feeding more money into the federal maw of big government.

That’s fair.