A Letter from Rhino Reader Thomas L. Knapp
The deadline for filing US federal income tax returns falls (usually) on April 15, a date that’s worked its way into the American vocabulary as “tax day.” That’s really not a very accurate term.
For one thing, most Americans pay all sorts of other taxes (sales taxes, excise taxes, property taxes, etc.) all the time. You can’t swing a cat without hitting a tax … and there’s probably a tax on swinging cats, which I recommend against doing for all kinds of reasons other than potential tax implications.
For another, most Americans pay federal income tax year-round through withholding from their paychecks (or quarterly “estimated” payments). April 15 is just the day when the government demands that you do their paperwork for them to make sure they took as much as they wanted to take from you last year.
And even when you’re not paying up front, you’re still getting taxed.
Last year the federal government took $5.2 trillion directly from US taxpayers, but spent $7 trillion. Congress borrowed that extra $1.8 trillion, promising their creditors that, sooner or later, they’ll get the money, plus interest, out of you or your descendants. It’s still tax, just with payment temporarily deferred.
Not all taxes fall on all Americans evenly, of course.
Because federal income taxes are “progressive,” the top 20% of American earners pay 66.1% of federal taxes, while the bottom 20% of earners pay 0.8%.
State and local sales taxes are, for the most part, income-neutral, but the poor end of the spectrum gets hit harder as a practical matter because they spend more of what they earn to get by, while the wealthier save or invest larger percentages of their own incomes.
Social Security taxes? They’re “regressive” because of lifespan — working class black males, who die younger, subsidize the retirements of middle class white women, who live longer.
Speaking of dying younger and living longer, that’s what taxation is really all about: Draining your length and quality of life to keep government going and make it ever more powerful.
It’s no more complicated than that, no matter how much garbage propaganda you’re fed to justify it.
Taxation isn’t about “helping the poor” or “defending the country” or any other supposedly good cause. It’s about taking money out of your pocket (which to some extent means taking food out of your mouth) and putting it into politicians’ hands. That’s all it’s ever been about.
So happy tax day, I guess.
Thomas L. Knapp
Just to add a complete picture….The top 20% of income earners earn 52.2% of total income and pay 66% of taxes and the bottom 20% income earners only earn 3% of total income and only pay 0.8% of taxes. It’s not as dramatic when view this way in my opinion.
This of course only includes income taxes. Lower income people pay 3x to 4x as much of their earnings on consumption taxes versus the upper income brackets.
So yes, income tax is progressive, but consumption taxes are regressive. Does that even it out?….not really, but the system seems to work until you get to the upper 1% where their ‘income’ is more easily hidden from taxes and therefore, they are often accused of not paying their fair share. Since they ‘hide’ their income, it ‘looks’ like they pay more than their fair share but that is the scam that has allowed the wealth divide to grow out of control in this country.
Right now, I suggest the bigger concern is the growing percentage of taxes required to pay the national debt. Currently, we pay ~$7,500 per year per working household just to service the national debt. Dramatic spending cuts plus tax increases on the upper income levels and corporations are going to be required to solve this growing problem. The only question is when.
Cutting taxes and increasing spending isn’t the solution.