It’s an election year and Democrats are, as usual, outbidding Republicans with unlimited giveaways to the masses. But how will they finance this when the national debt tops $35 trillion and federal spending is projected to exceed revenues by $2 trillion this fiscal year? By “soaking the rich,” of course. The Kamala Harris and Tim Walz road show repeatedly recite the Democrat mantra, “the rich don’t pay their fair share of the taxes,” but never say what that fair share is.

The Statistics on Income Division of the Internal Revenue Service issues a report, Publication 1304, each year on who makes what and who pays what in federal income taxes. Its most recent report was issued in April based on individual income tax returns for 2021. The results are displayed in the chart included here.

Of individual income taxes on 153 million tax returns filed in 2021, the top 1% numbered 1.5 million filers with an adjusted gross income (AGI) over $662,577. That group earned 26.3% of national income and paid fully 45.8% of income taxes. The top 5%, 7.6 million filers with AGI above $252,840, earned 42% of national income and paid 65.6% of all income taxes. Those in the bottom 50%, 76 million filers whose AGI is below $46,637, paid only 2.3% of national income taxes. (Incidentally, those in the bottom 47% paid 0%.) When you peruse the groupings displayed, make your own judgment about “fairness.”

The top 1%, of course, includes Elon Musk and other captains of industry but leaves ample room for mere millionaires such as entertainers, actors, pro athletes, media personalities, lawyers, politicians, etc.

This IRS report isolates income taxes for good reason. Democrats confuse the issue by lumping income taxes together with payroll taxes such as Social Security and Medicare. But payroll taxpayers specifically derive the benefits of these programs. Income taxes are directed at everyone and everything else in general. And income tax rates uniquely affect incentives and disincentives for work and investments.

The reason Social Security taxes are capped above a certain income level is not as a favor to the rich. It’s because their benefits are similarly capped. (Moreover, mandatory Social Security is a lousy investment for upper-income taxpayers given their alternatives.)

Tax rate cuts don’t necessarily lead to reductions in tax revenues In 1981, when the top marginal tax rate was 70%, the top one percent’s share of the national income tax burden was 17%. President Reagan’s tax rate cuts for everyone stimulated an economic boom that increased tax revenues. When the top marginal income tax rate was lowered 28%, it led the rich to abandon less profitable tax-sheltered investments and expose more of their income to taxation of more profitable ventures, with a consequent increase in tax revenues for the government.

In the 1990s, Bill Clinton’s capital gains tax rate cut also produced higher revenues. George W. Bush’s and Donald Trump’s tax rate cuts for everyone had the same effect. Thanks to reductions in the top marginal tax rate (which is now 37%) the top one percent’s share of the income tax burden has continued to grow from 17% in 1981 to 45.8% in 2021, as shown in the chart.

The same dynamic explains why retail stores lower their prices in big holiday sales. The increased volume leads to higher profits. In a market economy, incentives matter — a concept Democrats just don’t get.

Harris favors a tax on “unrealized capital gains,” the latest socialist brainstorm. For example, if you invest $50,000 to buy 1,000 shares of a stock at $50-a-share and it goes to $100, your holdings are now worth $100,000 including the $50,000 capital gain. At year-end, you’d be taxed on that even though you haven’t sold the stock nor received any proceeds. If the price drops back to $50 the next year, after tax you’d poorer than you started. Once established, this tax could be extended to “unrealized” gains in the value of your home, gold, unimproved land, even your Mickey Mantle rookie baseball card. Socialism has no limits.

Harris and the Democrats’ socialist wing are itching for a wealth tax. On you annual income tax forms, you’d also be required to detail your wealth and net worth. And IRS will add another 50,000 agents to audit everyone. Then they’d take a percentage of your life savings every year until it’s gone or your dead. It’s fairer that way, isn’t it?

Mike Rosen is a Denver-based American radio personality and political commentator.