This
article is about the impact/effect of the current tax form in the States. It states
that nearly half of U.S. households end up owning no federal income tax. A
result from the tax breaks by both Democrats and Republicans, and the fact that
the U.S. tax code is progressive. It is said that over the years, lawmakers
have enacted reams of tax breaks, such as tax credits for work, kids and
education. Therefore, the number of non-payers is increased. According to
Robert Greenstein, president of the liberal Center on Budget and Policy
Priorities, the major reason for the lawmakers to approve temporary tax breaks
is that they want to stimulate the economy after the 2008 financial crisis. The
tax Policy Center estimates that 46% of households will end up owing nothing in
federal income taxes for the tax year of 2011. Greenstein added that, the
percentage was closer to 40% before the recession. The Zero Tax Club includes some
very high-income households. Nevertheless, it is made up disproportionately of
low- and lower-middle-income households.
On
the other hand, if payroll taxes are counted, the number of non-payer households’
drops precipitously, it is estimated 18% in 2011. It is because payroll taxes
fund the entitlement programs, and it hits low-income households harder than
most; 100% of the low-income households’ income is subject to the payroll
taxes. At this point, high-income filers pay a lower percentage of their income
in payroll taxes since wages subject to the Social Security tax are capped at
$110,100. In addition, according to Roberton Williams a senior fellow at the
Tax Policy Center, most of those 18% of households that owe neither federal
income nor payroll taxes are elderly or had income under $20,000. But, they
still end up paying something in taxes, such as sales taxes, state and local
income taxes. From this perspective, virtually, no household in America would
qualify for the non-payer group.
As
tax is always one of the heated topics concerning an economy system, people
have various opinions and estimations on the tax policies. Therefore, it is
hard to say what polices are the best or most suitable ones to the economy.
Trials and errors are inevitable.
5 comments:
I believe the economic recession definately has had some influence people willingness to pay tax. The increased part of unemployed people also would not willing to pay their tax.
I always wonder how some top income earners pay no tax at all - unless they donate everything they earn to charity, they're basically exploit the system. I think that fairness in taxes, whether it's "progressive," or "proportional," has to mean that people cannot cheat the system and avoid taxes while they're earning so much and giving back so little.
I don't think we have a tax issue. If we would check the data. the UNITED STATES is at a tax moral (people's willingness to pay taxes) of about 45% which DOMINATES all other countries. If you think it is bad here, go over to Greece.....
While I agree with what you are saying Frank, I don't think the argument "that it is worse somewhere else, so don't complain" is very valid. We can still strive to improve the equity and fairness of our tax system even though it is has some of the highest participation in the world.
Just by donating tons of money to charity doesn't mean you pay no taxes, I'm assuming it has to do with capital gains tax. Warren Buffet pays less in capital gain than his secretary does in overall taxes, and Buffet makes TONS of money. It's a way for the rich who would normally have to pay plenty of money in taxes circumvent the system. There isn't a billionaire out there that plans on paying their taxes in full, so who's to say a progressive system will work?
Post a Comment