No one wants to pay taxes.
It's human nature to get as much as you can for as little you can. Although the principle of "getting the best deal" may work in many cases, it does not apply when it comes to paying taxes. But working on the assumption that Benjamin Franklin was correct in saying that, "nothing is certain except death and taxes" and that you will pay taxes, you need to have a historical perspective to reasonably gauge the appropriateness of our tax rates today.
Federal income taxes were first applied in 1913. Since 1917, except for 2 periods (1924-1931 and 1987-2008) which, coincidentally, preceded the two worst economic events in our history, the tax rates for the highest earners in this country have been between 50%-92%. In fact, in contrast, the highest tax rate in the years 1950-1958, during the entire Presidency of Dwight Eisenhower, was no less than 91% for those earning $400,000, or $3 million in today's dollars. This is considered to be the era when the US had the greatest relative prosperity of anytime in our history. Obviously, in this case a 91% tax rate had virtually no effect as either a disincentive to the wealthy, or an adverse effect on the growth of wealth or power of this country. For more details see the attached link… http://www.ntu.org/main/page.php?PageID=19
Unless those people who call Obama a "Socialist" today, also call every President since 1917, (excluding Coolidge, Hoover, both Bush's and even Clinton) "Commies" and "Socialists"… which includes such famous "Commies" as Dwight Eisenhower, Richard Nixon and even Ronald Reagan… the argument that higher tax rates on the wealthy are unprecedented and "socialistic" is blatantly false.
Since the inception of income taxes, the wealthy have always contributed proportionately more than anyone else. This is precisely because the cost of basic survival remains the same whether you're a billionaire or a street person. The difference between a 25% tax rate on someone with net earnings of $35,000 (which leaves them $26,250 to live on) and a 45% tax rate on someone with net earnings of $350,000 (which leaves them $192,500 to live on) is $166,250.
As anyone who lives on a salary of anywhere near $35,000 knows, there is a huge difference between surviving on $26,250 and $192,500. The difference in human terms is whether you can afford to repair the transmission on your 1997 Toyota, or whether you can replace your 3 year old Mercedes with a new one. What percentage of a family budget of someone earning $35,000 goes toward feeding themselves, compared to the proportion of someone earning $350,000? The question is rhetorical. Even if you don't know the specific answer, you get the point. I can speak with some authority on this subject, since I've lived with plenty of money and virtually none. I know intimately what both places are like.
The "trickle-down theory" which is frequently used to justify why it's good for all Americans that wealthy people are… well… wealthy, may be valid to a point. As long as the super-wealthy 1% of the population, which by the way account for 42% of the total wealth in the US, are able to consume proportionately anywhere near what their wealth indicates. After all, how many houses does Bill Gates occupy? How many cars does Warren Buffet own? These people don't consume anywhere near the value of their wealth. They more than not simply amass and control wealth. I'm not blaming them for this, but that is reality.
I have nothing against free enterprise, or people making gazillions of dollars. But there is a theoretical reality in life that everyone is created equally. Although as far as the law and as far as our human compassion are concerned, this should be true, the physical reality however, is not. Not everyone defines "success" in the same way, nor does everyone have the physical ability, or the mental or emotional capacity to "succeed" financially in the same way. This is not to say that everyone shouldn't strive to be the best they can be in whatever way they define "best". But not everyone can be a lawyer, or a doctor or a Wall Street broker, no matter how much the rest of us may wish it.
However… whether you want to call it welfare, or "assistance" or subsidy, there is a cost to being an American. The truth is, our society, individually and collectively suffers when there are 200,000 veterans living in the streets… many of whom have been damaged by the violence that they have applied, or witnessed in combat. http://www.nchv.org/background.cfm We suffer when there are 1.5 million children who are homeless. http://www.time.com/time/nation/article/0,8599,1883966,00.html We suffer when there is violence in the streets. We suffer when our infrastructure is crumbling and our cities are filthy. In short, we all suffer when the impression is that no one cares.
I'm no bleeding heart. I'm not suggesting that we provide everyone with a sense of entitlement by simply handing money to people in poverty to make a "problem" go away. I do not believe unconditionally in all the social programs we have in place today. Many of them do not provide care, they simply provide money. This is not responsible or giving anyone an impression that collectively we care. It is roughly equivalent to what an irresponsible parent does by handing their child $20 to keep them occupied. This form of "care" does nothing but breed contempt and discontent. There are constructive things that can be done to fix many of our social problems, without simply throwing money at people.
The bottom line is that those that are affluent have an obligation to give back a part of what they have earned, in many cases from the very people at the bottom, who have provided them with the ability to be on the top.