Nearly half of U.S. households escape federal income tax
usatoday.com
usatoday.com
Every consumer bears the ultimate incidence of every form of taxation, as every reasonable economics textbook points out. Everyone who buys things made by business corporations pays higher costs because of corporation income tax. Everyone who makes telephone calls pays federal excise tax. Some consumers avoid smoking, but many fewer consumers avoid drinking alcohol, so consumers pay other kinds of federal excise taxes.
Import tariffs are no longer the majority of federal tax revenues, as they were in the early history of the United States, but consumers who buy imported things still pay higher prices for those things because of federal import tariffs.
There are other federal taxes and "user fees" that could be listed in further detail. Everybody pays taxes to all levels of government.
I wish there were some kind of tax on newspapers that publish doofus stories like that that waste readers' time and muddle their understanding of public policy.
http://www.taxpolicycenter.org/briefing-book/background/numb...
And that, my friends, is the crux of the problem. Simply too many Americans are no longer stakeholders in the financial well being of this country because they aren't paying. If you are pulling in a paycheck you simply need to pay something, anything, in income taxes as long as others do. If income taxes are repealed in favor of another system then that's another story.
What will happen when the Atlas shrugs?
And yet we keep hearing about how the rich get out of paying taxes.
They'll say that you're not counting payroll taxes, notably SS. They'll complain about the cap.
Then I'll point out that benefits are capped too. The reason is that SS advocates used to think that SS shouldn't be paying $500k/year to Ross Perot. They set up SS with a contributions cap because they wanted rich people to ignore it, which they won't if they're paying 15% and not getting anything in return.
I'll close by noting that the folks who hit the cap get much lower return on their "investment" than do folks who make (and contribute) less.
It does not, however, come anywhere near compensating for FICA and Medicare, which are real taxes, plain and simple, and of the worst kind: In my age group, I will never see the benefit of these dollars which they steal from me today. Anything I would have paid in federal tax is dwarfed by it. There are no deductions, no exemptions. Even if I get the paltry SSI checks when I retire, the dollar will have lost so much value that the benefit is a mere trifle compared to the taxation that "funded" it. The only good thing I can say about FICA and Medicare is that they are a flat tax, or even a regressive tax since the highest earners do not pay it on all their income.
It also does not compensate for sales taxes, nor for all the gas tax I pay, the cigar luxury tax (75% here in MN, and that's on top of the SCHIP taxes), and thousands of other hidden taxes contained in the prices of the products that I and my family consumes.
And to use this fact as an excuse to tax middle to low-income families even more - shameful.