Latest / Conversations: Special Guests with Preston Scott / What The IRS Data Says About "Fair Share"

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What The IRS Data Says About "Fair Share" · Conversations: Special Guests with Preston Scott

• 0:12
  Five minutes after the hour. It's a third hour, and here we are
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  celebrating our twenty second year of doing this silly little radio program. Good Morning
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  Show with Preston, Scott and Preston. That's Grant Allen running the show.
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  Great to be with you, and I'm thrilled to have with me this morning.
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  Scott Beacon. He has practiced as an attorney CPA. He's been the
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  officer with a couple fortune five hundred companies. I got to know him through
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  his work writing a blog called the bee Line, and you can find his
• 0:45
  work and subscribe to it yourself by going to Bline blogger dot blogspot dot com.
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  And Scott Beacon joins us right now. Good morning, Scott, how
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  are you morning, Preston. Glad to be here, especially a privilege to
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  be here on your twenty second anniversary. One run you had it just worked
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  out. I'm thrilled that we're still doing this show, but I'm even more
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  thrilled that I've gotten to meet people like you over the year. Scott.
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  We have a common friend, Rob Strano, who is a golf professional out
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  in Destin, and I've had Rob on the program once or twice over the
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  years. And he introduced me to the b line. Before we talk about
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  a recent blog that you wrote. How did this all start for you,
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  because you've been blogging for a while now, Well, it started when I
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  was working for one of those Fortune five hundred companies and I was given the
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  responsibility to oversee corporate communications, marketing, advertising, etc. And part of
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  that job this is about twelve years ago, I guess now, part of
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  that job was the emergence of social media blog Twitter, et cetera. And
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  I thought I had to learn a little bit more about the area. And
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  I've always been interested in sharing articles and insights with regard to what was going
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  on, and I thought maybe I had to jump in and learn a little
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  bit about the blog space by writing my own blog is an efficient way to
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  share some of my insights with friends and family, and it just has gone
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  from there. When I look at your bio, Scott, I see a
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  guy who by profession is a numbers cruncher, as someone who I would say
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  details matter an awful lot, and you sort of let the chips fall where
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  they may because that's the world you've lived in. Is that a fair assessment?
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  Very fair? You know, I'm a data guy. I'm a fat
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  guy. That's really, you know, kind of the basis upon which I
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  view the world. And and I have another saying that I like to use
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  in the context is everything when assessing anything. And I guess what I see
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  in the world today that's driven by headline and one second sound bites is not
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  enough. People get context of what's really going on behind the issues. And
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  well, that's what I try to provide in the blog's some context of the
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  issues and really put the facts before the opinions. You know, I've come
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  around as i've aged, and I've realized, you know, for example,
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  when I was younger, I reacted to things not a very good trade.
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  It's not a very winsome trait. I also don't think it's really good for
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  a forming opinion. I've learned to respond a little bit. That's why sometimes
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  stories break and I don't necessarily talk about them, because there's just something inside
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  of me that says, there's more to this. Let's give this a little
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  bit of time to marinate for a little while. The topic that you've just
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  touched on, though, is one that it's sort of the opposite. I
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  have long held the idea that Americans really have been sold a bill of goods.
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  When it comes to the word fair and I mentioned before the break,
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  I started a near fight at a rotary club meeting fifteen years ago when I
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  just asked the members define fairness. And I think it's interesting, how do
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  you define the word fair? Well, it's hard to define fair without taking
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  a step back and looking at the numbers with regard to what you're talking about
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  it specifically, we're talking about, you know, what is a fair share
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  of income taxes? And we hear the narrative a lot, and you're going
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  to hear it more and more during this coming election cycle. Right is the
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  other not paying the fair share? Or you're not paying your fair share?
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  And you know, if you look at the survey data, which I have
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  I'm a big believer in, look at survey data and poll data, you
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  know, you'll see typically that everybody thinks that they're paying their fair share,
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  but they think that everybody else is not paying their fair share. It really
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  comes to the beholder, and I can see why a fight almost started at
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  a rotary club. He got a second scott. Of course, only some
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  of us can be accurate when we say that we're paying our fair Share.
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  The rest of you just don't understand we're going to get to those numbers.
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  Scott Beacon with us again Beeline blogger dot blogspot dot com. I guess the
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  Scott Beacon the bee line is the blog we're talking about, and a recent
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  one came out late last week called fair Share. When I was privileged to
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  get Scott's contact information, I said, Hey, I'm going to talk about
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  this and I'd love to talk about it with you since you provided the inspiration.
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  So let me ask you this what poked you? I mean, is
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  it the fact that we're in the election season and this is going to be
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  a topic, or did something nudge you to do some digging on this.
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  No, I've been following this topic for a number of years, you know,
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  going back to my days when I was a tax attorney and a CPA.
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  You know, the IRS produces every year what they call statistics of income.
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  It usually takes them a couple of years to put everything together. So
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  it was only the end of February that they came out with the data for
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  twenty twenty one tax returns. But I've been following this for decades really and
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  looking at these numbers and so It's something that I have written probably over the
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  years, probably five or six times in my blog about these statistics, and
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  the most recent numbers came out, and it's it's pretty shocking when you look
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  at it. I always like to when I get someone that likes to talk
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  about, you know, the risk but not paying their fair share or whatever,
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  and you go back to your question, Presston, what is the fair
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  share? And you you say, what do you think the top one percent
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  should be paying as part of their fair share? And you know, you
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  might get numbers all they have to be paying twenty percent of the total,
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  and then you, you know, you tell them what the actual number is,
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  and usually shock goes over their face. Yeah, And it's to me,
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  it's not all that different from the same type of discussion that happens over
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  the minimum wage. Well, if if it's going to be twenty dollars an
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  hour, why not seventy five dollars an hour? And then suddenly someone goes,
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  well you can't do that. I'm going, well why, And then
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  you have to start unpacking all of the foolishness of a mandated minimum wage being
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  the way it is. But when it comes to the fair share of personal
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  taxes. What do the numbers show you. Well, in the most recent
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  year, the top one percent of income earners, which would basically be those
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  above seven hundred thousand dollars was of income. In the year twenty twenty one,
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  they paid forty six percent of all income taxes in the United States.
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  And that's the highest fare by far. I mean, if you go back,
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  for example, of the year two thousand, let's go back about the
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  time you started the show, they were paying thirty seven percent of the total
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  tab. It's increased now to forty six percent of the total tab. The
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  top five percent is now paying sixty six percent, the top ten percent seventy
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  six percent, and the top fifty percent ninety eight percent, which means the
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  bottom fifty percent is only paying two percent. It immediately speaks to why our
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  founders were so worried about a government that eventually handed a checkbook over where people
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  were in essence able to live off the government exactly. And if you go
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  back to the Constitution, the Constitution as written by the founders prohibited the imposition
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  of direct taxes, which an income tax is a direct tax. It was
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  only you know, through the sixteenth Amendment. I think it was that we
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  allowed an income tax to be imposed in the United States. So it was
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  not in the original founder's view because exactly what you're saying, they were worried
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  about how government could use direct taxes to really infringe on my minority, which
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  really what the Constitution was all about. You know, majority rights but also
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  minority rights. You would not have a majority infringing on the rights of a
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  minority. WSLA on your phone with the iHeart radio app and on hundreds of
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  devices like Alexa, Google Home, Xbox, and Sonos. So here we
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  go in Ihearts radio station. Scott Beacon writes the b Line blog it's Bline
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  Blogger dot blogspot dot com, and our guests, we're talking about a piece
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  he did recently called fair Share question Mark. And if you listen to the
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  show for very long, you know that I've talked about this for twenty two
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  years. It's it's been a bone of contention for me, and so when
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  I raise it at a rotary club meeting, a near fight breaks out because
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  you've got the people that are very liberal and left in the room that just
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  think that big business and wealthy people ought to pay more. And you know,
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  Scott, businesses never pay taxes. They pass it on to consumers,
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  and people don't seem to understand where this all leads. What does the data
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  say to you when it's all said and done in the in the macro.
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  Well, you know, one thing I think that needs to be mentioned is
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  that there's no question over the last you know, forty years, that the
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  share that the one percent has as the top one percent has also increased,
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  you know, compared to nineteen eighty. And a lot of people say,
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  why is that the case? And part of the reason is is the way
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  the economy has changed and the way the tax code has changed. You know,
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  when I first started practicing as a CPA, a tax attorney, you
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  know, the top marginal rate was seventy percent, and at that point in
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  time, you know, many people incorporated because the top corporate rate was forty
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  eight percent, and so the rich would have all their money in corporations and
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  they wouldn't have it exposed to individual income taxes because it didn't make much sense.
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  Well, as the marginal rate came down, that forced people more to
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  go to partnerships subest corporation so they would not be double tax but that then
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  exposed their income to individual income taxes. So a big reason that the one
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  percent amount that the income as the one percent has has gone up is that
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  has gone into individual tax returns. And the other thing that's going on is
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  technology. You know, back in nineteen eighty uh you had workers, auto
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  workers, steel workers, et cetera. The manufacturing sector was still robust in
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  this country, and it took a lot of workers, to example, to
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  produce a manufacturing product. As the technology advanced to where we are today,
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  you know, seven or eight guys can sit around and do a game,
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  a video game, and they can make millions of dollars. That goes into
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  income and the one percent. So you've had a fundamental shift with regard to
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  how some of this has worked so that that has an effect. So there's
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  no question that the income share of the one percent has increased. But the
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  question they really have to look at as a society and as a country is,
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  you know, we're one point nine million at one point nine trillion dollar
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  deficit this year, you know, and we're borrowing and borrowing and borrowing,
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  and we borrowd eleven trillion dollars in the last four years. Now, how
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  do we fix this? How do we have any semblance, and it certainly
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  cannot be done by taxing the one percent. It's not going to happen.
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  And if you look at what's happened in Europe with their social systems, the
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  tax burden is much much greater on the middle class and the lower class in
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  those countries than it is in the United States. So we're going to have
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  to decide in this country. You know how we're going to get this financial
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  house and order? Is it going? I mean, it has to involve
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  at some point government's going to have to cut it's spending. But will they
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  Well you would think they were going to have to, but to this point
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  it just seems to accelerate. And this goes to another point that I've made
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  time and time again in the pages, is you have to understand politicians,
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  elected representatives, Republicans or Democrats. The power really comes from taking dollars from
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  one person and giving it to another. That aeroids probably with Democrats, but
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  the same thing exists with Republicans with ear marks, etc. That's the nature
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  of the beast. They don't have any power unless they have your tax dollars
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  that they can give to somebody else. That's the name of the game.
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  So it's very hard to break that, and I'm not real optimistic when I
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  look at the history where it's gone that we can go another direction. It's
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  going to be very, very difficult. But the voters ultimately, or the
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  ones that are going to have to determine where it goes because politicians will eventually
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  listen to the voters. I feel like we are in the largest ship on
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  the ocean with the smallest rudder ever made way to put it. Scott,
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  thank you for the work you do. I appreciate the blog very much,
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  and I appreciate Shade our new friendship here on the program. I look forward
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  to having you back. Congratulate license again on the twenty two years. Thank
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  you, sir, Scott beacon with us this morning and again. Bline blogger
• 15:11
  dot blogspot dot com is where you can subscribe. It cost nothing and what
• 15:18
  you get you can't put a price on. How's that for a great deal?
• 15:20
  There you go, twenty second anniversary offer here on the Morning Show with
• 15:24
  Preston Scott. You subscribe today and it's not gonna cost you a thing.
• 15:30
  Bline Blogger dot blogspot dot com, twenty seven past the Hour