There seems to be word on the street that the White House is demanding big tax hikes from the Republicans as part of a budget deal.
I would like to put my case for increased taxes. Let us increase the number of taxpayers.
As we know, the percentage of taxes paid by the top 1% and top 10% of taxpayers has been going up for the last two decades. For those in the 25% to 50% grouping paying taxes the percentage paid has been going down. At some level that is OK with me. The outcome is that the top 10% of taxpayers pay about 70% of the taxes. Given that we have a progressive income tax, that may not be unfair.
What I am worried about is that about half the potential taxpayers don't. I would think that for our system to work, near everyone who votes should be paying some visible tax, even if it is just 1% or even 0.1% of income. If you make $20,000 pa, could you not pay a tax of $200 or even $20 every year? That way you are a full participant in a system that decides how much money will be spent and in which ways.
One of the reasons I am strongly against a VAT (Value Added Tax) is its invisibility. The value added tax too easily recedes into the background of the economic noise and people soon don't "feel it" the way they do paying their income tax by the 15 April deadline after filling out the appropriate paperwork.
I am not for dropping the Earned Income Tax Credit. While it is extra paperwork for the taxpayer, the fact that they see at the bottom of their 1098 that they have paid an income tax to Uncle Sam is what I am looking for. Such a move will not bring in a lot of money, but it will cause the 535 folks on Capitol Hill (536 including the VP) to think about the fact that even more voters now see themselves as taxpayers and that those new taxpayers will see the folks on Capitol Hill as guardians of their (the taxpayer's) money.
Regards — Cliff
1 year ago