After reading a lot about the economy yesterday, I got curious about taxes, so I did a little research this morning. I came cross this Gallup poll from a couple of years ago asking Americans what they think about who pays too much or too little taxes. Would it surprise you to know that 51% feel that lower income people pay too much tax, while 68% feel upper income people pay too litte? Probably not. Do you know how much those people actually pay?
I found two great sources. This one is a little older (2001), but it puts the numbers up in an easy-to-read way, and though they have changed a little, it still gives you a pretty good idea of what's going on. The top five percent of people are paying a majority of our taxes. The lower fifty percent of people are paying about 4%. I would bet that 4% comes from a very small percentage of that 50% of Americans. Almost half of Americans pay little to no taxes, and yet we feel they pay too much and are in need of more tax cuts.
That's just proportional to what they earn, you are probably saying. Well, to some extent it is, but not entirely. The top 5% of earners make about 32% of all income in the U.S. So if I do my math right, they are paying not quite twice as much as the rest of us, proportional to what they make (and by the rest of us, I mean the rest of us in the top half). That doesn't include all of the money these guys give to charities and foundations. (Isn't social responsibility a great thing?)
I am not against the richer having to pay a little more, percentage-wise, on their taxes, but shouldn't there be a line somewhere? When do you stop squeezing them? Most of these people earned their money through ingenuity and skill. As the land of opportunity, do we punish people now for taking too much advantage of that opportunity? Or does the land of opportunity mean having the opportunity to live off of what other people have worked to make?
This website had more updated numbers on who is paying what and who is actually making money off of taxes (yes, there are people who are actually getting money from the tax system instead of paying it).
An economic system that far out of balance cannot be a good thing. Look at it this way, as the stock market drops even more, so does the amount of income tax, because that's where most of these people have their money. People are speculating another crash one of these days. Who would be hurting the most from a crash? Possibly the government, because that's one of their biggest sources of income. That doesn't seem very sound to me.
Do you still think it's a good idea to keep laying more taxes on that top 5%? Or should we be looking for other ways to try and balance our financial woes? Maybe now isn't the best time to be giving the government more of anyones money to fund government-run programs. Are you really so happy with the programs they're running already that you want to give them more to be in charge of? Please take some time to think about it, and take some time to read the articles. Don't just make a knee-jerk reaction that everything is the fault of the rich.
Oh, and if you're curious like I was about where Congress fits in all of this: Most experts draw the income line for that top 5% at around $250,000 a year. According to a couple of different sources I looked at, even the most senior members of Congress and the Senate still make under $200,000, so no, these extra taxes they would be imposing would not be on themselves.
Friday, September 19, 2008
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4 comments:
I wish this information were more widely spread. I know more than a few anti-rich people. We are low income and of the small percentage who actually make money off the tax system. Our refund is usually around $5,300. We do put it back into the economy, since it's needed for home repairs and other necessities that had to be put off.
As homeschoolers, my children will not be drawing the approx. $4,000 to $6,000 (varies depending on area) per pupil/money from the government, so we are saving taxpayers in that way.
I have a heart for all the working poor, but I think their needs are better met by people giving money to charities and churches. There is far less waste when help is given in this way. And, hearts and lives are touched in deeper ways. Unfortunately, few people actually give anything significant to churches or charity. Some churches embezzle the money, and I suppose that turns people off.
Just a reminder, you're not making money off the system if your refund+rebate is lower than the ammount of money that was taken out of your paycheck during the year for taxes. The people that are making money off of it are not paying any taxes, but they are getting money back from rebates. Your husband probably pays a lot more than that $5000 from his paychecks over the course of the year.
I agree that there are people who are hard on their luck that need our help, and I also agree that other outlets should be used for that.
When I saw those charts and realized how unbalanced this all is, it explained a lot to me about why our economy is in so much trouble. If that is the case, more of the same would mean putting more eggs in the same basket.
The refund exceeds our tax liability. Having a few children helps reduce our burden, and if a family is low income, it qualifies for credits (earned income credit and an alternative child credit). I don't know how the tax system defines low income, but we are near the federal poverty level. We make it without entitlements. I don't know if those receiving entitlements get the same tax credits. Probably.
It sounds like your family is in a very similar situation to the one I grew up in. Thanks for sharing with us that that's where your family is at but you don't blame the rich or expect more from the system. I think, like you said, most people just don't realize where it's all coming from.
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