"We have 50 percent of people who are getting something for nothing,..."
This is just wrong: "Nearly Half of US Households Escape Fed Income Tax":
It's no wonder so many are dependent on the government. If we have an income tax, it's important that all citizens have some skin in the game.
The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.
"We have 50 percent of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.
It's no wonder so many are dependent on the government. If we have an income tax, it's important that all citizens have some skin in the game.
posted by Helen at 7:53 AM
40 Comments:
@Helen: "It's no wonder so many are dependent on the government. If we have an income tax, it's important that all citizens have some skin in the game."
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Yup. We've created an ever growing constituency who are always for more spending because someone pays for them to have more.
P.S. That's why I prefer a sales tax... everyone sees the green leaving all the time. When they go to buy a $3 cheap value meal and it rings up at $4 or $5, they'll see what's happening. With the income tax, it's largely hidden if there at all.
That's why we should **replace** the income tax with a sales tax or a VAT. The main advantage of the latter is that you can tax the working class without them even having a good idea how much they're paying which, combined with their general electoral apathy, puts the system more in the middle class' favor.
There's also an "underground" economy, and lots of people are working under the table.
Any business that involves cash payments is a business that most likely does not declare all of the income. The income tax is VERY discriminatory, because some occupational groups have to pay the full amount (if they work for a company or issue invoices to people), while other occupational groups pay nothing because they only declare a minimal amount of income (no paper trail, no way of getting caught).
Not to worry, at some point it'll all come crashing down.
Of course, when it does reach that point, it'll really suck as we discover just how thin the veneer of civilized behaviour really is.
There are all sorts of ways to get out of paying income tax. Some states don't require residents that are active military to pay state income tax. If you earn less than a certain amount then you can take advantage of the Earn Income Credit and get a payment from the federal government just for being you. Those that work for the railroad get a special tax deal. Some people have enough legitimate deductions to eliminate paying income taxes. I met a public school teacher a couple of days ago that takes a $5000 deduction for school supplies she supposedly purchases herself (Apparently, many teachers now say they buy $5K worth of school supplies out of pocket). People have small businesses that they operate at a loss. You can take a loss the second home you sell at less than what you paid. You can write off what you lose in a fire, or theft or what fell out of your pocket due to a hole. You can make tax deductible contributions to your favorite charity. You can join the local volunteer fire department and get a HUGE deduction in some states. If you have a corporation you can incorporate in a state that doesn't tax corporations. May I suggest Delaware? It's a big game.
A lot of people take advantage of these legitimate deductions although they may not be able to defend them in that inevitable IRS audit. All I can say is that the next time your neighbor starts bellyaching that he pays taxes and he deserves this and that and the government should do this or that, be aware he may not be paying one dime to the federal, state or local governments. You don't know unless you actually see his tax return.
That's why we should **replace** the income tax with a sales tax or a VAT.
Unless you can repeal the 16th Amendment (chances of that: Zero), what will happen is that you'll get your national sales tax (or even worse, the VAT*) in addition to the income tax. For that reason alone, I think the "Fair Tax" is unrealistic, so I support a flat income tax - same rate for everyone with no deductions. Unfortunately, that's also unrealistic when you consider how many people currently aren't paying income taxes and the amount of political power and corruption a flat tax would reduce.
*The Value Added Tax is the worst of all worlds for two reason. First, it has all of the bureaucratic complexity of the income tax. It takes tons of bureaucrats and regulations to determine the various tax rates for the value added at each stage of production. This gives politicians all sorts of room for additional "campaign contributions" from industries seeking special treatment. Consider this: ore in the ground is worth less than ore that has been mined, so the mined ore gets taxed for the value added. Ore is worth less than the steel made from it, so the steel gets taxed for the value added. Raw steel is worth less than fabricated parts, so each part gets taxed for the value added. A collection of parts is worth less (normally) than an assembled car, so the car get taxed for the value added during assembly. Do the same for every kind of part in the car, the windshield, the electronics, the tires, etc. and you suddenly have a lot of complexity determining all of the values added as raw materials make their way to finished product. Now, do the same thing for everything else still made in this country and see how much it costs you.
The second bad aspect of the VAT is that it's a stealth tax. Just like the corporate taxes and the cost of regulation, the VAT gets added to the cost of every product. All the consumer sees is that the price went up again and the first inclination is to blame the "greedy corporations" instead of the greedy politicians who caused the price increase.
It may be a mistake to focus so much attention on income tax. The middle class doesn't pay much here, true, but the "Progressive Agenda" socks it to them in other ways:
- Gas taxes work out to probably $600/year per family. It' much higher than this in Progressive bastions like Rhode Island and Wisconsin. A recent Harvard study said gS taxes would have to go to $9/gal to meet the CO2 goals from Cap-and-Trade.
- Cigarette taxes average $5/pack, and fall mostly on the working class. Someone with a pack-a-day habit spends $1500/year or more in taxes.
- Social Security is 15% right off the top.
I could go on, but the average family gets hit with at least 25% off the top by the progressives. With the IRS garnishing tax refunds, the "net payment" to the bottom 50% is fixin' to end.
I'd love the Tea Parties to make this case, i. e. A populist case against the progressives. There are a lot of votes there.
There seems a notion that those of us paying taxes are losers since those not paying taxes also get benefits. Try this: you don't (let's say) drive a car, and yet you pay for the roads. You don't have kids in school and yet your neighbor has 4 and you pay taxes for the school system in your town...etc etc so what?
Again,how many large corporation set up phony He offshore and do not pay taxes? Or the very wealthy with a zillion loopholes to pay much less than they should? Good idea to reform or change the structure of the system, but getting all pissed off because some poorer person pays no taxes is a waste of your time.
Would you change places? Of course not.
Borepatch: That is what I love about these little nickle and dime taxes, a smart person can avoid them. I have a business appointment a few miles from my house. I'm about to pedal to it on my bicycle. This way I avoid the gas tax, the speed cameras and having to pay for a city-owned parking garage. The sun is out, the sky is bright and I am wearing my shades. My city is about to enact a $0.04 tax on anything you buy in a bottle. Since I don't buy anything in a bottle I won't have to pay it. And I am glad to see we are also adding a nonprofit tax, so the kids at the expensive private colleges can now start contributing to the infrastructure they use. I don't smoke, don't drink and I don't gamble. So guess what else I don't have to pay.... I like these kinds of taxes much better than income and property taxes.
Cham: the deduction for educators was $500 dollars a year, not $5000; it was for school supplies purchased out of pocket for use in the classroom; and that specific deduction has been gone for a couple of years now. (I miss it sorely.)
While we're here? Re the Earned Income Credit? As you might guess from the name, it's not just for being you, it's for *earning* *income*. Have a look at the history of the tax credit: it began as a way to encourage people to get off welfare and earn their money. Sadly, other people oppose paying a living wage in this country. So even though some workers in our country work 40 hours or more a week, their income still falls short of what is needed to earn a basic living.
This tax credit was a way to address that without requiring business owners to pay fair wages. I'd rather require business owners to pay fair wages, myself. But for some reason certain segments of our society seem to think that would be evil. They'd rather yap about Free Market and Ayn Rand and Socialism and then whine about how half the country is too poor to pay taxes, as if there is no connection between these two events.
Well, maybe one day conservatives will learn to reason. I keep waiting.
"Of course, when it does reach that point, it'll really suck as we discover just how thin the veneer of civilized behaviour really is."
I think the breakdown of a marriage is a microcosm for what will happen if society collapses. When you see a separated/divorced couple fighting bitterly over every little possession (and the kids), you realize how thin the shield of civility is once there's something at stake. once the illusion is broken, we'll all be in a free for all.
The political parties like the system the way it is because its an easy way to buy votes from a large block of people. Promises of cutting income tax, earned income credits, rebates, etc are used to lure voters into their lairs. The Dems have used the system better than the Republicans through their mantra of "lets soak the rich and give the money to you" wealth redistribution schemes.
Everybody pays taxes, just not income taxes. The politicians like this too as it hides the real cost of government. Those evil oil companies make a profit but your wonderful, protecting, all caring government gets more money per gallon than those oil companies.
Its amazing how many people gladly relinquish their freedom for a few dollars.
fred - roads are primarily paid for with gasoline taxes. If you don't drive you don't pay.
As others have pointed out, many avoid paying income taxes by conducting business under the table. Farmers are great at this. My late father-in-law, a farmer, had a safe in his home where he kept cash (don't put it in the bank where it can be tracked by the Feds) and even checks which he would delay cashing until the most opportune time. Checks would sometimes be signed over to 3-4 people before making it to the bank, thus giving 2-3 people use of the money without declaring it.
A long time ago we through a tea party with the slogan "No taxation without representation"
The slogan of the new tea party should be "No representation without taxation"
Until we implement the latter, we will have many people happily voting themselves benefits from other people's money.
Unfortunately, the real problem is that the latter solution will require another revolution. With a near-majority of people benefiting from the current system, they aren't going to give it up voluntarily. We have allowed our republic to shift so far into non-functionality that the only fix is to replace it.
Not only are half the people not paying tax, a chunk of those are getting money back from the government. If you hit the sweet spot, you can pay no income tax and get a refund of about $4000.
This is why we need to go with a very simple flat tax. Simplicity has the added advantage of reducing corruption and fraud. And in putting lots of accountants and lawyers out of work.
VAT taxes are awful--they end up being hidden and that's not good. They are also just as corrupt. A sales tax charged at the register would be an improvement, but only if the 16th amendment were repealed.
Yup. We've created an ever growing constituency who are always for more spending because someone pays for them to have more.
here seems a notion that those of us paying taxes are losers since those not paying taxes also get benefits. Try this: you don't (let's say) drive a car, and yet you pay for the roads. You don't have kids in school and yet your neighbor has 4 and you pay taxes for the school system in your town...etc etc so what?
delagar said...
Sadly, other people oppose paying a living wage in this country. So even though some workers in our country work 40 hours or more a week, their income still falls short of what is needed to earn a basic living.
Sorry, but why should any business or person pay you more than the value of the service you provide to them? This term “living wage” is simply a liberal code phrase used to force a person or business to pay someone more than they are worth. It is call supply and demand. If the work is so menial that a 8 year old can do it, why should it pay as much as skilled labor? Here is a novel idea, If you want a job that pays more earn it! As you indicated, look at the history. Minimum wage jobs are not meant as long term employment. They are meant as starter jobs. If you can not afford to feed yourself or your family on the money you currently make, do something about it! Learn some skills that will get you more money or get an education so you can get a better job. All that minimum wage laws do is hurt potential employees and consumers. It hurts potential employees because if I am forced to pay my existing workers more than they are worth, that limits how many I can hire. It hurts consumers because I have to pass along my costs in the prices I charge and if I need to pay my workers more than they are worth, that means I am charging more than I otherwise would resulting in higher prices.
Fred,
Corporations never pay taxes. You do. No company is going to decrease their profit to pay a tax. Rather they increase the cost of their goods or services so that the profit remains the same. Therefore you and I pay the tax. To believe that companies pay taxes is to believe in the Easter bunny.... People pay taxes not things.
This ignores what I think is a more important point: the number of people whose incomes are *definitely* high enough to pay taxes...but who benefit so directly from government activity that they come out way ahead with government scope expansion, even when their taxes go up. See my post paying higher taxes can be very profitable.
herbal wrote: "We've created an ever growing constituency who are always for more spending because someone pays for them to have more."
Yep, and we pay them to have more children we can support then jail. Well, we jail them if they are boys, we pay for them to have more kids if they are girls.
Trey
In a perfect world I would like to see the masses quit having to pay for the schools. If you have kids you would be required to educate them, as in reading, writing and arithmetic. End of year testing would be mandatory. You can send your kids to whatever school you like or educate them at home, but the parents or guardians foot the bill, not everyone else. If that were to happen the out-of-wedlock birthrate would plummet.
Cham, you make a point. I usually think of the advantages to having an educated public, but the public schools no longer produce an educated public. So I think I agree with you.
Trey
@Cham said...In a perfect world I would like to see the masses quit having to pay for the schools. If you have kids you would be required to educate them, as in reading, writing and arithmetic. End of year testing would be mandatory. You can send your kids to whatever school you like or educate them at home, but the parents or guardians foot the bill, not everyone else. If that were to happen the out-of-wedlock birthrate would plummet.
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I agree. I also think we'd see it plummet more if we cut off some of the revenue streams, like wealth transfer disguised as tax credits and child support. There would also be more a more civil relationship between parents if child support was a private arrangement in exchange for access to their children, and you'd also see many of the out of wedlock children adopted into two parent homes who actually want them (I don't speak in theory here, both my daughters are adopted).
I know the other argument--that it lets promiscuous men off the hook. I agree that's problematic. However, no solution is perfect. Paying the person most in control of pregnancy hasn't worked, in fact it has backfired. (A useful side effect is bad men may have a harder time getting some. But that's a topic for another day.)
If people want kids, they should figure out how to support them without leveraging government to either give them money or force others too. Otherwise, they should either be more careful or give the child a stable life with two parents that get along and want him or her.
I've got my shield ready for all the arrows that may come a flying. :)
Trust,
No arrows from me; I'm about to invite some of my own. One effect at least coincidental if not contributed by the growth of the obligation-to-parents-and-mothers industry is the growing cultural idea that we should be immensely proud and deferential to people who elect to have children.
I must admit I've never been a kid person (I love my nephew and other family, but I don't coo whenever a baby is nearby.) So I'm not exactly jumping out of my shoes every time someone brings their baby around the office. I'm a minority though - most people stop the workday for twenty minutes to fawn over the critter.
The problem I have is that it's pretty clear the parents are getting off on the attention, and in a lot of cases expect some kind of serious exception to regular procedure because they chose to reproduce. This keeps on through the childhood as they show off their kid (and thus themselves) in sports, school, church and everything else.
I wonder how things like mandatory family leave, jail penalties for child support, and (my favorite) handicapped parking spaces for "new or expectant mothers" at Whole Foods feed this narcissism of the modern American parent.
It's to the point where criticism of anybody who has kids is off limits. Can't make it to work on time? Give her a break, she's got kids. Ducking out early on Friday and monopolizing all the holiday leave, sticking holiday workdays with the young workers? Lay off, he's spending time with his family.
An extreme example would be Kate Gosselin. When I cited my disgust with her wenchy, shrewish ways, I was rebuffed with "you can't judge her! She has eight kids!!!!" My response: whose idea was it again to have eight kids?
Then again, with the native-born adult population reproducing below the replacement rate, maybe I'm wrong and we should be encouraging bearing children instead.
Go Galt! I'm not paying taxes this year, and the government owes me a refund!
Deny the system your productivity. Reduce your expenses. Enjoy tax free living. I am.
@Topher: "Then again, with the native-born adult population reproducing below the replacement rate, maybe I'm wrong and we should be encouraging bearing children instead."
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Well, people like me, who work hard and pay out the wazoo in taxes (largely entitlements for those poor victims who choose the ride the carousel of bad men with abandon, oops I mean single mothers) have one or two kids and think "that's all i can afford." If people are doing it on the governmnet gravy, and get more money per kid, they may have more.
Basically, people who pay for their own kids have a couple kids, and those who pass the cost off to others (government, 3 or 4 "dads") have more... so when they say the lower class is larger than it was yesterday, they are right.
My hubby and I have 7 kiddos and my single mother sister gets more back than we do... She has 1 son.. The difference? He makes in the 50k a year range and she makes 16k..
And yeah SS is a tax, They have taken about 60 grand from me and hubby at this point.. We could just about pay off the house if we could get that money back.. But we will never see it again.
@Jose
I hear you. Soon enough, they'll have too many takers for the makers to support.
7 kids! wow...twin daughters are enough for me! Then again, cancer kept us from parenthood until last year when I was 35.
What I said before, I have no problem with people who have as many kids as they want, so long as they don't pass the cost to others. I wish all good parents could afford many more!
Best,
Trust
Trust, what you say makes perfect sense to me.
Trey - father of 4
TMink, Trust, Jose:
Congrats to you all. I am heartened to see people still having lots of kids. The joy of a large family is lost on today's generation.
Don't take my post the wrong way - I think you know the people I am talking about who want attention and special privilege because they had a child.
I am curious how you all feel about the cultural trope that large families are out of control. I can't remember the last time I saw a media portrayal of a more-than-three-kids family that was calm, collected and secure.
(I think it's closely related to the advertisers' attitude that a father is less of a parent - witness the ads and sitcoms where Mom goes away for a day and all hell breaks loose.)
The bias against large families is an especially prevalent attitude where I lived in coastal California, where any more than two children is looked down upon as environmentally unfriendly, evidence of dangerous religiosity, or that they were victims of some horrific reproductive accident.
I am curious how you all feel about the cultural trope that large families are out of control. I can't remember the last time I saw a media portrayal of a more-than-three-kids family that was calm, collected and secure.
When and where I grew up, a family with 3 kids was considered small. I'm the youngest of 5 and that was hardly exceptional back in the day.
One of my nieces married a Mormon. They have 5 children, all under 9 years old. I doubt any home with 5 young children could be described as "calm" unless medication is involved, but my niece and her husband are good, loving parents. They work hard to support their family. They may be considered exceptions by modern standards but they're hardly unusual for the Mormon families I know.
It is interesting, I go to a conservative Evangelical church, and I am surrounded by large families. We kind of backed into our large family as we had our triplets by donor embryos. We and the docs were counting on one child, possibly two, but then things got interesting!
The church we go to is also very involved in adoption and creating a place for special needs kids and their families, so I do not think there is a move afoot to repopulate the world or anything, but it is interesting that larger families are part of the culture there.
As to being portrayed as a dupe in the media and on tv, I am a white professional who is Christian and conservative. Oh, and I am fat. And own guns. And go to tea parties.
So I am used to being portrayed as slow or demon spawn by those victims of the progressive delusion. And honestly, they are right to fear people like me and us here on the blog. We are dangerous to their delusion.
Our kids will grow up and vote, we vote, we give money to charity, and some of us are actually reproducing! We can carry on a conversation focused on facts and reality. We take care of ourselves and respond when angered. We have long term goals and are not as distracted by trivia. So I understand and respect their fear if not their slanderous attempts to marginalize us.
Honestly, I see it in spiritual terms. The light has an enemy, and the enemy has unwitting soldiers.
It is no jump from supporting abortion on demand to demanding that people have abortions because their number of children is "bad for the planet."
Having said all that, I pay as I go for my kids! And I would work two jobs to do it. From my perspective, it is not the size of the family but the financial responsibility of the parents that is the crux of the biscuit.
What a great conversation. These posts have been very thoughtful and thought provoking. Outstanding.
Trey
Topher,
You should walk through the mall with me one day.. My hubby gets old men telling him he is the luckiest man in the world and I get snide comments from woman about welfare.. Ohh and birth control.. And "why did we fight so hard so people like you would happen". Interesting stuff.
You want in control kiddos. Have a bunch and explain to them that they have to get along cause they are going to be together for a long time.. Disputes get handled a lot faster and sharing is a forgone conclusion.
I have to say with the comments to me from other people... I have mentioned I homeschool the kiddos. Well people with 3 kids in public school yelling at me about being on welfare, which I am not, really tick me off. At 9 grand a kid they are getting 27k from the government a year that I am not. But somehow because I have 7 children, 6 before 3 weeks ago, I must be costing someone a fortune. And some of these people are terribly certain it is their pocket I am picking.
Also my kids father is not any less a parent than I am. We have had hard times, made mistakes and fought our way through to something better for both us and the children. We have both been buffoons and heroes at different times but we have always been determined to do this together.
And I would challenge any family of 4 to do better than we do on not wasting. My kids have less than some kids do because the cool stuff they have to earn. MY daughter has bought her own DS, Ipod, phone and (sadly) a guinea pig whom she had for 5 years but had to pay 70$ Wednesday to have put to sleep.
They have to earn everything. I believe it means more to them. The kid, 8 years old, who plays with my kids is on his 4th DS and about to get his 5th because his new DS is just a small one of the newer ones- he wants the bigger one now. My daughter has a DS and my son has a DS. My 7 children have created less waste than this one. Of coarse it is because my others have not had the responsibility and forethought to save up for these things. If they would rather spend their allowance on little things the choice is theirs. And if they can't manage to save up then thy can't manage having expensive electronic toys..
And the dads attitude about it is weird. Like I am less of a person cause all of my kids don't have them and he is giving his son everything he never had.. blah blah blah.. Never mind teaching your kids to be responsible and not to waste just keep buying them stuff and act as if that is all you have to do. It is bizarro world out there for me..
one more thing.. I expect people to coo at the newborn. Not because I am seeking but because they are going to. And yes I am that nazi with the ready bottle of germ x for those who insist on holding his hand. Old people, for whatever reason, love to touch new people and I, being a southern girl, am not about to sass them. Besides running around telling people not to coo at your baby may make some think that having babies turns you evil. Your example of Kate + 8 is a good one..
Trust,
Terribly sorry about the cancer. Glad you had your twins though..
And yes there are going to be more collecting than there are paying soon. I pity those who can't do for themselves when the situation come to a conclusion. Either people will die or starve or both.
And yes there are going to be more collecting than there are paying soon. I pity those who can't do for themselves when the situation come to a conclusion. Either people will die or starve or both.
The leftists love this situation. The more they can make you dependent on the government, the more they can enslave you to their ideology. They claim to act out of compassion but their really acting out of desire to control everyone.
This is why they work so hard to convince minorities that conservatives/libertarians are racist. As long as leftists can keep minorities dependent on government and voting for them, they can muster enough votes to push their agenda and control all of us.
Real freedom comes from yourself, not the government.
TO: Dr. Helen, et al.
RE: Does THIS....
"We have 50 percent of people who are getting something for nothing,..." -- Dr. Helen's headline
....mean half of US are living in the vicinity of 'poverty'?
Regards,
Chuck(le)
[The Truth will out.....]
"But somehow because I have 7 children, 6 before 3 weeks ago, I must be costing someone a fortune."
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You are.
Your husband. You sure ain't paying anything yourself - you have to be getting the money from somewhere.
He's paying voluntarily now, but if there's a divorce (lots of people divorce), he will pay forced at the point of a gun to continue to support you. Just like the taxpayers are forced at the point of a gun, ultimately, to support sit-at-homes.
"...mean half of US are living in the vicinity of 'poverty'?"
---
Right. She's simply envious that some people are paying no taxes while they EARN their money.
It should be the other way around: She should be complaining that higher-earners should also be left alone.
But the way she phrased it shows what's really going on in her mind.
tether
Hubby and I all through our marriage have done all we could to support our family. With government help. For us this included home schooling. It has also included me working and if he lost his job I would go back to work while he looked for another job..
And I do not "sit at home". I take care of and school our children. I run the house ad do repairs.. See our chimney flashing need to be fixed and the ceiling under it repaired. I will be the one doing that.. It would cost us almost 2k to hire someone. I took the time to learn about dry wall and textured ceiling replacement so we wouldn't have to pay that out.. It will cost us about 120$ including the replacement shingles. If I weren't here he would be hiring someone. Do the math.
We do thing together and for each other to make things better for us and our children.. We seal with and forgive each others mistakes. We choose to not stew in our anger.
I realize from your previous posting that I am not going to get any good wifey badges from you but please consider what I say.
As for your panic about me divorcing him.. It wont happen, in June we will have been married 16 years together for 18. I have been with him through illnesses and even surgeries.. Now I have done everything for him including wiping his backside because he couldn't reach with IVs in both arms..
If I were going to leave it would have been long before now..
Once 50% +1 can vote themselves more money, then this game is over. Most people would credit Bush with the tax cuts pushing, at the time, 40% of people not paying income tax, but now it's gone to 50%, so what does that say? Will he get credit for that? Because President Barely at this moment is taking credit for the new level of taxes to come and will the current 50% getting off scott free get pulled back into the fray?
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