Tuesday, April 26, 2011

Nearly Half of Americans Aren't Paying Income Taxes: Bad But Maybe Not in the Way You Suppose

It has recently exploded all over the internet that nearly half of American households do not pay income taxes.  There are enough deductions and credits for families making around $50,000 and less to avoid the income tax completely, though they still are paying federal payroll taxes, sales taxes, property taxes, and others.

While some see this as a broken tax system, I see it as a broken economy.  While some gripe that half of Americans aren't pulling their weight, I see it as nearly half of Americans are not making enough money to pay income taxes.  They live below the line where we have decided that a person is only making enough to cover basic expenses and should not bear the weight of income taxes on top of it.  Instead of trying to figure out how to get those people to start paying income taxes at their current salary, lets instead focus on how to get these people making enough money to be able to afford taxes after their basic needs are met.

If we want to broaden the tax base, and I agree that that should be one of our goals, we need to narrow the gap of income inequality.  We are more free as a nation, and have increased agency as individuals, when the wealth and income gap is narrow.  That is perhaps part of why the Lord said, "For if ye are not equal in earthly things ye cannot be equal in obtaining heavenly things."  Here is a site, called Business Insider, with all the charts you will ever need to help understand just how serious an issue this is.  Here is an example:

1 comment:

Architect said...

We would not need to shrink the federal government much to take it to a zero income tax for ALL Americans. Just go back to the first Clinton budget. Balanced budget overnight with no income tax!