Taxes and inequality
One of the arguments used in the recent debt ceiling talks – against raising taxes on the wealthy – is that 50% of Americans pay no taxes.
That is not true, all Americans pay payroll taxes, state taxes, capital-gains taxes, sales taxes etc…
The burden of taxation is evenly spread across income groups, set at 16% for the bottom earners and up to 31% for the top slice, including the top 1% of earners.
It is important to remember that the bottom 40% of the population owns less than 1% of the nation’s wealth while the top 1% owns 38% and the top 10%, an impressive 71%.
The fact that half of Americans pay no federal income tax is correct for three reasons:
– Low incomes account for half of the people who pay no federal income tax.
– Social Security is exempt from federal income taxes which accounts for 22% of the people who pay no federal income taxes are senior citizens.
– The third reason is that America uses the tax code to provide benefits to low-income families, particularly those with children. Taken together, the earned income tax credit, the child credit, and the childcare credit account for about 15% of the people who pay no federal income tax.
10% of the population own 3/4 of the nation’s wealth, the highest level of disparity in a century, this fact should be at the heart of the tax debate, not as a leftist point of view, but it is simply destructive to an economy based on consuming and credit.
Not raising taxes at the top or simply closing the loopholes that allow them to dodge and evade them also creates a lack of revenue, the right took the issue on the debt side with the left all too happy to follow suit – campaign donations time – while the main problem is revenue and the dollar velocity.