Tax the Poor.(A MUST Read!)

FOX News ^ | 4-10-2003 | By Radley Balko

[vannrox]

Last fall, the Wall Street Journal ran an editorial entitled "The Non-Taxpaying Class." The editorial, which dubbed those too poor to pay taxes "lucky duckies," won the Journal widespread ridicule from big-hearted egalitarians throughout the world of media and punditry.

[Zon]

Please tell me how this scenario won't happen.

Read the link to fairtax.org it explains how. Educate yourself; don't let other people tell you what to think.

[supercat]

Taxing something will make there be less of it; subsidizing something will make there be more of it.

What, then, is the effect of taxing wealth and subsidizing poverty?

[tlrugit]

As one among the recently unemployed I can tell you that my unemployment check is taxed. I don't begrudge paying taxes, they are what feeds the great benefits and services I have as an American.

[jackbob]

...if Americans were allowed to own and invest their payroll taxes, the gap between rich and poor would shrink -- and at a far faster rate than tax redistributionists could ever achieve.

I agree in total. But I find his calculations on percent of taxes paid by the various classes to be quite distorted. But what is most missing is any reference to accurate figures on which classes pay a greater percent of their expected income in taxes. I use the word 'expected' because that is the amount reasonably calculated, anticipated and settled upon at the point of exchange. If these figures were used, one would find that lower income earners, pay a higher percent in taxes, than do higher income earners (and that does not include sin taxes).

[jackbob]

Your entire reply is thought provoking. You say:

Hmm, I have a few questions. Is the payroll tax, sales tax, property tax (possibly included in the rent) included in this tax burden? If it is not what whould be actual number otherwise?

Likewise, are the income taxes, property taxes, business taxes, etc., of all the various workers that went into making and marketing a loaf of bread, proportionally included in the taxes paid by the consumer who purchased that loaf of bread? Of course they are not. The article says nothing that relates to the real world.

[Billy_bob_bob]

Speaking from personal experience, I used to be one of those people paying the top rate. I got burned out on working so hard and having so much taken from me. This year I expect to earn exactly $0, and next year I'm planning on keeping my income under $20k.

I've had it with working my fanny off just to have it all taken in taxes. From here on I'm going to slack off, and just work just enough to pay the bills. My goal is to earn so little that the government ends up sending me free money, rather than stealing half of everything I earned (I used to live in California, with a %10 top income tax rate).

From here on my motto is "let someone else pay the taxes", because I'm not going to expose myself to income taxes any longer. Whatever the threshold is of taxes, I will earn $10 less than that. I got rode hard and put away wet one too many times. No more.

[jackbob]

The point of the deductions is that the powers that be are recognizing (1) the tax rate is too high (2) that deductions enable the government to acquire power by directing specific types of spending (3) the complex code feeds an entire industry of tax specialists and civil servants.

And so the seesaw will swing back and forth, back and forth, while our rights go spiraling round and round, down and down. To pay for what? More tax specialists and civil servants.

[Republic If You Can Keep It]

Likewise, are the income taxes, property taxes, business taxes, etc., of all the various workers that went into making and marketing a loaf of bread, proportionally included in the taxes paid by the consumer who purchased that loaf of bread?

1. That would be double counting. The income taxes paid by the bread baker are already accounted for in the article (like those of everyone else in the country).

2. The article has nothing to do with property & business taxes.....so including them in your question is N/A.

[Republic If You Can Keep It]

Please tell me how this scenario won't happen.

Exactly! The national sales tax is a wooden nickel if I've ever seen one.

Noooooooooooo way!

[jackbob]

That would be double counting. The income taxes paid by the bread baker are already accounted for in the article (like those of everyone else in the country).

Not necessarily. It can be double counting. But it does not have to be. Furthermore, as I presented it, it was not double counting.

The article has nothing to do with property & business taxes.....so including them in your question is N/A.

You are correct that the article had nothing to do with property and business taxes. But your claim that it is not applicable is wrong. The article presented a claim that the "tax burden is climbing higher and higher up the income ladder." It uses the income tax to prove its point. My reply was saying that using the income tax to prove the location of the burden, is misleading, if not totally inaccurate. What I was pointing out, was who it actually was that is paying the tax. I carefully emphasized the word "expected" (in reply#24), so as to prevent your confusion. You must have missed it.

For further clarity, I will however concede that I did not link my reply in #24 to #25 (as intended). Had I done so, it would have been clearer, that I was referring to percentage of individual incomes used to pay the tax burden. Sorry.

[A. Pole]

The article has nothing to do with property & business taxes.....so including them in your question is N/A.

That is what I was suspecting. This article is misleading by hiding the real tax burden which poor have to carry.

[A. Pole]

That would be double counting. The income taxes paid by the bread baker are already accounted for in the article (like those of everyone else in the country).

You are right. Baker already accounted for those taxes and included them in the price of bread which the poor person has to pay, so in this misleading article the burden will be credited to the baker.

[Principled]

Interesting... the national sales tax bill in Congress right now has 25 cosponsors.

Fundamental tax reform is at our doorstep.

[Lady Eileen]

bump

[Taxman]

You beat me to it.

Well said, my FRiend.

[jackbob]

...so in this misleading article the burden will be credited to the baker.

Superbly concise. No waste of verbage. Directly to the point.

Of course this does not apply in all cases (i.e. the incompetent). But as a general rule of thumb, it is the consumer who shoulders the burden of the taxes, with lower incomes paying a higher percent.

[SamAdams76]

Read my profile. I've been thinking along similar lines for years now.

[ancient_geezer]

This article is misleading by hiding the real tax burden which poor have to carry.

A picture of the Total Federal Tax rates paid vs gross individual income.

http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0:

Looking at the CBO table for Total Federal Tax Rates paid by individuals directly (income, payroll, & excise taxes) and indirectly as distributed through purchases, rent, etc.

Table 1. Preliminary Estimates of Effective Tax Rates by Income Category, 1977-1995 and Projected for 1999
Income Category	1977	1979	1981	1983	1985	1987	1989	1991	1993	1995	Projected 1999
Effective Total Federal Tax Rate (In percent of gross individual income)
Lowest Quintile	8.7	8.4	8.0	8.5	10.2	9.0	8.8	7.9	7.8	6.0	4.6
Second Quintile	14.7	14.9	15.0	14.2	15.5	15.2	15.3	15.1	14.3	14.6	13.7
Middle Quintile	18.5	19.2	19.5	18.2	18.8	18.5	18.9	18.9	19.1	19.7	18.9
Fourth Quintile	20.9	22.1	22.9	21.0	21.3	21.2	21.5	21.6	22.0	22.5	22.2
Highest Quintile	28.2	28.5	27.9	24.6	24.5	26.4	25.9	26.2	27.6	29.6	29.1
All Families	22.8	23.4	23.5	21.4	21.8	22.6	22.5	22.6	23.5	24.7	24.2
Top 10 Percent	30.7	30.5	29.0	25.2	25.1	27.6	26.8	27.2	29.0	31.3	30.6
Top 5 Percent	33.4	32.6	30.1	25.7	25.5	28.5	27.4	27.9	30.2	33.0	31.8
Top 1 Percent	39.7	37.3	31.7	26.9	26.2	30.2	28.1	29.1	32.5	36.5	34.4

[A. Pole]

thank you a lot!

Now is it possible to see the distribution of total tax burden including local and state taxes, sales taxes etc ... (Tax burden and government spending can be split through federal/local structure but the benefits and hardship are one thing.)

Is it hard to obtain?

[ancient_geezer]

I haven't found one yet, however, state taxes are about 1/3rd of total taxes paid and should be distributed proportionately with like tax modes of the Federal System.

The dominant difference being the distribution of state property taxes which have no equivalent in the Federal tax structure and FICA/EITC structure which is absent from the State tax systems.

Overall I would not expect to see much change in the overall distribution with respect to gross income, just a cross-the-board increase in rates for each gross income bracket.