Nearly half of US households escape fed income tax

I am not a fan of the progressive income tax either, but that is the system we have, so get used to it or help to get a flat tax or consumption tax to replace it.

 

Another way to look at it, Glad, is that a 'consumption' tax has already replaced federal income tax in many ways. Sales taxes, high property taxes, etc. Not based on income.

 

No worries...let's just increase taxes for the wealthy!

I have zero issues with people that make $30k per year who have families to support getting enough credits to not pay any taxes, but $50k per year? That is ridiculous, especially considering our budget deficits and insistence on the increase in federal spending. Sorry, but it just isn't fair

 

So are you for cutting taxes or not?

 

It is perfectly fair, that is the very definition of a progressive income tax. If you don't like it, work to change it, you have a strong proponent for replacing it with an intelligent consumption tax in me. Keep in mind that such a consumption tax (or even a flat tax with no exemptions or deductions) would tax the wealthy even more than they are taxed now.

 

that's going to happen regardless (increased taxes on the wealthy). I have no issue with that. I just feel that there are too many credits and the country simply cannot afford, with the way we are spending, to have 50% of households paying nothing. A consumption tax isn't a terrible idea...

 

These numbers alone don't tell the whole story.

Some numbers I found for 2007:
http://www.taxfoundation.org/news/show/250.html

The top 10% earners paid 71% of the tax but they also have 48% of the AGI (adjusted gross income).

What I believe, they also have a lot of deductions which bring their AGI to a low percentage.
I'd like to see a raw income numbers before adjustment, they might well have a whole lot more.

 

The link I have above shows:
In 2007, the bottom 50% had 12% of the AGI and paid 2.8% of the tax. I also bet you that they pay a higher percentage of the sale tax already since most if not all of their income is spent.

 

I'm an Obama supporter and have little problem with rolling back the Bush tax cuts for the wealthy, as I feel that they made out like bandits compared to others in the last decade. The gap between the rich and the poor in this country continues to widen at an unacceptable rate.

That being said, I have some concerns that we may be getting carried away in trying to lower taxes for lower and middle classes. I hate that politicians are so obsessed with looking like they "cut taxes" that they fail to acknowledge the budgetary realities of the government. You can't just keep cutting taxes for groups or all people endlessly. At some point, you have to pay the piper. Unfortunately, the political game makes every candidate promise to "not raise taxes" sometime during the campaign, making it nearly impossible to even entertain the possibility of even reasonable tax incraeses.

Unless we decide to drastically cut spending on non-discretionary spending (which nobody seems to have the political will to do) or change our entire tax system to something like the flat tax (which sounds appealing on the surface), I think we are probably better off rolling back almost all of the Bush tax cuts. This way, we can bring some more balance back to our budget, start paying off some of our debt, and spread the pain around a little bit. I consider myself a relatively liberal, but we can't keep expecting to make a small minority (in this case, the rich) pay for every governmental program. Everybody (rich, middle class, and poor) seems to be only looking out for themselves and wanting things for free or at least subsidized. At some point, we all have to share in the pain a little.

 

There's even more to the story.

If you look at wealth rather than income, the richest have a greater share of the country's wealth than the share of taxes they pay.

This was the first link I found with that kind of info:
http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

 

Why not. You make so much you think you would do better?

You identify with the very rich who push the abolishment of the progressive nature of the tax?

 

Are you sure about that?

The little I've read about the subject indicates a flat tax or a simple consumption tax would be regressive.

 

I think we can all agree that simplicity is beauty in the tax system.

And our system ain't pretty.

 

i think its stupid to not count payroll taxes when having discussions regarding federal taxes. especially since there is no lock box anyway. we use payroll taxes to fund current expenditures. its arbitrary to exclude payroll taxes but discuss only income taxes.

and the poor and the middle class pay a lot bigger percentage of their income in these taxes than rich people.

 

Andy, looks like you bought into the myth.

Our income taxation system is OSTENSIBLY progressive but when you factor in the regressive taxes that we have, like social security, state & local, low dividend & cap gains, it gets a lot more regressive.

Here's a great post from fivethirtyeight with some excellent graphs comparing income distribution pre- and post- tax, to long to post here, but here's the takeaway, the US has by far the least progressive income tax of any industrialized nation, and our redistributive effects are tiny (and can't keep up over time with the accelerating Gini # anyway - very obvious.

http://www.fivethirtyeight.com/2010/04/jonah-goldberg-anti-maldistributionist.html

 

Don't worry Sam, Obama will take care of that. Tax increases are coming for the top bracket on income, cap gains, medicare tax, new health care reform tax.

At least its not at 70%, yet.

 

And how many of those nations have a better standard of living than us?

 

Oh here we go with poor deepblue he cant' afford his day care - wah wah wah - suck it up bro. We've been over this last year and your arguments are kind of an embarassment.

Quite of few them actually. Norway, Switzerland, Luxembourg, Canada, Australia etc - a lot of these countries have higher per capita income (the one that is most distortional in favor of the US), higher median household income, lower crime, better health etc. The US generally ranks only in the top 20 or so of composite human development indices.

 

No, I am fully aware of the regressive nature of all the other taxes that we have to pay. This knowledge is the reason that I am a proponent of changing the way we tax people in order to reward recycling products and saving money. I support a smart consumption tax that would keep the bulk of the tax burden on the rich and would give people incentives to save money and ways to minimize their tax burden if they have a problem with being taxed.