The 2012 Presidential Election will undoubtedly go down in U.S. History as an event where deliberate  misinformation, directed at the electorate, has reached new heights. Regrettably, it’s not the candidates that bear the blame; rather a media, political action committees, pundits and booksellers that are accountable for this outrage. These individuals have personally so much  at stake that you can no longer look to them for impartiality and enlightenment.

There are two recent incidents that come to mind that illustrate my point.

1. Governor Romney’s remarks regarding the 47%.

I’ve sat through the video (twice) of Governor Romney’s fund raiser in FL, where he refers to the 47% of the vote he would not get. What he was conveying to his audience is that the campaign’s focus needs to be on the 5% of voters who are undecided; essentially the middle to upper middle class voter. It is no different folks than a marketing executive meeting with his folks to properly place a product. However,in his interest to focus the group, he made a comment that was quite frankly stupid – “…the 47% pay zero taxes…” Take a look!

An individual earning $10,790 in 2011 had a total tax liability of $104 on his federal income tax return. That is an effective tax rate of 1%. Governor Romney this individual paid taxes!

2.   Barack Obama’s redistribution of wealth.

Tapes have surfaced that reveal President Obama as someone who believes in “redistribution of wealth.” Just what is redistribution of wealth?

Redistribution of wealth is a socioeconomic term that describes a progressive tax. When economists say progressive, they refer to a tiered system in which earners with the highest incomes pay a larger percentage of tax scaling down to the lowest earners.

Why are taxes a redistribution of wealth? Governments raise revenue from taxation, those revenues are then allocated among a number of activities that include, infrastructure, defense and social entitlement like Social Security and Medicare. In this manner, taxes are collected and redistributed for the benefit of all.

Some historical background.

• From 1791 to 1802, the United States government was supported by internal taxes on distilled spirits, carriages, refined sugar, tobacco and snuff, property sold at auction, corporate bonds, and slaves.
• In 1862, in order to support the Civil War effort, Congress enacted the nation’s first income tax law. It was a forerunner of our modern income tax in that it was based on the principles of graduated, or progressive, taxation and of withholding income at the source. During the Civil War, a person earning from $600 to $10,000 per year paid tax at the rate of 3%. Those with incomes of more than $10,000 paid taxes at a higher rate. 
• In 1913, the 16th Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system. The amendment gave Congress legal authority to tax income and resulted in a revenue law that taxed incomes of both individuals and corporations.
• The withholding tax on wages was introduced in 1943 and was instrumental in increasing the number of taxpayers to 60 million and tax collections to $43 billion by 1945.

  Regrettably, Barack Obama can not take credit for the redistribution of income concept; as you can see it was 1862 when the concept emerges in U.S. History. Since its inception in 1913, the U.S. Tax has been a progressive tax and the concept of taxation is redistribution of wealth.

  What most tax reform advocates want to do is eliminate the gap between marginal tax brackets and effective tax brackets. Doing so, makes taxes flatter and eliminates the economic advantage that wealthy individuals have. The result of that is that marginal tax brackets across the board can be reduced. In any scenario, taxing income is a redistribution of wealth.