One of the most common complaints is how 47% of American households don't actually pay any income tax; because they make too little money or qualify for exemptions or credits according to current tax law. As Fox News, with their usual impartial charm, argued:
"Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it's simply somebody else's problem." Full story here.This has led to many right-wingers demanding that a 'flat' income tax be introduced. They argue that forcing the burden of taxation onto the rich is counterproductive, as the rich are the ones who apparently 'create jobs' and their wealth 'trickles down' to the rest of America eventually.
The right wing suggest that the rich and the poor should both pay an equal percentage of their income; sharing the burden equally despite this idea being completely idiotic.
There are dozens of reasons why introducing a flat tax into the American system would be an absurd idea; most notably the fact that America already has a 'stealth' flat tax.
MSN wrote an article back in 2007 that points out how - factoring in sales tax, state and township taxes and the rest of the myriad tariffs Americans are forced to pay - almost everybody in the country already pays a flat rate of about 40% in tax. Read the article here.
The second reason is slightly more complicated; based on the concept that not everybody's income is rated equally. Those on the lower end of the scale, earning $30,000 a year or so, find their unavoidable bills - like tax, groceries, gas and rent - chewing up as much as 70% of their income. Those making $300,000 a year will find the percentage of their income used to pay essential bills is much, much smaller - leaving them with a lot more disposable income.
To force poor and rich to pay an equal percentage of their income in taxes has a disproportionately negative effect on those making less. What might look like an 'equal' tax rate on paper would effectively be far, far higher on those with less disposable income, because it takes a much bigger chunk out of their effective income.
The third reason why the flat tax is a ridiculous idea attacks the concept behind it. The right wing argue that taxing the rich has a negative effect on the economy; as the wealthy 'create jobs' and their income 'trickles down' to benefit the rest of us. This is the notion behind 'Reaganomics' and is, essentially, a complete load of horseshit.
Giving tax breaks to poorer people will actually boost the economy more than tax breaks for the rich, because poor people are more likely to spend that money. Boosting the economy involves circulating the wealth back into the system. Giving tax breaks to the rich means that income is more likely to wind up sitting in a trust fund, a stock portfolio or a bank account. The rich already have more disposable income than the poor, so it's dubious to assume that giving them tax breaks would make them spend more.
Besides, there's a very convincing case to be made that the richest Americans don't pay nearly their fair share in taxes. Warren Buffett argues: "Frankly, an economy where my receptionist pays a lot higher tax rate than I do does not strike me as a just economy."
And while Republicans often deny it, evidence proves that the truly wealthy in America are already well-shielded against the taxation system. Exemptions, credits and 'breaks' provide lucrative ways for individuals and corporations to dodge what they're *meant* to be paying.
"The richest families in our country pay a lower tax rate than the people who take care of their children, or who teach in their schools, or who would put out a fire if their house were to start to burn," said Gene Sperling, spokesperson for think tank The Center for American Progress.
Another case in point? Exxon made $35 billion in profit during the latest gas crisis, but didn't pay a single penny in corporate tax in America last year.
Don't get me wrong - I'm no fan of taxation. One of the reasons I wanted to live in America was because a working couple could live within their means in the USA, whereas in the UK we barely made ends meet. I believe lowering taxes would have an enormous benefit on the economy (hence why Obama introduced a second tax refund to follow Bushes, which helped sustain the economy.)
However, I am a fan of everybody paying their fair share and this is just another example of the right wing attempting to shove the burden of taxation onto the middle and working class; who arguably pay more than enough already.