It’s April 15, and as I remind my conservative friends, it is a privilege to pay taxes in this country to support our republic and the American way of life even though there’s clearly waste and fraud in government. It depends on a engaged citizenry to weed out fraud and misused tax dollars wherever possible. And even though, what some would consider waste, others consider a solid investment (public education is a great example).
My most memorable argument was with a neighbor who insisted we should tax food, which I pointed out would hurt the poorest among us. He was also a Don Wagner supporter and Wagner was attending the same elementary school event where this argument came up, and I suggested he go right to the Assemblyman and ask him to craft a bill on that idea to see how well it would go over.
Then, there’s this excellent story on Vox.com today about taxes. From the story:
Typically when politicians fight about taxes, they fight about the income tax. That is to say, they fight about the tax that rich people hate — not the taxes poor people hate.
This leads to a really perverse dynamic, wherein the taxes the privileged pay are worthy of attention and the ones the poor pay are ignored. It paints a picture where the government is being supported on the backs of the wealthy, and the poor and middle class are free-riding. It leads to plans for various kinds of tax cuts and tax reforms that matter massively for the rich and very little for the poor.
The issue here is the ceaseless focus on the federal income tax. A report from the Joint Committee on Taxation found that most Americans (65.4 percent of filers) pay more in payroll taxes than income taxes. It’s only once you start looking at folks making over $200,000 a year that most people are paying more in income taxes.
The numbers here are surprising if you think about tax systems as something people only pay into, rather than get anything out of. But because so much of US social policy is structured as tax credits, a lot of people get more money back from income taxes than they put in. The JCT finds that people making under $40,000 get $81.1 billion more back from the income tax system than they put in — largely because of refundable credits like the Earned Income Tax Credit and the Child Tax Credit.
But that same group pays $121.5 billion in payroll taxes. They still, on net, contribute billions to the federal government every year. Of course, this doesn’t even count the sizable contribution of the poor and middle class in state and local taxes, which are actually higher for the poor than they are for the rich.
This isn’t just true for the poor — it’s also true for the middle class. Filers making between $40,000 and $50,000 pay almost 12 times as much in payroll taxes as in income taxes; filers making between $50,000 and $75,000 pay more than twice as much.
“.. there’s clearly waste and fraud in government.”
Reduce the size of government and you will reduce the amount of waste and fraud.
Dan, top earners were the main target of recent tax increases under President Obama, but the federal income tax system is already highly progressive. The top 10 percent of income earners paid 68 percent of all federal income taxes in 2011 (the latest year available), though they earned 45 percent of all income. The bottom 50 percent paid 3 percent of income taxes, but earned 12 percent of income.
While not in the top 10% bracket, I do pay my fair share and have no problems with that. What I do have a problem with is government deficit spending and running up the National Debt. This is the fault of both political parties and one is as bad as the other, just with different priorities. If you or I ran our family budget the way Congress runs the country’s, we both would be living on the streets.
I support a Balance Budget Amendment requiring revenue and expenditures to match right now and not at some mythical point in the future. We both know that will never happen. One day, the debt will cause a collapse of the house of cards and we will all be in big trouble.