by Tina Grazier
Beware the taxing politician that promises to tax the rich….
The personal income tax, brought courtesy of the 16th Amendment, also promised to be a tax on the wealthiest Americans. It began in 1913 with a top rate of 7% and hit only those with a taxable income of $500,000 or more. (According to the Bureau of Labor Statistics inflation calculator, that would be $11.5 million now.) Today, roughly half of American families pay the personal income tax.
The fact is we have let our government grow to gargantuan size. As the GSA scandal of waste posted by Jack today demonstrates, the people that are charged with using our tax money wisely are instead wreckless. If that isn’t bad enough this group also partied and played while the rest of us toil to pay for their lavish salaries, vacations and perks.
I wish we had a handy device that would instantly calculate the total amount of taxes and fees we pay each year. Here’s a partial list:
Federal Income tax, state tax, sales tax, user tax, property tax, phone and utility taxes, gasoline tax, cigarette and booze tax, car registration, bike registration, car license, boat license, boat registration, trailer registration, business license, corporate filing fees, occupational lead poisoning prevention fee, alarm users fee, local business license, capital gains tax, building permit tax, California redemption tax (cans and bottles), ammunition tax…..and on and on until the final insult…death tax! On top of these taxes and fees Americans also spend hundreds to thousands each year in fees to professionals to advise us or help us comply.
Go here for a longer list (202) of tax and fee categories.
My head is swimming and I’m wondering…how do people manage to eat, pay their rents and get to work? How do they manage to put clothes on their backs and braces on their kids’ teeth? Seriously…with all of the taxes we are required to pay, week after month after year, is it any wonder we end up with too much month left over at the end of our paychecks? Is it any wonder the government worries that the middle class isn’t getting ahead and the poor are stuck in poverty? The harder we work the more they think they are entitled to take what we earn!
And here’s another unsavory aspect to the taxes deal…are you listening? Could it be any clearer that many of those who demand and support big expensive government are the highly paid bureaucrats (tax money) with huge benefits (tax money) and pensions (tax money) who manage and spend ever increasing budgets (tax money) as well as folk like school administrators/professors/teachers (tax money) that unite behind and fund campaigns to elect big government bureaucrats who will create more expensive programs (tax money) requiring even more government employees(yep, more tax money)?
Americans are unhappyand exhausted. We’re unhappy with the size of government AND with the tax code. American.com has a report on the many ways that unfairness is built in to the tax code:
While the number of tax returns filed jumped from 107 million in 1987 to 140 million in 2009, the number of taxable returns actually fell from 87 million to 82 million.
…tax breaks for particular activities or goods not only lead to wild disparities in tax burdens among similarly situated taxpayers, but also distort consumer choices and impede economic efficiency by misallocating resources. And the resulting convoluted tax code is nearly impossible to navigate without specialized expertise.
A poll conducted by Gallup found that Americans think at least half of every dollar they send to government is wasted. HALF!
Our schools are cash strapped for many reasons. A very bad economy, high unemployment, and a destroyed housing market have slowed revenues, and therefore funding for schools, to a trickle. In 2009 the IRS reported a plunge in tax revenue:
Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago — the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says.
When the economy slumps, so does tax revenue, and this recession has been no different, says Kerry Lynch, senior fellow at the AIER and author of the study. “It illustrates how severe the recession has been.”
For example, 6 million people lost jobs in the 12 months ended in April — and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago.
The CBO reported a slight improvement in revenues in 2011 but government spending and borrowing mean we are still digging a deeper and deeper hole.
Perhaps it’s time to reconsider the size of government rather than doing the same thing we’ve been doing since 1913, raising tax rates and fees on hard working Americans and the people who employ them.