Monday, October 1, 2012

Of the 47% and trying something else...


... because what we have now, just ain't working.

In 1992, a full 74% of Americans paid some amount of federal income tax. Twenty years later that number has plummeted to 47% so we were rather puzzled as to why everyone was going bonkers over Romney's "47%" remarks (oh, that's right - the man dared to open his mouth) which were ostensibly about a culture of dependency which has been cultivated by the statist-left of this country for a number of decades. From 74% to 47% in 20 years..? We're sorry - there's something wrong with this picture.

Evidently, an overwhelming majority of Americans are of similar mind as we. Here's Glenn Reynolds on some encouraging poll results that show that 79% of Americans* say their fellow citizens, regardless of their income, should be paying some amount of federal income tax:

These Americans understand instinctively what a recent report from the Tax Foundation said: "Aside from the revenue impact of not having 58 million Americans pay income taxes, economists worry about the social and political effects of having so many people disconnected from the cost of government — a phenomenon known as fiscal illusion. The concern is that when people perceive the cost of government to be cheaper than it really is, they will demand ever more government benefits because they either don't feel the cost directly or believe that others will be paying those costs. Indeed,when one takes into account those who do not file, about half of all households pay no federal income tax, making the situation particularly worrisome in a majority-rule democracy."

You've heard us use the term before but we cannot over-emphasize how much having skin in the game should count for things like health care and the services we receive for our taxes. You think Americans might pay a little bit more attention to bond initiatives and ballot propositions like, say, California high speed choo-choos when they realize that ridiculously butchered estimate of $68 billion is going to be coming out of their hide from both state and federal taxes? You think the term "low information voter" might, hopefully, become a thing of the past if everyone had skin in the game? We do.

It's time to do away with our current byzantine and progressive tax code. Our liberal friends don't think the rich are paying enough and we find it, yeah, we're totally going to highjack the left's own terminology for this context, "unpatriotic" that only 47% of Americans are paying federal income tax. No one's happy. It's not working. Time to scrap it and try something else.

We can probably be talked into a flat tax but what we've recently become intrigued by is the concept of a national sales tax to replace the income tax whereby the wealth you generate for yourself and your family is not taxed rather what and how much you consume. We think that's an idea that would have cross-over appeal to our liberal friends.

So, what do you all think? As alway, your comments are appreciated.

* This would mean that a significant number of that 47% think they themselves should be paying at least some federal income tax. Hmmmm...

1 comment:

Doo Doo Econ said...

With a nationa sales tax, all those wonderful groupings of tax payers would go away. It would be like commiting rhetorical genocide upon the left!