-
Neighborhood Watch, Anyone?
May 14, 2013 | 19 comments
-
We’re Still Going Backward
April 18, 2013 | 30 comments
-
Street Level Anti-Capitalism
April 8, 2013 | 71 comments
-
Snazzy Sequestered Screeners
March 8, 2013 | 13 comments
-
Welfare’s Failure Amid Red Ink
February 7, 2013 | 23 comments
A Further Perspective
Plucking the Fortunate Chickens
How soon before more than half the population pays no income taxes?
Here’s the news from the New York Times on the day before tax day: “Forty-seven percent. That’s the portion of American households that owe no income tax for 2009. The number is up from 38 percent in 2007.”
Given that nine point jump in no-pays in just two years, it looks like it won’t be long before a solid majority of American households are taking out more than they’re putting in when it comes to federal income tax monies.
Here’s the problem. Paying zero, what’s their incentive to keep from pushing for bigger spending on every federal boondoggle that’s funded by the income tax, no matter how wasteful or crooked the project? To have a better shot at getting something for nothing, why shouldn’t they all be riding around with “Raise the Income Tax” bumper stickers on their cars?
Scott A. Hodge, president of the Tax Foundation, illustrates the issue this way: “There’s always one person in the lunch group who orders the most expensive meal on the menu because she knows you are all splitting. The same thing happens in government. A growing number of Americans are contributing little but taking a lot, and a shrinking number are giving a lot but taking little.”
Actually, it’s worse than that. Half the lunch group isn’t going to pay. Their wallets will stay shut when the bill comes. No splitting. So why shouldn’t they order filet mignon and top shelf martinis? Why should they care if millions of income tax dollars are extracted from the wallets of their paying neighbors and sent off to study why some bugs have seen better days when it comes to their libidos?
As it stands, Tax Freedom Day (how long we have to work before we’ve earned enough to pay our tax bill at the federal, state and local levels) arrived on April 9 this year, well over three months into the year, according to the Tax Foundation.
Overall, reports the Tax Foundation, “Americans will pay more in taxes in 2010 than they will spend on food, clothing and shelter combined.” And that doesn’t count this year’s trillion-plus federal deficit, money the government is spending without collecting the taxes, red ink that guarantees higher tax rates in the years ahead.
“Unfortunately, Tax Freedom Day is merely the proverbial calm before the storm,” Doug Bandow, a senior fellow at the Cato Institute and a former special assistant to President Reagan, warned in a column for this site. “In a world of endless red ink and the coming debt tsunami, spending rather than taxing is the true measure of government’s burden.”
Explains the Tax Foundation: “Since 2008, deficits have been massive by any measure, and as a result Tax Freedom Day may give the impression that the burden of government is smaller than it really is. Since 1948, when Tax Freedom Day was first calculated, the difference between what governments are spending and what they’re collecting has never been as great as during 2009 and 2010.”
Include this red ink and the real cost of government, the number of days we’re working to pay the bill, explains the Tax Foundation, goes up by over a month: “If Americans were required to pay for all government spending this year, including the $1.3 trillion federal budget deficit, they would be working until May 17 before they earned enough to pay their taxes — an additional 38 days of work.”
That’s 137 days — 38% of the year. Medieval serfs generally had to work three days out of seven on the land of the lord of the manor. That’s 43% percent. We’re getting close.
About the Author
Ralph R. Reiland is the B. Kenneth Simon professor of free enterprise and an associate professor of economics at Robert Morris University in Pittsburgh.
Letter to the Editor View all comments (57) | Leave a comment
More Articles by Ralph R. Reiland
More Articles From A Further Perspective
http://spectator.org/archives/2010/04/21/plucking-the-fortunate-chicken
Follow us:
ADVERTISEMENT
Current Issue
- Self-Righteous Republic
- Obama’s Drone War
- The Demise of Money and Credit
SPONSORED LINKS
FLASHBACK TO: 1995
-
Pope Culture
A man of faith in a godless age is hitting Americans where it hurts.
-
Why the GOP Does Not, Like, Totally Suck
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
-
Dames at Sea
-
In the Absence of Guns
In Britain, defending your property can get you life.
-
The Metaphysical Martini
-
Counting the Costs of Clintonism
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
-
Chuck McHagel
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
-
The Legacy of Old John and Mother Fresh-Roasted
-
It’s the Best Time of the Year
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
-
The Bush Crack-Up
Was the President done in by the economy, or by the politics of the economy?
Clip of the Day
ADVERTISEMENT
Steve| 4.21.10 @ 6:43AM
The current system will inevitably totter and fall over on its side. Those who can, myself among them, will wind down careers and businesses and retire rather than continue the game. The remaining taxpayers will engage in the equivalent of a work slow-down. Hence, the inevitability of a VAT recommendation from the Bowles-Simpson deficit squad.
Foul and insidious as a VAT is, it has the virtue of dragnetting the current tax avoiders into the system. The resulting black markets will be hilarious to observe, though.
Rodman| 4.22.10 @ 6:00PM
Missing from this article and the entire comment stream is the recognition that the increase in tax paid by the top 10% or 1% of the income specturum and the decresing portion of the population that pays any tax at all is DIRECTLY connected to the vast disparity in income growth between the working class and the top 10% of the income spectrum(Who produce no wealth themselve, but 'wring their bread from the sweat of other's brows'), and the resulting increase in economic stratification of our society.
The VAT would actually compound this injustice, not remedy it.
A working-class family of modest income that pays a 10% VAT on everything they buy will pay a 10% Income tax, as they spend everything they earn on necessities.
A person earning 100 times that amount, tends to spend a far smaller portion of their income. Maybe 3/4 or 1/2? So only 1/2 of their income would be subject to VAT tax. The rest is put to 'work' earning more tax-free income.
So the top 10% of the economy would pay maybe a 5% effective income tax rate while the working poor and middle-class would pay twice that share.
Sound good?
GavInTucson| 4.23.10 @ 3:16AM
I wouldn't mind a VAT so much, as long as the income tax was abolished.
A VAT would be more inline with the founding principles of an excise tax, as opposed to income (direct) taxes that were unconstitutional up until 1913.
Forcing everyone (yes, even the poor) to have "skin in the game" would make them rethink tax policy.
Again, this would all be dependent on the abolition of the income tax, which I can't imagine either political party trying to do.
rodman| 5.4.10 @ 4:56PM
It's not that the poor have 'skin in the game', it's that the same 10% means allot more to them in terms of meeting basic needs than it does to someone in the upper 1/5 of the income spectrum.
Should the working poor go hungry one day in 10 just so the rich can keep more of their excess and so everyone has 'skin in the game'?
I would argue this is unjust.
Carol| 4.21.10 @ 6:56AM
Despite how awful a VAT would be, everybody would have to pay - even those thugs and slugs sitting around doing nothing to get a paycheck from me! That would show them that "THERE'S NO SUCH THING AS A FREE LUNCH!"
Curly Smith| 4.21.10 @ 8:32AM
Uh, no. Those slugs would be paying the VAT with a stipend taken from you. Their tax rate would stay the same, zero, while your rate would increase to pay your VAT taxes and their VAT taxes.
Northright| 4.21.10 @ 12:50PM
I am sure the DemoCommies will put a credit on the slugs' tax forms so they get a "credit/refund" for the VAT they would pay. Thus the slugs still pay nothing.
Melvin| 4.21.10 @ 7:56AM
Carol, of course there is a free lunch, and we're paying for it.
Old Soldier | 4.21.10 @ 8:24AM
The new sign of a successful two-income family - indifference.
I have sat in my boss' office several times recently having the raise / bonus discussion and found myself totally indifferent to the whole thing. Bonuses are nice, but I only get to keep about half. Same with raises. How much harder I am going to work for half my money?
I literally had to feign interest in order to not be rude to the boss.
JimH| 4.21.10 @ 8:25AM
TANSTAFL. You may not pay. But someone always does. !st law of thermodynamics I think.
Bob the Engineer| 4.21.10 @ 9:48AM
The first law of thermodynamics relates to the conservation of energy i.e. energy can neither be created or destroyed only transformed.
JimH| 4.21.10 @ 10:55AM
The point being nowhere in the universe can you get something for nothing.
Curly Smith| 4.21.10 @ 8:27AM
By next year over half won't pay federal income taxes, by the following year over 60% won't pay. Unemployment is not going to go down, the official rate is around 10% but if you include the "discouraged" who are no longer looking for work then the rate rises to 17%. In large urban areas, however, unemployment reaches 50% for some groups.
Now, take those numbers and come June add the newly minted college graduates with their mountains of student loan debt. Plus, add the high school grads who won't be going on to college... and why should they when there aren't any jobs waiting for them when they graduate? Then get ready for some France style "youth rallies" in the summer complete with burning cars and torched buildings.
Normal unemployment in Europe is 10-15%, that's our new normal. Add the discouraged and those forced to take part-time work and the unemployment/underemployment rate will be 30%. Thanks Barack Hussein Obama, mmm mmm mmm!
Rodman| 4.22.10 @ 5:40PM
Sources for these numbers? Or are you just repeating what some unaccountable shiller spouted on the radio?
Bostonian| 4.21.10 @ 8:33AM
The fraction of people who pay more in federal taxes than they receive in Social Security, Medicare, Medicaid, food stamps, and other direct government benefits is likely even smaller than the the numbers cited. Government is becoming a form of organized robbery.
Troy Harmon| 4.21.10 @ 8:54AM
The problem with the idea that 43% of us pay no taxes is that those 43% will think they pay no taxes. There's still the hidden taxes in everything from cigarettes to gasoline to automobiles. Those of us in that 43% still pay those taxes whether we are told that or not. Any time a tax on production is raised the company raises prices, and the only way "95% of Americans" will not have their taxes raised is to only raise taxes on things that only 5% of us buy, like what I make. But then those 5% will delay or stop buying them, so my company loses income and has to cut back on employee hours, so I lose money. The other 43% of us do pay taxes.
Jack Olson| 4.21.10 @ 9:03AM
It's a specious argument to complain that only half of the taxpayers pay federal income tax. First, that was the way the federal income tax was originally designed and sold to the voters. When the modern federal income tax was enacted, it applied only to taxpayers with annual incomes equivalent to $10 million today. Second, as Troy Harmon has pointed out, people who pay no federal income tax still pay considerable taxes. Most American workers pay more payroll taxes than income taxes. They also pay tariffs and import duties, excise taxes, and taxes disquised as "user fees." They pay state and local taxes, too, which are mostly more regressive than federal taxes. The real fiscal problem isn't taxation, but spending.
Big Tony| 4.21.10 @ 9:46AM
Good point Jack. I knew someone who worked for US Customs he said the money they take in dwarfs what he IRS gets. There is also additional hidden taxes. Anyone that thinks the power company pays taxes rather than passing those taxes along to the consumer is kidding themselves. Same with all taxes corporations pay. Everyone not on Section 8 on in government housing pays property taxes too if you rent you pay the landlords, if you own you pay yours and anything you purchase or rent you pay for the retail store's, the manufactors, the distributors or the service providers. Out of every dollar you earn and spend if you pay income taxes over p of that dollar end up in goverment coffers. Far exceeding what the serfs had to pay.
Ned| 4.21.10 @ 1:35PM
Totally correct, BT - unfortunately King Zero didn't have to take any economics classes to get his EEO/AAP law degree, so that concept is total unknown to him, and therefore by definition, false. Probably Republican propaganda and hate speech, too.
Old Soldier| 4.22.10 @ 8:28AM
Of course utilities pass their taxes directly on to the consumer. In many states, however, they are not allowed to show those taxes on the bill. The rubes might get upset.
Tony in Central PA| 4.21.10 @ 9:26AM
I recently read a book about the city - state of Athens in ancient Greece. Shortly before its collapse, there was a shrinking proportion of the populance paying an ever - larger amount of tax. Sound familiar ?
Ken (Old Texican)| 4.21.10 @ 9:35AM
Mr. Reiland, folks,
I note that most of the article and comments are sorta' "macro" in viewpoint....the big picture.
May I outline from the "micro" perspective a moment by using examples?
>The women gonna' get some of Obamas' "stash" ignorance.
>The family man whose children are going to get hungry...next week.....if the gubmint check doesn't come on time.
>The small business man/woman literally desperate to keep their business afloat to avoid the total loss of years of sweat and risk.
> the 20 percent of the population similar to the idiots who come here who will stubbornly shoot off their own...foot, to "prove" they are right.
> The idiots who cannot understand that inflation of the dollar is the largest "tax" they will ever endure.
>the bankers, who are not allowed to raise interest rates along with inflation due to government mandates, will see their loan "assets" crash in value.
> the middle class tax-payer hesitating to "break the law" (black markets), to maintain a semblance of the life-style they have built over the years, or even to survive.
Folks, I must wonder just how the communizers, (pardon the shorthand), are going to utilize these realities as LEVERAGE, to try to hold on to power.
Thoughts?
Bob the Engineer| 4.21.10 @ 10:01AM
Two points first the 47% that pay no tax will not be the same people all the time some will increase their income and start paying. Many of the people avoid taxes because of large tax credits e.g. the $8,000 credit for buying a house or the $1000 credit per child. When my son turned 17 my tax bill went up by $1000. These credits will expire eventually and tax rates are going up on Jan.1,2011 so more people will be paying.
Drew | 4.21.10 @ 10:18AM
The problem with the "47% paying no Federal income tax" meme is this: It misses the root cause of this recent phenomenon.
In short it comes down to the fact that for the last ten years there has been essentially zero real wage growth for the majority of Americans. And this is despite the productivity of the American workforce has increased significantly - often outpacing our European economic competitors.
The caues of this are primarily twofold: One, most of the increased productivity gains has gone to pay for higher healthcare costs. Rather than pay higher wages, employers have had to pay more in health insurance premiums - despite pushing a growing share of healthcare costs onto employees in the form of higher deductibles and co-pays. The second cause is a byproduct of globalization. Lower-skilled American workers are now competing with workers in Mexico, China, and India.
The "fix" for this problem, at least as far as the Government is concerned, is clear:
1) We need to rein in the growth of healthcare costs. The Republican party had a golden opportunity to help do so during the recent debate on Healthcare Reform. They chose not to - instead opting to scream about "death panels" and "socialism."
2) The government needs to do all it can to ensure that the American workforce is the most highly-educated, technically proficient in the world.
At the end of WWII the US Government created the GI Bill, so that returning veterans could continue or complete their college education on the Government dime. The money spent on this program created millions of engineers and scientists, doctors and lawyers, businessmen and architects. It also helped create the richest, most productive society in the world. And whatever money was spent educating those returning GIs, got repaid a hundred times over in increased income tax receipts.
Ken (Old Texican)| 4.21.10 @ 11:31AM
Drew,
Your whole stupid thesis falls apart...
Those veterans had/have no relationship at all to the slackers and whiners you represent.
Those GIs EARNED their GI bill. God bless them.
Tony in Central PA| 4.21.10 @ 12:46PM
Drew, no amount of increases in worker education and productivity are going to counterbalance our rate of spending and borrowing ( and interest payments ).
As far as " reining in " health care costs, the number of people covered expands by 41 million under this Administration's own plan. So let's drop the vague, ideological platitudes and explain with real numbers and specific statements how this will happen.
antidote| 4.21.10 @ 10:39PM
Excellent post. As far as reducing healthcare costs, there is a very simple solution. Why should 40%+ of our healthcare $$$ go for profits to insurance companies? It is immoral for these companies to exist. They are only middlemen, not providers, not recipients. They are parasites. I believe in the capitalist system, but not when it comes to healthcare. I agree with the Catholic bishops on this one, healthcare is a basic human right, and I don't think we should have to make insurance companies rich to get that right. Single payer system will take care of this problem
GavInTucson| 4.23.10 @ 3:32AM
Antidote, I've got news for you... the profit margin for medical insurance companies is between 4% and 5%, not the ridiculous 40% number you're throwing around.
And if single-payer is a right, perhaps you could explain to the average Canadian or Briton why their health-care "rights" are being denied by their governments to the tune of 25%, while the other 75% have to wait to receive their rights an average of 12 months.
If you're such a fan of single-payer, perhaps you could just move to one of those countries and try it out for yourself. Canadians routinely travel to the U.S. to receive health-care they can't get in their own country (or, as you'd put it... receive their rights).
Rodman| 4.22.10 @ 6:48PM
Drew,
Adding some detail:
If we look at income growth since 1979 we see some of the reason for the shift in tax burder:
Top 1% of taxpayers: 256% increase.
Middle 1/5 of taxpayers: 21% increase.
Lowest 1/5 of taxpayers: 11% increase.
I guess that shows the folly of 'trickle-down' economics. The 'trickle' flows the other way, up!
The highest tax rate is currently 35% for all incomes over 372,950. There have been 5 years, total, since 1933 with a lower top-bracket tax rate than today's. FIVE YEARS.
For 54 years, beginning in 1932 the top tax rate never dropped below 50%. It seems rather difficult to explain the high percentage of tax paid by the top 1o% in any other way than admitting it's because the top 10% has A LOT larger share of the money than ever before.
The 'Greatest Generation' understood that Wars had to be paid for, not just sold and they paid for WWII and they paid for the GI Bill and they paid for the Interstate highway system, with taxes. For 12 years following WWII (1951-1963) the top tax rate was over 90%.
Yes the GI's earned their GI Bill, Ken(Old Texican), but then, unlike now, the taxpayers, particularly those who benefit the most from the opportunities earned with other's blood, weren't afraid to pay for the war and the GI Bill and the infrastructure that would fuel the growth required to pay back war bonds.
Imagine, if the rich had demanded a tax cut during WWII, while 1/4 million men were dying and people were eating out of 'Victory Gardens'!
GW| 4.21.10 @ 11:39AM
Walter Williams' take on this news...
http://townhall.com/columnists.....and_voting
Gill O’Teen ✝✡| 4.21.10 @ 11:56AM
I am pleasantly surprised that none of the comments I read above engaged in the usual defense of the kurrent klowns in kon-grrs by reminding us that THE EVIL BUSH also played high-roller on our dime. A Man much smarter and wiser than I could ever hope to be is quoted as once having said, “What man shall there be among you, that shall have one sheep, and if it fall into a pit on the Sabbath day, will he not lay hold on it, and lift it out?” (Matthew 12:11). He did not concern Himself with just how did that sheep actually fall into the pit. It did not matter. All that mattered was saving the sheep. Similarly, when the Titanic struck the iceberg, the initial priority was not who was to be blamed, but avoiding the inhalation of many gallons of chilly salt water. In every year since Eisenhower in 1957, Federal Debt has increased. However, for fiscal 2009 the Debt:GDP ratio was a mind-numbing 83.54%. The previous year it was 69.42%. For fiscal 1957, it was 58.67%. It took until 1991 for it to cross the 60% threshold. In the interim it dropped below 32% for 1974 and 1981. It remained pretty much in the 60s during the Clinton years though contrary to popular mythology, he never actually balanced a budget other than as the chief executive of Arkansas which has a constitutional mandate all its guv’ners do so. If his Presidential budgets were truly balanced, the debt would not have increased since the debt is simply an accumulation of budget deficits. Bush I also left office with this ratio in the 60s. Clinton’s last budget did leave OUR Country with this ratio at 56.46%. It has increased every year since. But what’s scary is that it bypassed the 70s altogether and is on track, by my estimates using numbers from http://www.usdebtclock.org, to cross into the unrecoverable zone of 90%, at which point too much money is devoted to nothing more than debt-service for an economy to recover, as soon as this April 29. The CBO recently projected that in about 10 years it will be 94%. So, at this point, I don’t care how we fell into this pit. I want solutions before 100% of us are unable to pay any taxes whatsoever.
Gill O’Teen ✝✡
gill.Oteen07041776@gmail.com
Now is the time for all to go Galt!
Only 8 days to fiscal Armageddon!
Gill O’Teen ✝✡| 4.21.10 @ 12:07PM
I also would like to point out, that no president is responsible for any budget. OUR Constitution mandates that kon-grrs has control of spending and a President’s role is only suggestion and signing. The Budget for fiscal 2009 was approved while Bush II was President. However, it would be more accurately called The Reid-Pelosi Budget since those two blankity blanks have lead their respective Houses since 2007 and they are responsible for the budgets of 2008, 2009 and 2010. That should help identify the problem and might suggest a possible solution.
Gill O’Teen ✝✡
gill.Oteen07041776@gmail.com
Now is the time for all to go Galt!
Only 8 days to fiscal Armageddon!
Doctor Right| 4.21.10 @ 12:28PM
As long as the slackers, the slovenly, the slobs, and the non-hackers can vote, we will always have this problem.
Call me a medieval dinosaur, but I've never been a fan of universal suffrage for this very reason.
If you pay ZERO income tax, and if you are receiving federal assistance/largesse, then you should NOT be allowed to vote in Federal Elections.
Sound crazy? Probably. But in the age of Obama, that's where we are. The lunatics are about to take over the asylum, and insist that we who work keep forking over more and more of our own hard-earned cash.
ENOUGH!!!!
antidote| 4.21.10 @ 10:45PM
What about Exxon Mobil, record breaking multi-billions in profits and $0 income taxes paid. Why is your outrage directed only to the poor and unemployed, it the mega corporations who aren't paying their fair share when they clearly have the ability to pay. they are the slovenly, slob, slackers, in lear jets and billion dollar vacation homes.
Victor Kamerovsky| 4.22.10 @ 3:09AM
Exxon Mobil provides tens of thousands of jobs, most of which are high paying and the income taxes from these jobs go into the treasury's coffers. I can't say that's the case with the Acorn crowd, which leave the state and you the tax payer with a substantial net tax burden. That's why I have less outrage for Exxon Mobil than those who create a major drag on the economy.
Ayn R. Key | 4.21.10 @ 1:16PM
That 47% only counts those whose 1040 shows a zero or less. It doesn't count the overlapping circle of 17% of people who are employed by the government. We may be over 50% by that metric.
Drew| 4.21.10 @ 1:29PM
Really?
Right now we have a Wisconsin businessman running for US Senate who, even though he made over $2 million in salary, paid zero state or Federal tax in 2008.
Story: http://www.jsonline.com/news/w.....23577.html
Republican developer Terrence Wall is a millionaire many times over. His net worth: between $58 million and $130 million. His income last year: between $2.3 million and $14.2 million.
and
In the last 10 years, Wall paid state income taxes only once, in 2005, paying $43,520, according to the state Department of Revenue.
So you are arguing that this guy shouldn't be allowed to vote? (I'm guess you still think its OK for him to run for Senate, to "represent the taxpayers..")
Doctor Right| 4.21.10 @ 1:53PM
YES. Mr. Wall should be allowed to vote.
He's a rich Republican who creates lots of jobs for others.
In truth, I only think that DEMOCRATS who don't pay taxes or who receive federal welfare shouldn't be allowed to vote.
Does that sound hypocritical?
Oh...I'm sorry. I thought that with a Treasury Secretary (and IRS Head) who doesn't pay taxes, and with a lying, duplicitous President who spends his days playing golf AND accepting millions of dollars from Goldman-Sachs that hypocrisy was fashionable again!!
My apologies!
Jim O'Brien| 4.21.10 @ 3:09PM
Congress uses the federal income tax to buy votes. The Fair Tax legislation introduced in both the House and Senate would end this corrupt manipulation by eliminating the federal income tax and the IRS, replacing revenue with a single, uniform national sales tax, paid on new goods and all services. About 60,000 pages of IRS regulations would be obsolete. There would be no individual or corporate income taxes, or complicated tax returns. No payroll withholding tax, no separate social security or medicare tax, no taxes on dividends, interest, or capital gains. No federal estate tax. No complicated IRA rules. The Fair Tax would be a tax on consumption, not production, so it would encourage savings and investment. The Fair Tax plan would result in unprecedented economic growth. For a full description, see www.fairtax.org
David| 4.21.10 @ 4:03PM
To Bob the Engineer, you are correct to say that 47% of the people will not be the same 47% in a year or two or three. People move up and down in income throughout their lives.
But that does not necessarily mean that more people will be paying taxes in future years. First, as people do move up and down in income, you have assumed that while some who don't now pay will pay in the future, you don't acknowledge that some who now pay income taxes will NOT pay taxes in the future.
Second, one would think or hope that when the Bush tax cuts expire, more people will be required to pay taxes. Do you seriously believe the dems will allow the cuts to expire and cause some who pay no taxes now to start paying taxes.? That is not and has never been the dems modus operandi. That keep as many as possible dependent on the gov't.
Third, my firm belief is that most of the 47% who don't pay taxes are content/satisfied with their stations in life. I saw reported that 40% of the ones who don't pay taxes also get some other form of help from the fed gov't: food stamps, assisted housing payments, Medicaid, Women's Infants and Childrens program, S-Chip, Aid to Families with Dependent Children, and many many others. Do you think someone who qualifies for all of that help and pays no taxes has any inclination/motivation to move from $7.50 or 8.50 or $10 an hour to make $12 or 15 per hour if it causes him to lose benefits and/or causes him to pay taxes?
Add to all of that the most disgusting, dishonest, and in my opinion, ILLEGAL, act of the government. Millions of those 40% who pay no fed income taxes and get one or more gov't benefits also get a BIG FAT CHECK at tax time every year from the federal gov't........excuse me...........from us............people who actually do pay income taxes. I understand that this year people who qualify can get up to more than $5,300 in NET dollars. (Our unemployment checks are taxed and social security checks are taxed, but not the checks of millions who qualify for the EITC). Also keep in mind that the EITC is only for people who have actually worked - they just happen to work in lower paying jobs. And by the way, I think even McDonald's starts out someone with no experience at about $10 an hour.
What is so wrong about the Earned Income Tax Credit? Because it is not like providing subsidized housing to people who need shelter, or food stamps to people who need to eat, or Medicaid to people who need medical care, etc.
This is a big fat check taken from taxpayers and distributed to non-taxpayers in a lump sum for that person and his family to do whatever with MY and YOUR money whatever they want. And we wonder why the so-called poor in this country own HD televisions, stereos, microwaves, computers, cell phones, etc.
Again, what motivation is there for anyone to significantly improve himself who happens to work (even at McDonald's), doesn't pay any federal income taxes, gets one and more likely several of the above listed benefits, and then, is rewarded with a big fat net check every year for doing absolutely nothing, and he can spend it on whatever he chooses.
The more I write about this crap, the more I convince myself to get away from the stress of my job of 24 years, and give the stressless lifestyle a try. But then I remember that I have had my children and they are grown, and unless I am willing to pump out some more little dependents, I won't get a whole lot of help from you fine taxpayers out there. I just talked myself into staying where I am.
Bob the Engineer| 4.21.10 @ 5:11PM
David,
I agree with you that a lot of people have little motivation to increase their nominal income if their total overall income would go down. For a family of three taking the standard deduction the 10% bracket starts after about$22,000 of income so most of the people who pay no tax do so because of tax credits. Again those tax credits will go away for a lot of people eventually.
David| 4.21.10 @ 5:42PM
Bob, are you sure about those figures? My last glance at the tax tables leads me to believe that a family of 3 could have an even higher income than $22,000 and still pay no taxes. And I believe they would also be eligible for the EITC - maybe not at that top end, but certainly $1,000 or more net dollars. We may be talking about 2 different incomes. In my mind, the $22,000 is the gross the person earned for the year. Are you using the $22,000 as the taxable figure after the dependent and standard deductions are taken?
Bob the Engineer| 4.21.10 @ 10:19PM
David,
What I meant was if you had income $52,000 then the personal exemptions and the standard deduction would reduce your taxable income to $30,000. Then you would pay 10% on roughly half of it and 15% on the rest and would owe approximately $3,750. If you were a first time home buyer you would owe no taxes for two years.
Northern Rebel| 4.21.10 @ 6:17PM
As long as we're saddled with an income tax, something I believe to be immoral, then only those who pay it should have the right to vote, with the exception of military war veterans.
We should amend the constitution to outlaw income taxes, and move to a national sales tax, but the politicos will never give that power away, until it's taken by force.
Rodman| 4.22.10 @ 7:01PM
Think for a bit about the disporportionate impact a national sales tax would have on working people who spend a majority of what they earn.
Higher incomes spend a smaller percentage of net earnings, putting more away and re-investing to earn more still.
The result is, in effect, a reverse-graduated income tax.
Add to this, the GOP dream of zero capital gains tax and the working class will be completely carying the wealthy elite on their shoulders.
But then again - that's the idea, isn't it?
David| 4.22.10 @ 10:48AM
The system is scr_wed up.
Again, the Earned Income Tax Credit is outright theft from the income taxpayers.
Yep a sales tax would do it. That is what we have in Texas. I believe it has been about 8.25% for many years.
I am also for getting rid of all of the deductions. While the home mortgage interest deduction sounds good and there may be some good arguments for it, why should renters be penalized for their choices? I suggest that people who choose to rent, but want to own 2 or 3 nice vehicles, are just as much a boon to the economy as homeowners. Cars need maintenance and repairs just like homes do, and I suspect cars keep many more people employed after the cars are purchased than homes do once the homes are purchased.
I am sick of the government arbitrarily singling out certain people for special treatment.
Sherman| 4.22.10 @ 10:55PM
What no one has mentioned is that the deductible mortgage interest is often part mortgage and part money borowed during the housing boom ( added to the mortgage) which went into cars, vacations, big screen tvs, boats and who knows what else. Now, if you are underwater in you mortgage you can get the principal reduced. So the government is paying off your toys as well.
fsdjk| 7.1.10 @ 1:24AM
beijing massage shanghai girl
guo | 7.1.10 @ 5:24AM
www.wmvconverterformac.com