THe idea that Sales Taxes are more visible flies in the face of most people's experiences.
Gee, I see it quite differently, I am quite aware of the sales taxes I am forced to pay. As are the folks in any place trying to raise said taxes. The resistence on the part of the public is fierce against sales tax hikes and not take lightly by most local governments.
THe idea that Sales Taxes are more visible flies in the face of most people's experiences.
70% of the voting public don't mind higher income tax rates and clamor for more from government looking for the top 40% of income earners/producers to foot the bill. You figure the current system is visible in the face of most people's experience? Most folks are very much aware of sales taxes to the degree of even mentioning rate increases brings every one and his brother and dead uncle out to the polls around here. National income taxes, nary a peep except from those in the upper 40% of voters taking the real hit.
A very large proportion of the voters in the United States pay little or no individual income taxes (High personal exemption, standard deduction and EITC) which removes a very large proportion of the electorate from participation in such taxes completely(more than 20% of families). In fact the largest tax they pay and are visible to them are excises & state sales taxes. This is even true of the Armey "Flat" tax which would provide adult $13,600 exemptions right of the top.
Note the distribution of National Taxes by kind and how much is actually hidden from the view of the electorate, or implied to be something other than a tax (e.g. "Social Insurance" FICA).
http://www.cbpp.org/taxday98.htm
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CBO Estimates of Effective Federal Tax Rates for 1998 (% of gross income '97 dollars) |
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Families Ranked by Income Quintile |
Individual Income Tax |
Social Insurance Taxes |
Corporate Income Tax |
Excise Tax |
Total Federal Taxes |
| Lowest($11,400) | -6.9% | 7.8% | 0.5% | 2.8% | 4.2% |
| Second($28,600) | 1.7% | 9.9% | 0.9% | 1.6% | 14.2% |
| Third($45,100) | 6.3% | 10.8% | 1.4% | 1.2% | 19.7% |
| Fourth($65,600) | 9.0% | 11.3% | 1.4% | 1.0% | 22.7% |
| Highest($167,500) | 16.2% | 8.0% | 4.6% | 0.5% | 29.3% |
| Top10%($240,700) | 18.0% | 6.7% | 5.8% | 0.4% | 30.8% |
| Top5%($355,800) | 19.7% | 5.3% | 7.0% | 0.3% | 32.3% |
| Top1%($1,016,900) | 23.0% | 3.0% | 9.5% | 0.2% | 35.7% |
| Average for all families($62,400) | 11.2% | 9.3% | 3.0% | 0.9% | 24.4% |
| Source: Congressional Budget Office, May 15, 1997. Notes: Pre-tax family income is the sum of wages, salaries, self-employment income, rents, taxable and non-taxable interest, dividends, realized capital gains, and all cash transfer payments. Income also includes the employer share of Social Security and federal unemployment insurance payroll taxes, and the corporate income tax. For purposes of ranking by adjusted family income (AFI), income for each family is divided by the poverty threshold for a family of that size. Quintiles contain equal numbers of people. Families with zero or negative income are excluded from the lowest income category but included in the total. Individual income taxes are distributed directly to families paying those taxes. Payroll taxes are distributed to families paying those taxes directly or indirectly through their employers. Federal excise taxes are distributed to families according to their consumption of the taxed good or service. Corporate income taxes are distributed to families according to their share of capital income. |
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This distribution of immediate participation in the cost of government does not bode well for the reductions in government where those who derive the most in immediate benefit from government have the least participation in paying the bill.
The Honorable James DeMint (R-SC)
United States House of Representatives
THURSDAY, APRIL 5, 2001
12:00 noon"There has been a shift in the relationship between individuals and government, he argues, such that fewer and fewer are paying taxes at the same time that more and more are receiving increasingly generous benefits. If it becomes the case that most voters do not bear a financial burden for this largess, then there will be little to restrain--and significant political incentives to encourage--the continued growth of government. And at that point, DeMint warns, we have reached a major crisis in our democracy."
Hiding taxes by embedding them in price inflation (e.g. Corporate taxes & employer's portion of FICA), misdirecting the attention of the electorate by calling taxes contributions to retirement, disability & insurance(e.g. FICA), tax credits, and large exemptions and standard deductions removing folks from even the nominal participation of filing, just makes for perpetuation of the same old hide the thimble tax games.
Milton Friedman as quoted by Northwest Florida Daily News, 10-16-2000: