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The rich pay all the income tax - but who's really to blame?
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Over 45 percent of all American households pay no income taxes. Half of that figure earns no taxable income and the other half qualify for tax breaks that wipe out their liability.
Highlights
CALIFORNIA NETWORK (https://www.youtube.com/c/californianetwork)
2/25/2016 (8 years ago)
Published in Politics & Policy
Keywords: Income tax, rich, poor, welfare, entitlements, pay, blame
LOS ANGELES, CA (California Network) - The number of Americans who pay taxes is an important metric because it give a snapshot of the overall health of the economy. More people paying taxes suggests more people are working, earning livable wages, and carrying their share of the social burden.
However, with nearly half of all households, which includes whole families, pay nothing. Working households may pay taxes on income through the year, but tax refunds return the money to the worker. This is a time of year when people tend to foolishly boast about the size of their refund checks.
The vast majority of taxes are taken from the wealthy who account for nearly 90 percent of the income taxes collected by the federal government. Note, this is just income tax.
Why aren't more people paying more taxes? Why isn't the social burden more equally distributed?
The problem has many roots, but laziness isn't likely one of them. Americans tend to be more hard working and work longer hours than their European counterparts. Instead, wages remain low. Most of those who pay no taxes also receive welfare assistance in some from. And many of those on welfare work. Some even work more than one job.
According to the Tax Policy Center, less than 8 percent of households are mooching off your generosity. Another 22 percent are retired, and the remaining seventy percent are working but do not earn enough income to qualify for income taxes. They still pay payroll taxes and excise taxes, but these are not "income tax." Their wages are simply too low.
While it's tempting to generalize and blame laziness and entitlement mentality for the problem, the fact is, it is much more complex. Low wages are a common culprit. Income taxes are linked directly to wages and are withheld from pay by default. Higher wages would move people from welfare and save the taxpayers the cost of subsidizing their living. More importantly, it would convert these people into taxpayers, distributing some of the social burden to them.
Unfortunately, while the wealthy pay high income taxes, their taxes are not so high as to prevent them, or the corporations they manage, from getting involved in politics. This political involvement has been instrumental in preventing increases in minimum wages and in stifling collective bargaining movements.
In fact, there are calls to eliminate or at least reduce the minimum wage. And while this would create more jobs, it would also reduce incomes leaving fewer people to pay taxes, increasing the burden particularly on the middle class.
Having a government that spends tax revenues wisely would also be helpful.
There remains no system which creates plentiful jobs, with generous pay, and healthy taxpayers because such a system is at odds with profits. And any system at odds with profits stifles innovation and development. The problem isn't new, but it is a problem, and it's one that must be addressed by every generation.
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