Politics: 16 April 2011 at Frankly CuriousFrankly Curious

My Taxes Are Too High!

I just wrote a check to the IRS for just under $2000 for my 2010 income taxes. This seems like a lot, when you consider that I only made about $20,000 last year. And that’s just the income taxes; I’m not talking about state and local taxes or payroll taxes or sales taxes (9.25% where I live). The great David Cay Johnston has written a wonderful article for Willamette Week called 9 Things the Rich Don’t Want You to Know About Taxes. You really should read it, but here is the list:

1. Poor Americans do pay taxes.: This is one of the most galling lies that I hear coming out of Faux News. It just isn’t true and no one can really think that it is. Does Gretchen Carlson really think that when a poor person buys a bottle of Windex at Safeway, the clerk doesn’t charge sales tax? Of course not. But then, I don’t need to remind any reasonable person that the people of Faux News are evil, stupid, dishonest or all of the above.
2. The wealthiest Americans don’t carry the burden.: If you make over $106,800 per year, you stop paying social security tax. By the way, getting rid of this limit is my preferred way to fix Social Security—even though there is really very little financial problem with the program anyway.
3. In fact, the wealthy are paying less taxes.: The median worker pays 23.4% of his income in taxes; the top 400 earners pay (Wait for it!) 18.7%. That’s 25% less than we working slobs.
4. Many of the very richest pay no current income taxes at all.: How can this be? Well, suppose you own a baseball team. You will only pay income tax on it if you sell it. So you don’t sell it. You borrow money against it (at ridiculously low interest rates) and thus you don’t have to pay any taxes. Just do this until you die.
5. And (surprise!) since Reagan, only the wealthy have gained significant income.: In the last 30 years, the median income in the US has stagnated. But the mean income has skyrocketed!
6. When it comes to corporations, the story is much the same—less taxes.: One word: loopholes.
7. Some corporate tax breaks destroy jobs.: You’ve got to read what Johnston has to say about this. Basically, low corporate tax rates increases unemployment. This may sound impossible, but it’s true.
8. Republicans like taxes too.: Say it ain’t so! But it’s true. It is just that they like to tax the poor.
9. Other countries do it better.: This is an excellent section where he points out that countries like Germany tax at a much higher level, but it is fairer and people actually get something for their taxes. Personally, I don’t like the fact that %20 of my tax dollars go to fighting wars I don’t believe in. It is also interesting that I am always hearing people complain that we give so much money to other countries in aid. We don’t. We give less than 3% of our budget in international aid, and most of that is prid pro quo. Almost all of our “aid” is in the form of bombs. Personally, I’d rather be alive and forsake that 20% “aid.”