Sunday, March 14, 2010

An Nation of Tim Geithners? No Thanks!

From Don Surber:

If anyone wants to know why the federal government will outspend by nearly $2 trillion what it receives from taxpayers, Americans might want to look at the tax code, which allows more than 50 million workers — in good times — to get away with paying nothing to the federal government — in fact, in many cases, the government pays a negative income tax to them.

More than one third of the people with incomes in 2008 paid no federal income taxes, the Tax Foundation reported.

The actual number was 51.6 million — or 36.3%.

The taxes from these 51.6 million were less than zero — thanks to our politicized tax code — and they paid a total of negative $50.5 billion.
What it comes down to it that we have millions of citizens who enjoy all the benefits of citizenship without any the financial stake that comes with benefit.  The government uses the tax code not just to raise revenue to fund national defense or infrastructure but also to reward or punish behavior.  This often results in productive citizens footing the bill for non-productive citizens. 

I'm not a big fan of paying taxes but I accept that taxes are necessary.  But as someone who works in a credit union and sees some whopper tax refunds I can't help but resent it when I see refunds in the thousands of dollars go to people who pay nothing in to the system.

Surber loses me at the end of his post:

How much did you make? Pay the greater of $1,000 or 10% of your first $100,000 and 40% of anything over that.
Charging 40% for anything over $100,000 punishes productivity.  Taxes shouldn't have anything to do with earnings.  To be truly fair, taxes should be based on consumption not earnings.  Let's do away with income tax and have a national sales tax instead.  Everyone consumes, therefore, everyone would pay.

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