They may pay taxes at first ,but get money (more than they paid in taxes) back through earned income credit.
Therefore, are really tax free already. They're making money from the government by being low income.
The numbers you exampled would get them something like $1,500.000 in tax rebates even though they didn't even pay that much in taxes in the first place. It's "free" money back because they're "poor." It's a social program- type handout.
No, the EITC does not come anywhere near to the Taxes that poor people pay in Payroll Taxes. Try a 15.3% Tax Burden when you include both employee and employer Social Security Taxes -- with Income Taxes hitting pretty low on the bracket too, even with the Bush Tax Cut.
That's a real bite outta the low-income paycheck.
They're making money from the government by being low income.
Only those who collect Welfare.
The Low-income Worker is taking it in the shorts on Payroll Taxes.
The numbers you exampled would get them something like $1,500.000 in tax rebates even though they didn't even pay that much in taxes in the first place. It's "free" money back because they're "poor." It's a social program- type handout.
Actually, the Poor spend almost 100% of their money on Consumption, so all their Income would be Taxed under the NRST. By comparison, the Middle Class and Affluent invest some of their money (Investments are not Taxed under the NRST), and do not spend 100% on Comsumption.
So the Rebate "Tax Break" which accrues to the Poor is really just a measure to keep them from being over-taxed -- paying Taxes on the 100% of their income that they spend, versus more affluent households which do not spend 100% of their income on Consumption.
Cato Institute (Libertarian, and therefore no "friend" of Welfare) did a study on the HR 2525 NRST indicating that the "progressivity factor" (the amount of Taxes paid by Income Class) would be almost the same (within a couple of percentage points) as under the current Income Tax -- the Poor consume more of their income, but they get a Rebate, etc. Half a dozen of one, six of the other.
The difference being that Companies save tens of billions on Payroll Tax compliance, and Individuals save hundreds of billions on Income Tax compliance... the amount of productive man-hours saved under the NRST, versus the Income Tax, is almost mind-boggling.
Not to mention the fact that the friendly IRS man no longer comes to your door and riffles thorugh your personal files.