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.
