Paying Your Fair Share

Imagine you and three friends want to take vacation together. You discuss different places you could go, you suggest a camping trip up in the mountains, another person suggest a four day trip to Carribean at a beach resort. Needless to say the camping trip is a far cheaper option, you already have most the gear and will only need to buy a couple hundred dollars worth of food, supplies and gas; split four ways it will be less than $100 per person. You expect the beach vacation to cost $1,500 each for the flight, hotel and money to spend while you are there.

You discuss it further and realize that two of your friends can’t afford the expensive trip, you make generous and discrete offer to pay for their flights and hotel. Also while you are there you make sure you pay the bar and restaurant tabs for the group.

You spend $4,500 paying for yourself and two other people, the fourth, the one who suggested the expensive trip pay their own way.

After the trip the the fourth friend finds out that you paid for the other and gets upset. He feels that you should have offered to pay for his as well. Despite the fact that you paid for 75% of the total expense yourself, he says you are are cheap and greedy. For months afterward everytime you see him he brings up the trip and claims that you owe him money because you didn’t offer to pay for his as well.

You made a generous offer to pay for the majority of the expenses yourself and only expected the one person who could easily afford the trip to pay their own way. In return Everyone ends up mad at you and thinks you are cheap because you only paid for 75%, not 100% of everyone cost.

This is what paying taxes feel like for the “greedy” 1%. The majority of all the tax revenue comes from a small portion of wealthy people who, in most countries, pay higher tax rates.

Someone making $1,000,000 annually will pay about $500,000 in taxes between their income, property, capital gains, sales taxes, etc.

Someone with a $50,000 will pay about $5,000 after deductions and credits.

The millionaire could pay 100x the tax obligation of an average person and still get labeled as greedy or cheap.

The millionaire doesn’t get nicer streets to drive on, better water to drink, better police or firemen.

We all use approximately the same public resources, yet pay vastly different amounts.

If anything, the millionaire are likely to use less public resources. They send their kids to public school, they never get arrested or incarcerated, they have private healthcare and will never use welfare.

I’ve been at both ends of the income spectrum, I have a lot of respect for people that work hard to struggle to make a living. I also have a lot of respect though for people that build businesses, create value and pay enormous tax bills.

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