The Associated Press has an article on federal income taxes and the fact that about half of Americans don’t pay them.
About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That’s according to projections by the Tax Policy Center, a Washington research organization.
. . .
In recent years, credits for low- and middle-income families have grown so much that a family of four making as much as $50,000 will owe no federal income tax for 2009, as long as there are two children younger than 17, according to a separate analysis by the consulting firm Deloitte Tax.
As usual, I have mixed views here. On one hand, I think taxes have civic virtue. Paying them makes everyone invested in the community to some extent – sort of a pride in ownership effect. On the other hand, in political discourse these days, some folks have almost made a fetish out of the federal income tax, as if it’s the only sort of tax that matters. You’ll routinely hear a wailing and gnashing of teeth about how so, so many poor people (subtext: freeloaders) “don’t pay any taxes.” If you push, you’ll get a concession that it’s federal income taxes they don’t pay.
The people not paying federal income taxes are often paying other sorts of taxes: sales taxes, payroll taxes, property tax, user fees, excise taxes, etc. But, for whatever reason, those don’t count.
And, it’s no accident that the federal income tax soaks the rich. That was pretty much its entire purpose. The 16th Amendment allowing the income tax came from the socialists and the progressives agitating for a graduated income tax. And there is some justification to the disproportionate share of taxes paid by the wealthy. The wealthiest 25% of Americans control something like 87% of the country’s wealth. And, contrary to what we’d like to believe about ourselves, wealth (not that I have any great deal of it personally) isn’t solely (or even, arguably, primarily) a function of hard work and ingenuity.
A lot of it has to do with the system into which we were born – Gates simply wouldn’t have made his billions if he were born and raised in Somalia. And, apart from the system, there are obviously advantages to the particulars of one’s family and the like. I don’t spend a lot of time worrying about this sort of “unfairness.” But, it doesn’t seem unreasonable to require the prime beneficiaries of a system to do the lion’s share of funding it.