If it means reinvigorating the country, Canadians are all for investing in their country. Thus the landslide election Monday for Justin Trudeau.
Trudeau ran on a platform of raising taxes on the wealthy and investing in massive government programs to get our neighbor to the north on a track of more jobs and better income distribution.
The people were all for it — those liberals.
Down here, insisting the wealthy pay more in taxes is a tough sell.
In Kansas, the thinking is that if you give the wealthy a break, they’ll spend more in your state. Of course, that hasn’t proven true. Last year, despite massive income tax cuts, the state was short $400 million, and four months into fiscal year 2016 we’re trending to be $238 million shy of what was projected.
When politicians and economists discuss raising the tax on the wealthy, they are not talking about you and me.
These people are a very select group of Americans whose average incomes are $2.1 million and currently pay a rate of about 33 percent in federal taxes. And even more “special” is the top 0.1 percent whose average annual income is $9.5 million, and is taxed at an average rate of almost 35 percent. Most in this segment have net assets of more than $20 million. This 0.1 percent of the population also owns more than 20 percent of the personal wealth of Americans.
After taxes, the household making $2.1 million is left with $1.4 million. For those making $9.5 million, their take home pay is about $6.1 million.
Somehow, they make do.
If the tax rates on these super rich people were raised to 40 percent, it would bring an additional $157 billion to the U.S. government. Raise it to 45 percent, and it’s a whopping $276 billion.
Some immediate needs come to mind if such funds were made available.
* The nation’s highways and bridges are in dire need of repair. Officials with the Federal Highway Administration say an additional $176 billion a year is needed to bring them up to snuff.
* Republican Sen. Marco Rubio of Florida proposes a child tax credit of $2,500, though in his campaign for president he doesn’t say how he would pay for it. Price tag, $109 billion.
* Democrat Bernie Sanders would like to make college tuition-free at all public institutions. Cost, $47 billion.
* Hillary Clinton proposes a tax credit of $2,500 a year for an individual and $5,000 a year for families if their health care costs exceed 5 percent of their annual income. As for prescription drugs, she favors a $250 cap before insurance kicks in. Costs unknown, but by using Rubio’s matrix it could be in the neighborhood of $300 billion.
* The federal government’s expansion of Medicaid to cover an estimated 17 million Americans costs an annual $116 billion.
* The federal government’s deficit is $426 billion.
TRUDEAU won because Canadians feel they were misled by conservative orthodoxy.
An austerity program of lowering taxes and cutting programs not only depressed Canada’s economy, but also its people.
Kansas, take note.
— Susan Lynn
