Seventy-three percent of Americans think corporations don’t pay enough income taxes.  The majority of Americans think the wealthy don’t pay enough income taxes.

I usually like to at least appeal to scholarly and empirical evidence first in my argumentation.  But let me make my opinion on these assertions clear: they’re just plain bull.

Let’s look at some background-

First, the most successful Americans pay almost all of America’s income taxes.  As a matter of fact, the bottom 20% get far more in public services than they pay in taxes.  See the chart below for more staggering information.

Second, corporate taxes are far to high for working American’s good.  If you think corporations are distant evil giants who hurt the little guy, you forget what makes up a corporation–people.  Who benefits from the activities of a corporation?  The consumers who want to buy a product at the lowest price–you.  Or maybe evil “shareholders,” whom you may innocuously and inadvertently be a part of through your retirement savings.  Yes, that IRA portfolio or business pension just may be invested in one of those evil big oil companies who only serve the needs of their elitist shareholders, who may not be so evil or elitist after all.

Check out the graph below to see exactly how income revenues received stack up (click to enlarge). 

America’s corporate tax rates are some of the highest in the world– big whoop, right?  Pop quiz time, kids.  In an economic slowdown, what do businesses need to avoid firing workers: (a) better regulatory oversight, (b) Caps on CEO pay, (c) nerf guns, (d) lower costs.  If you marked (b), you may be partially right in so much as salary cuts will probably come.  If you think your friendly politician is best equipped to make that decision, you’re naive at best.  

Naturally, we want to minimize costs to employers, small businesses, and producers in America to avoid job loss.  One of the greatest costs is an obtuse corporate tax rate that, at 35%, about ten points higher than the average in socialist Europe.

Third, Senator Obama’s proposed capital gains tax rate hike would be a deadening blow to the economy.  While his excessively pessimistic view of the economy (“…in shambles”) may be hyperbole, an Obama administration might ensure it becomes reality as soon as possible.  Contrary to popular believe, capital gains taxes aren’t just extra money from the broker trading over the phone from behind his 52” plasma.  Instead, they make in extremely difficult to yeild any profit on an investment at all.

Having a hard time coming out ahead on any investment hurts, small businesses, working Americans with retirement savings, or the Smiths who own a few stocks for some savings security.  If a capital gains rate where to be raised to 25%, any investment you make would need to see more than a quarter return to even break even.  If you have a good year and see a 10% return, that does nothing more than offset the cost of taxes when you sell.  Ponder the economic impact this has on decision-making.

Finally, the Bush tax cuts aren’t for the rich, and the political spin of Barack Obama and his politically-blinded economic adviser Austin Golsbee is preposterous.  The Bush tax cuts actually shifted the tax burden more toward the wealthy.  If we see the biggest tax hike since WWII, as Obama et al desire, people will see their taxes go up across the board.  Even so, his promises to raise corporate taxes and payroll taxes will throw extra baggage on the economy to ensure it moves as slowly as possible.