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You a Sucker or Are You a Leech?
Paying the “fair share” of taxes…
[by Mac Johnson] 3/21/06
is just around the corner, and tax time always leads to a discussion
of who is paying their “fair share” of
taxes and who is not. Such a discussion comes in two flavors.
For most liberals, the discussion focuses
on the fact that -- no matter what share of taxes they actually pay -- the “rich” are
not paying their fair share of taxes. For most conservatives, however, the
discussion revolves around the idea that everyone not actually on welfare is
paying more than their fair share of taxes.
Johnson is a freelance writer and biologist in Cambridge,
Mass. Mr. Johnson holds a Doctorate in Molecular and
Cellular Biology from Baylor College of Medicine. He
is a frequent opinion contributor to Human
Events Online. His website can be found at macjohnson.com [go
to Johnson index]
“Fair” is a loaded and relative concept. But let’s
consider one definition of a fair share: one household putting
into the system the same amount of money as the system spends
per household. This is also known as “putting in what you
cost,” or “an even share,” and should be familiar
to anyone that has ever split the check at lunch. Although at
lunch, unlike in government, inability to pay is not considered
OK for those who have just eaten their fill of the communal meal.
Calculating the cost of government attributable to any specific
individual would be really quite hard, but calculating the average
cost attributable to an average individual is quite easy. What
the following analysis lacks in resolution, it makes up for in
simplicity and it should serve as a lesson in the form our government
The federal budget for 2005 was $2.4 trillion ($2,400,000,000,000.00).
The federal government did not collect that much in taxes, of
course, and so borrowed the remainder, but the effect of such
deficit spending is to increase the cost of borrowing for the
private sector. Government borrowing is thus a form of indirect
taxation reflected in interest rates, so we may safely count
all the budget expenditure as a tax cost.
There are around 110
million households in the United States. It is for their alleged
benefit that the $2.4 trillion was spent.
Each household may thus count as their even share of the cost
of federal government approximately $21,800 per year. (I used “households” in
this calculation, rather than people, because I am so generous
as to believe that children should not be held responsible for
a share of the cost of government.)
Those households that pay less than $21,800 in taxes are therefore
leeches, who fail to pay their share of the cost of our beneficial,
necessary, and not-in-any-way bloated federal government. Likewise,
those households that pay more than $21,800 per year in taxes
are suckers, who carry more than their even share of the costs
and are thus being parasitized by the leeches. The effect of
taxation is to divide all the citizenry into either leeches or
In this calculation, as in real life, the tax burden falls on
households. Some people entertain the fiction that corporations
pay a share of our taxes, but this cannot be true. A corporation
that fails to earn enough revenue to cover its costs goes out
of business. Any corporation still in business has thus found
a way to successfully pass the cost of corporate taxation onto
its customers. You may think the government is sticking it to
Megacorp, but Megacorp then just sticks it to you to make ends
Likewise, you might think that the rich pay more in taxes, per
dollar of income, than do the non-rich. But the rich do not accumulate
wealth by taking losses. The cost of taxation has been figured
into their businesses as well. When they pay, we all pay eventually,
through price increases and other means. If you believe that
it is possible to tax a corporation or a rich business owner
without this cost eventually flowing through our highly liquid
economy into the costs of your needs and wants, then you are
a child that believes it is possible to drain the water from
only one end of the bathtub.
That was fun to say,
but the point is that this effect makes the statistical tax
contribution of any group of wage earners
very easy to calculate. Around 19% to 22% of the cost of everything
is actually you paying somebody else’s federal taxes, and
them paying yours. In any nation in which tax law remains relatively
stable for a few years, an equilibrium is reached, so all that
actually matters is the size of the national tax burden divided
by the size of the national economy. We all set our lives up
to cover this cost and it is therefore shared to a surprisingly
even degree. Only the unemployed avoid this net.
So, if we take the
22% figure to be the total embedded costs of federal taxation,
we can figure that, for a household to contribute
$21,800 in taxes (it’s even share), it would need to earn
about $100,000 per year. This is the leech versus sucker demarcation
point (LvSDP). If your household earns less, you are a leech.
If it earns more, you are a sucker.
So how many leeches are there? Only around 14% of households
earn more than $100,000 per year. So America is pretty much a
nation of leeches: 86% leeches, having their federal tax tab
subsidized by the 14% that are suckers.
To be fair, though,
we should probably count allegedly non-taxed employee benefits
in figuring the LvSDP, since the expenditure
of these funds on an employee’s behalf contributes to the
federal budget via the embedded effective tax rate of 22% that
I just described. According to the General Accounting Office,
benefits account for one quarter of total compensation on average.
The LvSDP for an employee receiving average benefits is then
about $75,000 per year. But even if we were to assume full benefits
for all the nation’s employed, then this would still mean
we are a 75% leech nation, sponging off the misfortune and wealth
of the 25% that are suckers.
Now, most of the leeches
do not wish to be so. But one of the depressing facts of our
time is that America’s federal
government has grown so large, so expensive and so disproportionate
to the means of her average citizens, that even a family earning
$70,000 per year cannot fully cover their even share of federal
spending. And remember, it is Congress that has made you a leech;
I am merely the taxonomist that described you. Withhold your
Also, bear in mind that most of the leeches do not receive $21,800
worth of annual benefit from their federal government, despite
being made leeches by owing this amount. Thus, many leeches are,
On the other hand, Congressmen earn an annual salary of $165,000
per year, proving that some suckers can also be leeches.
But all in all, the vast majority of the American people can
add to their list of complaints about our national government
the fact that it has made them into little leeches, who -- at
best -- can hope only to one day become giant suckers. -one-
First appeared at Human Events Online
2006 Mac Johnson