How can people claim they are taxed to death when 47% of households will pay no Federal Income Tax? According to the non-partisan Tax Policy Center, nearly 71 million households will pay no Federal Income Tax during 2009. Now, this isn’t to say that these same household don’t pay sales, property tax [renters pay a portion of this through their rent], various forms of state taxes, or payroll taxes. But for all this uproar and angst about the heavy tax burden that so many people are carrying on about, are people really overburdened with taxes or are the ones that are paying the lion share of the taxes overburdened?
There are several schools of thought out there about the most equitable way to share the tax burden, or responsibility. One group wants to eliminate the IRS all together and replace all Federal Taxes with a national consumption tax (a.k.a. Fair Tax) at a 23% tax rate. Then there’s the Steven Forbes “Flat Tax” proposal which would cap all Federal Income Taxes at a certain percentage (say 10% to make the math easy to figure out). This would mean that everyone, over all income levels, would pay the same proportional income tax rate. Then there’s the Progressive Tax system that the United States currently uses, where over the years the tax rates have increased and decreased with the political winds of the nation. Also, our Federal “Progressive Income Tax” system is honeycombed with loopholes, exemptions, and tax credits which shifted the larger tax burden-responsibility to middle income earners.
Keep in mind, this discussion is only about personal income and not corporate taxes, which is a whole other debate. Do we base our tax codes off of a person’s ability to pay or disregard ability to pay and base it off of everyone pays no matter what your individual income level? There is no question that there needs to be massive tax reform and we need to tackle the eternal question again - what is the most fair and equitable tax system to fund the Federal Government. But, I find it disingenuous when a group of people claims they are Taxed Enough Already when most of them will pay little or nothing in Federal Income Tax. So, let’s be real honest here and admit that you don’t want to pay any taxes and expect the country to run and function at the same level or better by defunding all forms of government. We need tax reform, but not the kind that TEA Baggers are pushing.
Thursday, October 1, 2009
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