The Truth About Taxes
Published on - August 31st, 2009 (Modified on - January 15th, 2012) (by J.D. Roth) Note: Although I try to keep GRS a politics-free zone, today’s topic is inherently political. I’ve stayed as neutral as possible in the article, but I know that there’ll be some political discussion in the comments. Please keep conversation civil, as always.
Because I was frustrated with my own ignorance about the U.S. federal budget and our tax system, I recently spent twelve hours researching a variety of tax topics. From my research came two articles: last week’s short guide to the federal budget and today’s post, which answers some of my personal questions about taxes.
Last week, we tried to take a few small steps toward understanding the federal budget. We looked at where the U.S. government spends its money. But where does it actually find the cash to spend?
Of the $2.333 Trillion dollars in U.S. government receipts:
- $1050 Billion (45.0%) comes from Individual Income Taxes
- $939 Billion (40.2%) comes from Social Insurance/Retirement Receipts
- $221 Billion (9.5%) comes from Corporate Income Taxes
- $76 Billion (3.3%) comes from Excise Taxes
- $20 Billion (0.9%) comes from Estate and Gift Taxes
- $28 Billion (1.2%) comes from Federal Reserve Deposits
- $16 Billion (0.7%) comes from other miscellaneous sources
As you can see, nearly half of government receipts come from individual
income taxes. Naturally, taxes are a hot-button issue. They have been since this nation was founded. (To be fair, though, the driving force then was “taxation without representation”. Modern complaints are against taxes in principle, I think.)
During my research, several questions about taxes occurred to me. In today’s article, I’ll do my best to share the answers I found.
Is it true that X% of Americans pay no federal income tax?
In a recent discussion about taxes at The Simple Dollar, Kevin wrote:
Roughly half of all Americans don’t pay any income tax at all. I’m sure those folks feel the current tax levels are just fine and dandy, no complaints. Those of us who DO pay taxes, however, are buckling under the weight.
Kevin’s comment left me wondering: Are there really that many Americans who don’t pay income tax? And are those of us who do pay income tax really “buckling under the weight”?
I was unable to locate government data on people who don’t pay taxes. Instead, I found a March 2006 article from the Tax Foundation, a nonpartisan tax research group based in Washington, D.C., which calculated that 43.4 million tax returns resulted in zero (or negative) tax liability. Another 15 million households file no tax return at all. Based on these numbers, the article concludes:
Roughly 121 million Americans — or 41 percent of the U.S. population — will be completely outside the federal income tax system in 2006. This total includes those who pay no tax, and those who pay some tax upfront and are later refunded the full amount of the tax paid or more.
So, according to this study, 41% of the U.S. population lives outside the federal income tax system, and 32% of U.S. tax returns resulted in zero or negative liability in 2006.
This 32% number is relatively high. Previous peaks were at 28% in 1950 and 26% in 1978. Lows were 16% in 1968 and 18% in 1984. In general, the percentage of tax returns with no tax liability is between 20% and 25%.
The Tax Foundation sees these numbers as a call to “broaden the tax base”, but admit that nonpayers tend to be younger and earn lower incomes. (Here’s a past GRS article about people who live on low incomes in order to avoid paying taxes.)
If there are a large number of non-payers, does that mean the rest of us are “buckling under the burden”? Let’s look at more numbers.
How do current income tax rates compare with those from the past?
In the United States, the federal individual income tax went into effect in 1913. The top marginal rate was 7% — and that’s if you earned over half a million dollars. (According to the Bureau of Labor Statistics inflation calculator, that’s equivalent to an income of nearly $11,000,000 today!)
The Tax Foundation has published a handy viewer that allows users to explore U.S. federal individual income tax rates from 1913 to 2009. (They offer PDF and Excel versions of the data, too.)
Using their data, I created a graph that shows the history of U.S. marginal tax rates. This graph shows the lowest marginal rate in red and the highest marginal rate in blue. At any one time there are many other rates in between. (The tax tables are simple right now, believe it or not.)
Based on this information, it would be easy to conclude that tax rates are low in the United States right now relative to past history. While I believe this is probably true, it’s impossible to know this for sure without copious data regarding average incomes and effective tax rates. Still, the answer to the next question provides a bit of a response.
What tax rate does the average person pay?
Because the United States has a system of progressive taxation, it’s difficult to know exactly how much each person pays for income tax. We all know our marginal tax rates — the rate at which the last dollar of our income is taxed — but our effective tax rates (or average tax rates) fluctuate from year to year.
I don’t know a source for comprehensive data on this question. The IRS does provide some statistics (and may, in fact, provide all the data one needs), and other parties have taken the time to collate some of it. For example, the Tax Foundation has produced several pages of summary tables. From this info, I built the following chart:
This chart shows the average federal income tax rates over time for a variety of income levels. The red line shows the average tax rate from 1980 to 2007 for the top 1% of the population based on Adjusted Gross Income (AGI). The black lines shows the top 10% of earners based on AGI. The blue line shows the overall average federal income tax rate for all U.S. citizens.
In 1980, Americans paid 15.31% of their AGI in income taxes. In 1990, that number was 12.95%. In 2000, it was 15.26%. In 2007 — the last year for which there is data — that number was 12.68%. Based on this, I’d say that the average American has an effective federal income tax rate of 13-15%. (And top earners pay about 22%.)
Note that these numbers don’t exactly match the statistics for effective tax rates that are available from the Congressional Budget Office. (Which show, for example, an effective individual income tax rate of 11.7% in 1980, 10.1% in 1990, 11.8% in 2000, and 9.1% in 2006.) I’m almost certain it’s a matter of methodology, but I don’t have the time to dig in and discover the details. That last link, by the way, contains loads of great data, some of which is analyzed in this piece at The New York Times.
So are Americans “buckling under the burden” of taxes? I’m not convinced. Taxes seem to be moderately low right now based on our past history. But maybe we pay more than the rest of the world? Let’s find out.
How does the U.S. tax burden compare with that of other countries?
Though I was unable to locate comprehensive statistics for every country in the wold, the Organization for Economic Co-operation and Development (OECD) does collect data on its 30 member nations.
In fact, you can view 18 years of OECD tax data all on one page. These numbers represent each country’s tax revenue as a percentage of GDP (gross domestic product). These figures include all taxes: federal, state, and local. (Note that you can export the data from this page in a variety of formats! Fun for statsgeeks and taxgeeks alike.) Here’s a graph of the data from 2006, the most recent year for which complete stats are available:
In 2006, tax revenue in the United States was 28.0% of the gross domestic product. Put another way, the average American paid 28% of her income to taxes (state, federal, and local). Of the 30 OECD member countries, only four had lower taxes (Japan, Korea, Turkey, and Mexico). The highest tax burdens were in Denmark and Sweden, where tax revenue was 49.1% of the GDP. The lowest tax burden (by far!) was in Mexico, where tax revenue was only 20.6% of GDP.
These numbers indicate that relative to other countries, the United States has a low tax burden.
How much is this all costing me?
Social Security, Medicare, Medicaid. Food Stamps, Unemployment Compensation. The Army, the Navy, the Air Force, the Marines. And the interstate highway to grandmother’s house. How much does this all cost you?
Well, Jess Bachman (the Death and Taxes poster guy) has done the calculations for you:
The average U.S. taxpayer has an income of $43,650. For every billion dollars of government spending, this taxpayer is on the hook for five bucks. These numbers scale up or down depending on your income. If you earn $100,000 a year, for example, you pay $15 of taxes for every billion dollars the government spends. Ouch.
Conclusion
Based on my research, U.S. taxes actually seem relatively low, both historically and in relation to other countries. I am not arguing that we should have higher taxes. Nor am I arguing we should have lower taxes. I’m just relaying the facts.
In fact, I don’t really have a purpose behind my research other than education. With all of the recent national discussion about taxes, I felt woefully under-informed on the subject. When listening to people argue about taxes, it’s difficult to know whom to believe. I wanted to do my own research and then share the results with you.
For more exciting information about taxes, check out the following:
- Internal Revenue Service: Tax statistics
- U.S. Treasury: A history of the U.S. tax system
- FedStats provides easy access to tons of statistics collated by the U.S. government.
- Tax Foundation: State and local tax burdens (by year) and State and local tax burdens (by state)
- Congressional Budget Office: Data on the distribution of federal taxes and household income (with thanks to Dan, a commenter at The Simple Dollar, who shared this info with me)
After all that, how would I balance the budget if I were dictator of the United States? Easy. I’d cut all programs across the board by 10% while increasing taxes on everyone by 10%. Yeah, that sucks, and every citizen of the U.S. would be unhappy. But you know what? If I were dictator, I wouldn’t care. I’d be sitting in a cozy room reading comic books while eating chocolate chip cookies with milk.
Update #1: As with last week’s post, I’ll post updates here at the end of the article as readers offer clarifications or important points. For example, although I focused exclusively on federal income tax for individuals in this article, several readers noted that this is not our only federal tax in the United States. Linear Girl provides a succinct summary: “The second largest source of funds for the federal government is payroll tax, aka Social Security and Medicare. All employed people who aren’t paying any income tax do pay payroll tax of 7.65% on all earned income (their employers also pay and additional 7.65%; if you are your own employer you pay both sides). “ So, if you want to include the complete federal tax burden in the above conversation, you need to add 7.65% to all figures — 15.30% if you’re self-employed.
Update #2: For those requesting a second part to this article about how this money is spent…that was actually the first part, last Monday’s short guide to understanding the federal budget.
Graphs courtesy of me. Images courtesy of Jess Bachman, creator of the Death and Taxes poster. Bachman is generously offering a deal for GRS readers. Order two or more posters and get 50% off when you use the code ‘slowly’ at checkout. “It’s basically buy-one, get-one-free,” Bachman says. Thanks, Jess!
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This article is about Economics, Taxes
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how to get smaller government:
for every dollar of funding, 1.1 has to be taken out (more is better). In other words, new budget items are paid by removing old unused budget.
for every page of new (tax) law congress passes, 2 have to be taken out.
Eventually this would simplify our laws and balance the budget. Unfortunately this discussion has missed one reason tax laws are so complex. Gvt incents folks to do things they normally wouldn’t want to do with tax law, invest in homes, buy economical cars, etc.
I really like the fair tax, flat with a rebate of something over the poverty level. The only problem with this is then the government would have to tell us directly how much they are taking (tax rate this year is $.22 , or $.37) and we can’t have that can we…
Going into politics seems to be the only solution, but it’s so dirty…
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@ Gwendally
You are probably correct about the true level of payroll taxes. Some economists do figure that the “employer’s” share is “baked in the cake” when determining base compensation.
There have been other examples of this notion in recent history. Several years ago, many home buyers received a retroactive tax write-off due to “seller paid points” in real estate transactions. The idea behind this deduction was that sellers paid the points, then added the cost of points back into the price of the home…passing the points back to the buyer.
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Dan (201)–You’re in danger of making TOO MUCH sense here!
I had a professor in college, a truly brilliant one, who said “The purpose of government is not to solve problems but to create them. Without problems there’d be no need for government”.
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@Kevin at #200: I agree that we have a ton of hidden taxes, but I was limiting myself to INCOME taxes for the purposes of this discussion, which is already pretty unwieldy!
There are actually FIVE sorts of taxes. You’ll recognize them as I say them, you’ve met them all in your life! I’m writing them in roughly historical order of how long they’ve been with us.
1.) Property tax: this includes real property, of course, but there is also a tax on personal property. Some states tax it annually on cars or trailers. Businesses get taxed by the town or city on personal property that they have in service. The idea here is that it is the PROPERTY itself that has a call on services like fire departments.
2.) Transfer tax: this is a little known one, the most common of which is estate tax. This is when you come to the end of something and the State takes a chunk of what’s left. I see transfer taxes when property is sold sometimes, but the gift and estate system – all part of the same transfer tax – is what I see most often.
3.) Sales tax is extremely ancient and very well understood, but its sibling “use tax” is hardly known about at all, although the States would dearly love you to start forking it over (and are coming after it with internet subpoenas as I write.) “Use tax” is when you have not paid sales tax on something that you bring into your state to use. You most commonly see it when you register a car that was bought out of state. There’s a common misperception that you don’t have to pay sales tax if you buy things in, say, New Hampshire. That’s actually true if you USE it in New Hampshire, but if you bring it back to your home state to use and your home state has a sales tax, now you have to ante up the sales tax yourself in the form of “Use” tax. This is also the same tax that happens if you’re someone who has an inventory, say, paper towels. You don’t pay sales tax on inventory when you buy it, but if someone drops a jar of pickles and you take a roll of paper towels off the shelf to use, you are now the final end consumer and owe the Use Tax on it. This law has been on the books just about forever, and now the States are going after it to raise money by collecting a tax already legal rather than trying to create new ones.
4.) Excise tax: this is a tax that is based on usage. Water and sewer fees are an example of this, as are taxes added to gas. A few years back a lawsuit was brought against a telephone excise tax on long distance charges that had been put in place to pay for the Spanish Civil War. It was supposed to be based on usage – that’s the definition of an excise tax – but people had bought flat rate long distance packages and it was no longer being applied legally. Everyone got $30 back on their 2005 tax return as a result of this final repeal of a tax put into service back at the turn of the last century.
5.) The fifth kind is income tax, and that is historically the newest. Until the industrial revolution most people didn’t have an income that could be taxed. It’s still problematic to tax income from people living in the “underground” economy like farmers and loggers and anyone who uses much of their own inventory and/or barters for goods. People who are wage earners think everyone earns a living like they do, but it’s really an aberration in the history of mankind that so many are in such an unusual servitude to another master.
I hope you enjoyed this history lesson. Taxes are a pretty complex topic but it gets easier if you can hold these five kinds separate in your head.
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Gwendally–On your point #5, income taxes were a major reason for the required switch to paper money as a medium of exchange. You can’t tax barter, so they moved the economy to paper money.
The fed income tax was enacted in 1913, and the paper money only system was put into full affect in 1933, when Federal Reserve Notes (aka, “the dollar”) was declared sole legal tender.
Up until that time, practically anything of value could be used for money as part of the barter system. But all of that is much harder to collect taxes on.
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It should also be noted that taxes provide more than government services, they are used as means to implement policy (i.e. rebates for hybrid vehicles) and as an economic development tool (EIC). The idea behind the EIC is that those who live on a very limited income will spend their money quickly, thus stimulating the economy. The mortgage tax credit is the largest housing subsidy provided by the US government, directly benefiting middle class families. Just by two cents
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@Kristine #206: not to beat a dead horse, but EIC was actually meant to offset that hidden payroll tax; it phases in alongside social security and medicare taxes.
It’s a lifesaver for poor self-employed people like daycare workers because it covers the self-employment tax that lands like a bomb on their income tax return.
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@Kevin #205: you are slightly incorrect. Barter is perfectly legal (assuming you report the value and pay taxes on that income as well.)
The point about Federal Reserve Notes being legal tender is that everyone is compelled to accept them (where people aren’t compelled to accept barter) and you MUST use them to pay Federal debts (that is, taxes).
Being compelled to accept Federal Reserve Notes in payment of a debt we hold is going to stick in our craw if we ever get hyperinflation.
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One of the reasons that the income tax was adopted was the wealth disparity that existed in the late 1800s. At the time, most working class folks labored 50-60 hours per week just to scrape by while wealthy industrialists prospered financially. Since federal taxes at the time were collected through import duties and excises, the working poor (the majority of people at the time) carried most of the tax burden.
Populist politicians saw an income tax as a means of shifting the tax burden off of the backs of the working classes.
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Adam,
The point is not that you don’t deserve a fair wage, but rather that as government continues to expand, how does that get paid?
Over the past three years, for example, my city’s teachers received a 6% pay increase each year. Over that time, my base salary (and everyone else in my company) was capped at a maximum of 3.2 to 3.5%. This year, in cost cutting measures, my bonus program was eliminated costing me $12k+ a year and the company announced that next year’s raises are deferred.
Where is the money coming from to fund the teacher’s raises? Certainly not from additional tax revenue from me and my co-workers apparently without increasing the tax rate. Oh, yes, that’s what Massachusetts just did. They raised the sales tax 25%.
The math doesn’t add up. Political hacks continue to vote increases despite the economic realities. And that additional tax burden DOES have a direct impact on spending and growth in our economy. Less consumer spending means more cuts in business, more layoffs, etc. It is a vicious downward spiral.
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J.D. – great article. you certainly did your homework here! i haven’t seen a more comprehensive breakdown of taxes ANYWHERE.
just a quick 2¢ from me – are taxes breaking us? not me & i’m an average income earner. what is breaking me? insurance. if i calculate what my employer pays for my health insurance, plus what i pay, it works out to about 27% of my AGI. that actually exceeds my income tax burden.
i don’t want to threadjack – i’m not trying to turn this into a HC debate. just wanted to pass that info along. i can afford my taxes. it’s the insurance that’s breaking my back.
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@Rich, 211: The average spending per person in the United States (including children) is $8000 each now (not per family, EACH.) Source: http://www.cms.hhs.gov/NationalHealthExpendData/downloads/proj2008.pdf
It costs as much as food or shelter. But if you think about it, we VALUE it as much as food or shelter. It’s the main thing we want each day when we wake up: to not be ill or die.
Right now we pay health care costs in a weird way with insurance in the middle (with their profits) and it’s a pretty flat tax on the 40% or so who pay for it. (The rest either get it through the government or are uninsured.) There would be a lot of benefits from adding it to the graduated income tax system, but consider, please, that if you’re in the middle income tiers your share of the health care costs would still be pretty much what it is now. The poor might get it subsidized, the rich might have to pay more, but you in the middle will still be bearing at least your OWN burden. $8000/person. (To be fair, most of that skews to the >65. Below 65 it’s about $4K/person in average spending. But, listen, you PLAN on being over 65, right? Shouldn’t you pay more now while you’re working because you won’t be able to cover it then when you’re old and sick?)
The principle reason health care costs so much is that we are USING so much.
My suggestion is to think of it like food or shelter. It’s what you WANT to spend your money on, as unhappy as you are to see it go.
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Skoobie (210)–You’re getting to the heart of why so many of us have less than positive feelings about taxes, public spending and government in general. It’s tough to watch as the economy contracts and our incomes fall, while government spending and paychecks continue to increase.
What ever the intentions of the political leadership, the end result looks a lot like indifference.
It’s not so much that we object to government or to any particular tax or spending program, but rather the inflexibility and immunity of the system. While we–who pay for government–are forced to tighten our belts to adjust to restricted circumstances, they go on as if it’s business as usual. I think that has to disturb anyone.
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Teenagers aren’t contributing much to the 41%, it’s mostly married folks. When I got married and had twins last year, my Federal Tax bill dropped from about $4000 to a couple hundred, which the stimulus payment took care of–so no Fed Inc Taxes! (Yeah, yeah, still paid SS, but still saved $4000). For 2009, I can make up to 39,333 and pay no Fed Income Taxes (4 * 3650 exemption, 11,400 std ded, and 13333 shielded by $2K child tax credit).
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“People are acting like roads simply wouldn’t be built not maintained unless by a government. But here’s the thing… Roads BENEFIT someone. In fact, they benefit multiple people, for various reasons. So, here’s a question I propose to all of you: Do you really think that new Walmart being built in that new suburb would NOT build a road to itself if the government could not or would not?”
Of course Walmert wouldn’t. There is no way they could make a return on that investment. They couldn’t even afford the right-of-way to build that road if they had willing sellers. You are talking about a 20 mile long driveway.
But that is a pretty good demonstration of the transparent absurdity of libertarian Randian “logic”.
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Ross (215)–I think you’re missing something on your interpretation. What did the Walmarts of the world do before goverment took over building roads? They located in the cities and towns where the people lived. There were no need for highways.
From the 1930s on, the government launched aggressive highway building programs, including the interstate highway system, and now WalMart, et al, are locating in exurban strip malls miles from population centers to take advantage of the “growth” (actually relocation of people) coming about as a result of the new highways.
And the cities? Empty and gutted. Now more money is needed to help pay for the downtrodden in these places who couldn’t afford to follow Walmart and the herd out to the exurbs. And energy efficiency? Gone.
The tax and spend system we have is far from perfect, and NEEDS to be viewed in a critcal manner.
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“Unfortunately, they’re all dead. But then again, you’re not asking us to pay them back … you’re trying to indicate that we owe society a little kickback,”
No. I am indicating that you are claiming a lot of what those dead people created as your own and not paying for it. You are in fact stealing it, not producing it. Society isn’t asking for a “kick-back”, its not even asking you to pay your fair share. It is just asking you to pay a little something for what you use that you had no hand in creating.
I once cooked dinner for some friends and my father ate the left overs. I complained that “I paid for that food with my own money.” He pointed out that he paid for the stove, the pans, the refrigerator, the kitchen equipment, the dishes and the table it was eaten on. Not to mention a half dozen ingredients like salt and sugar that I took from the pantry.
The idea that what’s mine is mine, what’s yours is ours has been popular for a very long time.
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“what did the Walmarts of the world do before goverment took over building roads?”
You mean before civilization? The Roman government built roads that are still used in Britain. When was this fantasy world when roads were built by Walmart? Those city streets were built by government too.
Is ALL government spending good? No, like any large organization, there is plenty of waste, fraud and abuse in government. But reducing government spending doesn’t eliminate, or often even reduce, waste, fraud and abuse. Those aren’t items in the budget. It doesn’t make government any more efficient. In fact, it often increases inefficiencies. Government overhead remains fixed, what gets cut are services.
I managed condominiums for a while with large amounts of common space, including local streets. Every one of them had a governing body. If you didn’t like their decisions, you were free to vote them out or leave.
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I’m sorry, I thought we were talking about America, not ancient Rome. Most major road here developed from the natural flow of people and commerce, often over existing Native American trails. They weren’t built by government, certainly not at the federal level.
You haven’t commented on the rest of what I wrote, that is the majority of it. Any thoughts?
BTW, the Romans built those roads mostly so they could move and supply their armies for conquest at the frontiers. That commerce developed as a result was an unintended consequence.
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@Ross(217)
Please share with me what I use that I had no hand in either creating, or paying for privately. And to whom should I pay this usage fee? And for how long must I pay it? At what point is my debt satisfied? And at what point can I finally claim that I am no longer a “stealing” these things.
What’s most disturbing about your philosophy is that it ends up trapping us all (whether we want it or not) in an endless cycle of:
I “steal” these goods and services –> I pay back into the system –> which creates more goods and services —> which people take advantage of (steal) –> obligating them into paying back into the system –> repeat, ad infinitum.
It’s a web of dependence that, I presume, we can never escape.
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“I can make up to 39,333 and pay no Fed Income Taxes (4 * 3650 exemption, 11,400 std ded, and 13333 shielded by $2K child tax credit).”
You are talking about a household income of less than $10000 per person, You and your employer will still pay close to $6000 in social security taxes. A millionaire who had a 4% return on their taxed investments would pay nothing at all in your circumstances.
There is no doubt, that the current tax system benefits families with children whether they are rich or poor. And the benefit is obviously greater if you are rich since your marginal tax bracket is higher.
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“At what point is my debt satisfied? ”
When you stop using it. Usually that is known as dying.
“Please share with me what I use that I had no hand in either creating, or paying for privately.”
The invention of the wheel and the discovery and taming of fire for starters. The list is really pretty endless.
“It’s a web of dependence that, I presume, we can never escape.”
That’s right. Your life and wealth depends on other people and the civilization we have created. You definitely have an escape and you eventually will take it whether you want to or not.
But in the mean time, if you don’t want to pay taxes here – move somewhere else. Its a free country and you are free to leave.
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“Most major road here developed from the natural flow of people and commerce”
No, they didn’t. Not unless you think a grid of right angles is “natural”.
“You haven’t commented on the rest of what I wrote”
Yes, I did comment on it. Whether government spending is good or wise is irrelevant to how we pay for it. I would agree there has been and continues to be a lot of unwise government spending on roads. That has made some people very rich. They should pay taxes.
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@Ross(222):
Fire was not CREATED. It was DISCOVERED. You cannot “create” a new form of energy. (You can create a new source for a form of energy, but not the form of energy itself.)
Otherwise, I acknowledge what basically amounts to the idea of societal knowledge. That is, society as a whole has a set of knowledge, which is passed from generation to generation: The accumulation of past discoveries and inventions. I reject tying this to paying taxes, though. Yes, as a member of society, I have access to a share of this knowledge. I repay this by being a productive member of society, by way of implementing said knowledge to create goods and services, or by increasing the bounds of societal knowledge itself.
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I wish the U.S. would have indexed transfer taxes several years ago to inflation.
Or only taxed cash and cash-equivalents (not illiquid assets used by the business)
Our very capital-heavy business (millions in land, equipment) will have no trouble hitting the estate tax exemption even if it remains at its current level.
We will probably have to cut payroll significantly to service what is essentially a flat 45% tax (above the exemption) when the current owner dies.
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J.D. – You said, “Modern complaints are against taxes in principle, I think.”
I disagree. There has possibly been no other time in our history where there has been a greater disconnect between the average American and their “representation.” And that is what people are so ticked about!”
While single-income families like mine (who choose to forgo a second income so our children can have a parent in the home) struggle to provide the basics and the things our children need to grow and thrive, the political elite continue to have: their own special pension system, their own special health-care system (which protects them from any of the onerous regs in the currently proposed health plan) – they are totally disconnected from the way most people have to live their lives. Taxation WITH representation – what a joke!
No, people like me are fed up with the elitist attitude that says, “we know what’s best for you, your kids, your grandkids, ad infinitum – so just do what we say and shut up.”
Additionally, the only reason taxes are as low as they are is because of the Bush tax cuts which sunset next year. With the rates of unemployment and all the other problems in the economoy, things are just going to get that much worse when families start to have to pony up even more of their hard-earned dollars.
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My problem with the tax system isn’t the tax rate. My problem is that the IRS is a weapon and the elite get a pass,
Getting an IRS audit is up there with public speaking, death and the dentist in terms of fear produced. Is that really a good thing?
I mean, come on, doesn’t any one in the current administration pay their taxes until they went pubic, and I also notice that they didn’t get any penalties. Joe the Plumber didn’t get the same courtesy. Do you think you would get a pass?
I don’t mind paying taxes in general, it’s the fact that the social programs never get any cuts or at best a reduction in the amount of increase, which is talked up as a cut in the media. While actual critical services police, fire, military, &etc experience actual cuts. I can see thru the game they are playing and it is angering to me.
I also know that those stimulus checks are just an attempt to bribe me with my own money. How stupid do they think I am?
That’s what it is, I am sick and tired of the games. I just want them to stop it with the stupid games.
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Here’s some much more recent data, it turns out my original estimate was much closer than JD’s:
“In 2009, roughly 47% of households, or 71 million, will not owe any federal income tax, according to estimates by the nonpartisan Tax Policy Center.”
http://money.cnn.com/2009/09/30/pf/taxes/who_pays_taxes/index.htm?postversion=2009093012
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What this fails to take into account is capital gains income. Wage earners are not the entire picture here. If you look at only wage earners, the top does seem to have a burden, if you include capital gains income, this percentage drops dramatically.
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