The Tax Trap
July 21st, 2008 by 
reality
Some 2006 data. The lowest 50% of earners paid only 3% of total income taxes (although they have 12% of total income). This is why people vote for more spending and big government. Half of them are not paying anything, for all practical purposes. This is the argument for a flat tax, and why it is so strongly resisted by government. It gives voters an incentive to keep government spending under control.
Posted in The Fisc | 
July 22nd, 2008 at 6:55 am
No offense, but the whole “total income tax” argument is a straw man. Social security and medicare taxes are general revenue taxes and they comprise a significant tax to the lowest 50% of earners. Politicians have not wanted to call these programs what they are - welfare. Warren Buffet is accurate in saying that his marginal tax rate is higher than his secretaries due to this factor. I agree that a flattened tax structure is the way to go, but many on the right (which I am not saying you are a part of…because I don’t know!) refuse to accept that this will likely result in HIGHER taxes for higher income earners.
I would personally LOVE to see spending cut and entire federal departments eliminated, but the practical reality is that with a democratic congress and the “best case” being a McCain presidency, it is most likely that spending will continue to grow. The budget situation is so horrendous that taxes will be heading up regardless of who is president.
July 22nd, 2008 at 7:53 am
Source of data? Didn’t see a link. Thanks in advance.
July 22nd, 2008 at 12:16 pm
http://www.irs.gov/taxstats/indtaxstats/article/0,,id=129270,00.html#_article
July 22nd, 2008 at 2:04 pm
Interesting angle. Is there any evidence that politicians understand how progressive tax works for them? I wonder if it is true that flat tax countries have lower spending.