75ES3358 4x5 @ 72 ResMost people agree that everyone should pay their ‘fair’ share of taxes. The disagreement starts when we attempt to define “fair”. Webster’s dictionary defines ‘fair’ as a situation in which everyone is treated equally and in a reasonable way, and states further that ‘fair’ is reasonable and morally right. President Obama raised the issue of fairness in his 2012 State of the Union address, with the implied message that our tax rate tables are unfair because Warren Buffet is paying a lower income to tax ratio than his secretary.

Our current tax code doesn’t treat each taxpayer equally. That would be a flat tax where each taxpayer pays the same percentage of their income in taxes, including the income received from investments and capital gains. Our tax code is knee-deep with exemptions, credits, and deductions that reduce the amount of taxes we pay from the full amount owed based on our gross income, and capital gains are taxed differently than wages. It’s not equal; it wasn’t designed to be equal. However, unequal doesn’t necessarily mean unfair. A taxpayer with a large mortgage paying higher amounts of interest will pay less in taxes than another taxpayer with the same income and no mortgage. Many self-employed taxpayers take full advantage of the deductions available to them, reduce their taxable income and pay far less in taxes than the employees. When President Obama compared Warren Buffet’s tax rate to his secretary, far too much detail was omitted to fully understand the comparison. Does she have a spouse with taxable income as well? At close to 36% tax rate, she is likely to have income greater than 97% of the population. Not bad for a middle class secretary. They call it spin for a reason and it’s disappointing to me that our President would attempt to mislead our nation on such a transparent issue.

I think we can all agree that millionaires and billionaires should pay their fair share of taxes. The top 1% of taxpayers pays more taxes than the entire bottom 95% combined. Should they pay more? What is a ‘fair’ share? Fundamental tax reform may be necessary, but it will take fundamental change in how our government, Federal and State, operates and functions. In the meantime, I’ll finish my tax return and send in my fair share.