Are the rich paying their 'fair share'? Alabama financial guru lays out the stunning statistics

With the 2016 elections right around the corner, the familiar debate over tax policy and whether the rich — the “Top One Percent” — are paying their “fair share” has returned to the forefront.

Birmingham, Alabama-based financial guru Jeff Roberts, who was recently named one of the top private wealth advisors in the nation by Barron’s®, came on Yellowhammer Radio Tuesday to lay out the facts so people can decide for themselves.

The full conversation with Mr. Roberts can be heard on the Yellowhammer Radio podcast or in the video above, and a lightly edited transcript of his interview with Yellowhammer’s Cliff Sims can be read below.

Subscribe to the Yellowhammer Radio Podcast on iTunes. Learn more about Jeff Roberts’ private wealth advisory practice at JeffRobertsAndAssociates.com.

Cliff Sims:
Shine some light on the issue of Federal income taxes for us. Is there any data available that can help us to understand the money our government collects in income taxes?

Jeff Roberts:
Yes, my research found a few organizations dedicated to showing Americans how taxes, government spending and regulations affect them. Two such non-partisan research and educational organizations are the National Taxpayers Union Foundation (founded in 1977) and the Tax Policy Center. I don’t really endorse those organizations, but I use them as a reference for organizing the data released by the IRS.

Cliff:
What does the IRS data show?

Jeff:
The first thing that sticks out to me is the income levels broken out into percentiles. There may be some surprises here. (The table below via Kiplinger lays out what Jeff found.)

Cliff:
Do we know what percentage of the taxes are paid by these particular groups?

Jeff:

Yes, the numbers released by the IRS can summarize that. (The table below via Kiplinger lays out what Jeff found.)

Cliff:
What has been the trend? Are we at a point now where the high incoming earners are paying a greater percentage in personal income than they have in times past?

Jeff:
In 2013, the top 1 percent of earners paid about 38 percent of all income taxes collected. Back in 1980 they were only paying 20 percent. So the top 1 percent are shouldering much more of the tax burden now than they were then, almost double. The bottom income earners back in 1980 were shouldering about 7 percent of all the taxes collected. Now they’re shouldering about 2.78 percent.

Cliff:
Tying this back to the current elections, what should we do with this information? Is there anything we can learn from this data as it applies to this election cycle?

Jeff:
I’m a private wealth advisor, I’m not here today to preach a republican or democratic agenda. Candidates are making promises. So if a candidate is promising to “Build a wall” or make “College tuition free for the middle class and debt free for all”

Ask, “How are we going to pay for these things? Who is going to pay for these things?” And if the answer is “We are going to pay for these things because Wall Street, corporations and the ‘super-rich’ going to start paying their fair share of taxes,” well, you may want to reconsider the accuracy of that assertion.

So if an individual stands on a mountain top and screams “Smoking doesn’t cause cancer!” Well, that’s nonsense, the data clearly shows otherwise. So, if someone stands on the same mountain and yells “American families in the top income percentiles are not already paying ‘their fair share’ of taxes,” well, that’s nonsense too. The facts show the person on the mountain top is simply wrong.

In both mountain top scenarios, where are the people at the foot of the mountain shouting, “Shame on you for being misleading”? The facts show that the people who are sometimes challenged for being successful are the very people who are shouldering an overwhelming lion-share of the tax bourdon in this country — and a big thanks to them, they are the patriots. And if indeed the United States is in desperate need of additional revenue to fix our problems (pay down debt, build our roads, improve our schools) perhaps we should approach those most successful among us and ask them to dig deeper in order to save our country rather than demonize them. Lift them up as the solutions to our problem vs. the cause of it.

Subscribe to the Yellowhammer Radio Podcast on iTunes. Learn more about Jeff Roberts’ private wealth advisory practice at JeffRobertsAndAssociates.com.