Wednesday, June 6, 2012

The Poor Should Share More Of The Income Tax Burdent

This article, by a conservative republican, tells us that republican's wrote the welfare bill that lowered the income tax burden for household below the poverty line.  Now they are complaining that the poor don't pay any income taxes.  The poor do pay the social security tax on all of their earned income.  The social security tax produces about the same amount of income as the income tax, and it goes into the same general revenue pot.  The government does not distinguish between social security revenue and income tax revenue when it pays its bills.  It makes no sense to make the distinction between the two sources of revenue.  The real difference between the two taxes is that the SS tax only applies to the first $108,000 of income.  The social security tax rate, therefore, falls as income rises above the ceiling.  A household with $216,000 of earned income would be taxed at half the rate of households with income below the ceiling.

The article also makes the point that republicans used to worry more about the large number of high income households that are able to avoid paying the income tax.  The number of households that are able to avoid the income tax has grown substantially.  That does not bother the republicans.  They have also lowered the tax on dividends, and the capital gains on stocks.  They just like the rich more than they do the poor.

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