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As painful as April 15th is for many Americans, we'll be hearing fewer screams than usual owing to the fact that 47% of households will pay no income tax whatsoever. A family of four, with two children under 17, can earn $50,000 without owing a red cent.
Unfortunately, foisting the nation's tax burden exclusively on the "rich" (the top 10% of earners pay 75% of all federal income tax revenue) won't even remotely pay for the ever-growing entitlement programs that administrations from both parties have put in place (although never so much, so fast, and so disingenuously underfunded as those passed by the Obama administration).
In fact, taking 100% of the money from the "evil rich" wouldn't be enough... which is why Democrats are now gearing up for an additional VAT tax which will affect the rich, the poor, and everyone in the middle.
Because when you can't squeeze any more blood from a stone, it's unavoidably time to start squeezing the sheep.
6 comments:
And don't forget the pain of trying to DO your taxes. Today's WSJ editorial discusses the "cost" of compliance for corporations. It's something like 50% of what they pay in taxes. That's absurd.
That's why the VAT tax....MINUS the regular federal income tax...or, a small VAT tax and a reasonable flat income tax for everyone...would be the most fair. And it would be so simple too! 10% of all your profits or income, and say an additiona 1% or 2% on purchases. I'd love to see the numbers on that...I bet it would bring in plenty of money and no loopholes for tax evaders.
Anonymous- you're right about the pain of trying to compute taxes. A recent study showed that the U.S. is 61st in "ease of tax collecting." The process is arcane, baffling, and no two professionals ever come up with exactly the same total when using identical figures.
Suzy- Yes, the VAT (if used to replace income tax) would be unbelievably fair and simple... which is why Washington will never use it like that.
And, let's not forget, corps / companies don't actually 'pay' taxes, they build the cost into the price structure of the product. SO, cutting business 'income'(or 'profit') taxes to 0 will
a) generate large profits for execs / stock holders (where it will be taxed)
b) reduce cost of product, making it more competitive, leading to more business and (gasp) more jobs (tax paying jobs)
Which again, is why the fed won't go for it.
Gallup: Six in ten Americans expect tax increases in the next year
Gallup: Only 3% of Americans say their taxes are too low
AP: Obama’s approval hits new low, opposition to ObamaCare hits new high
America currently reconsidering George W. Bush
The United States has one of the highest corporate tax rates in the industrialized world. One of the reason so much of our manufacturing has moved offshore is the cost of production. If we were to slash the corporate tax rate in HALF several things would happen, all of them good for the US. More manufacturing would be profitable to be done here, creating more jobs. The price of goods to the consumer would drop, as there would be less tax to pass on to the end user. The demand would increase from the lower prices, leading to a net gain in tax revenues to the Treasury. If they want to kick the economy into high gear, this is the path to take.
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