Surprise of the Week, Wherein I Give Kudos to Kevin Drum on a Tax Post
This post from Kevin Drum didn't start auspiciously, repeating the leftish meme that the tax day protests were all Astroturf events. But I must admit I had a real double-take on his last paragraph, wherein he points out something about tax polls that most people seem to be missing:
With Tax Day coming up, and astroturf tea parties being organized around the country, a lot of people have been linking to polls showing that most Americans aren't, in fact, actually unhappy with the amount of income tax they have to pay. Gallup, for example, reports that 61% of Americans think the amount they're paying this year is fair. Or there's this one, also from Gallup, that asks directly whether the amount you're paying is too high or not:
Not bad! 49% think their income taxes are just fine or even a bit low. Except for one thing: this chart shows exactly the opposite of what it seems. Consider this: about 40-50% of Americans pay no federal income tax at all1. That's zero dollars. I think we can safely assume that these are the people who think that their taxes are about right. What this means, then, is that virtually every American who pays any income tax at all thinks they're paying too much. There are various reasons why this might be so (a sense of unfairness regardless of amount paid, a fuzzy sense of how much they're paying in the first place, simple bloody-mindedness, etc.) but overall it's not exactly a testament to our collective willingness to fund the machinery of state.
Outstanding. Which only leads me to wonder why, if he realizes this, does he believe that people might not spontaneously organize protests, rather than it having to be a Rove-Fox News plot. I think the answer to that is the Left just can't shake their own perception that protest marches belong to them in the same way the Right feels that AM Radio is their media to rule. (What, by the way, does that leave for libertarians, other than Rush, Ayn Rand, and Firefly reruns?)
anoNY:
"What, by the way, does that leave for libertarians, other than Rush, Ayn Rand, and Firefly reruns?"
Please clarify for me what you meant by "Rush".
April 14, 2009, 12:04 pmRolo Tomasi:
What else do you need besides Firefly reruns?
anoNY:
April 14, 2009, 1:05 pmhttp://en.wikipedia.org/wiki/Rush_(band)
Mark:
Also, do you notice the correlation between these results and Bush tax policy? Contrary to the myths of the left, the Bush tax cuts heavily favored the lower income groups by creating a new entry level tax bracket, expanding the child tax credit, and eliminating for the most part the marriage income penalty. Under Bush tax plans many more Americans were not paying any federal income taxes.
However, I am an advocate of the idea of a government of the people, for the people, and by the people. If a majority of individuals are not paying income taxes then how are they actually participating in that government? They are making absolutely no contributions.
And, don't give me the nonsense about how lower income people pay social security taxes and use taxes. These taxes are earmarked so that the payer receives benefits directly in proportion to their contributions. In other words, the lower income group pays FICA taxes, but that just means that they will receive their Social Security check (augmented by other payers for that matter) and Medicare benefits later in life. These are not the same as paying general taxes.
Last, I think we need to reformulate the way we pay our federal taxes. Right now the federal government collects its revenues from three major sources: income tax, social security tax, and corporate tax.
I believe that we should change this tax structure.
First, I would repeal the corporate tax which raises about $350 billion/year. In its place I would institute a 6.5% Federal Sales tax on all transactions. A 6.5% sales tax would raise about $600 billion in revenues. THe benefit to this is that the corporate sales taxes are very inefficient. THe consumer essentially pays these taxes anyways. Putting a sales tax on directly would just cut to the chase. Most likely, because corporations no longer have to pay a 39.6% tax or find very inefficient ways of avoiding these taxes, consumer products would actually have a net decrease in price. Secondarily, because consumption would be taxed instead of income people whose income is made in the black market would pay their share of taxes. Lastly, these taxes would also be paid by foreign consumers of American goods and services.
Second, I would repeal the estate taxes while doubling excise taxes on alchohol and tobacco.
Third, I would create a federal property tax on real and personal property. This tax would essentially tax all real estate property, private and commecial. THe tax would be approximately 0.5% of the first million and 1% after that with a $300,000 exclusion that can be used once for an household. High end personal property would also have specific tax schedules. I believe that this type of tax could raise around $250 billion in revenue.
Fourth, I would eliminate the FICA tax and enforce that the employer matching piece of FICA be added to each worker's gross income. Then I would place a 9.75 flat tax on all income. THis income would include wages, interest, dividends, and capital gains.
Fifth, I would create an "excess" income tax. This tax would allow a generous personal exemptions of $7,500 per family member, allow the excemption of all local taxes, a deduction for mortgage or rent of a primary residence, a deduction for health care expenses, and potentially deductions for what I call Special Situations, such as an extra exemption if one of the individuals lost their job during the tax year. This "excess" tax would be 7.25 of all taxable "excess" income.
What this would do is radically change the relative price of consumption versus investment because marginal taxes are signinificant reduced. As we know, marginal tax rates are the most important driver in understanding how taxes, and thus the government, impacts the economy. In this plan, which actually enhances overall revenues, the marginal tax rate on corporate investment is now zero from 39.6% and on private investment it is slashed from a high bracket of 35% to 17%.
April 14, 2009, 2:18 pmelambend:
anoNY:
Rush, the band, you know the one with many libertarian themes.
Warren:
Blogs, libertarians are left with blogs, like the present one.
April 14, 2009, 6:44 pmPhil:
What, by the way, does that leave for libertarians, other than Rush, Ayn Rand, and Firefly reruns?)
Southpark?????
April 14, 2009, 7:13 pmKaren Dennison:
I asked my niece how much she and her husband paid in taxes. Her response, with a smile, was that they didn’t pay any taxes, they got money back!!
I demanded a paycheck stub and then explained to her what every box meant.
I think that since taxes are taken out of their paycheck before anyone sees the money, many don’t realize how much they are paying and therefore would give the response that they are paying a fair amount.
Rep. Dick Armey once said if he had things his way he stop taxes being automatically taken out of paychecks and make every taxpayer and the entire family, including the dog, go down to the Post Office every month to pay their taxes in nickels. That would make more people pay attention.
April 14, 2009, 11:55 pmDailyNat:
Just because someone may not have any money taken out of their paycheck doesn't mean that they are not being taxed. Any employer knows how much the government takes for the "privilege" of employing someone. Most employees would earn more if the government weren't taxing their employer for their labor behind the scenes.
April 15, 2009, 1:04 pmDane Carlson:
DailyNat:
Not only that, but without taxes not only would we each make about twice as much, but our money would go twice as far since those that create the products and services we purchase wouldn't have to pay taxes either. In effect, we'd be four times as rich!
Now to really move into fantasy land: If we were to also to deregulate everything, prices could be cut in half again. We'd be eight times as wealthy. That's a dream worth reaching for.
April 15, 2009, 2:02 pmCapt Grandpa:
"Which only leads me to wonder why, if he realizes this, does he believe that people might not spontaneously organize protests, rather than it having to be a Rove-Fox News plot."
Because he knows that lefty protests are "spontaneous" only after ANSWER organizes them.
April 16, 2009, 9:06 pmJeff:
Focusing on the Federal income tax alone misses the real issue. I'm upset about the federal income tax rate, but what I'm livid about is:
Federal Income Tax
Social Security Tax
Medicare Tax
State Property Tax
County Property Tax
City Property Tax
Hospital District Property Tax
Levee Improvement District Tax
State Sales Tax
County Sales Tax
City Sales Tax
Transit Authority Sales Tax
-more taxes than I can remember-
Add it all up, and more than 50% of my income is being sucked into Government agencies at every level. Yes, I receive some valuable services for these tax dollars, but the loss in freedom and liberty is greater than the services.
April 17, 2009, 6:16 am