Friday Follies...
Okay boys and girls, we made it to another weekend, and here in the Heartland of America, we've seen both record high temps as well as lake-effect snow flurries. Talk about a roller coaster ride, hmm?
But today, we're going to get your 72 hours of "weekend" off to a flying start with something I wanted to talk about ever since I read it in the papers and heard it on the radio talk shows. (Glenn Beck and Rush Limbaugh had fantastic progrms devoted to it)This story hits a bit closer to home for me, because I used to work for our wonderful U.S. Treasury Department (IRS Division), so those of you who already detest the IRS, don't hold anything against me personally.
I was just another cog in the massive machine, OK?
And I have a conscience...that's why I left, but that's another tale for another time...
If you haven't read about this yet, all of you taxpaying Americans should, so here it is, straight as it appeared from the AP:
(( 47% of homes avoid income tax
Stephen Ohlemacher - Associated Press
WASHINGTON – Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it is simply somebody else’s problem.About 47 percent will pay no federal income taxes 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.
Most people still are required to file returns by the April 15 deadline. The penalty for skipping it is limited to the amount of taxes owed, but it’s still almost always better to file: That’s the only way to get a refund of all the income taxes withheld by employers.
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.
Tax cuts enacted in the past decade have been generous to wealthy taxpayers, too, making them a target for President Obama and Democrats in Congress.
Less noticed were tax cuts for low- and middle-income families, which were expanded when Obama signed the massive economic recovery package last year.
The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners – households making an average of $366,400 in 2006 – paid about 73 percent of the income taxes collected by the federal government.
The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.
"We have 50 percent of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.
The vast majority of people who escape federal income taxes still pay other taxes, including federal payroll taxes that fund Social Security and Medicare, and excise taxes on gasoline, aviation, alcohol and cigarettes.
Many also pay state or local taxes on sales, income and property.
That helps explain the country’s aversion to taxes, said Clint Stretch, a tax policy expert Deloitte Tax.
He said many people simply look at the difference between their gross pay and their take-home pay and blame the government for the disparity.
"It’s not uncommon for people to think that their Social Security taxes, their 401(k) contributions, their share of employer health premiums, all of that stuff in their mind gets lumped into income taxes," Stretch said.
The federal income tax is the government’s largest source of revenue, raising more than $900 billion – or a little less than half of all government receipts – in the budget year that ended last Sept. 30. But with deductions and credits, especially for families with children, there have long been people who don’t pay it, mainly lower-income families.
The number of households that don’t pay federal income taxes increased substantially in 2008, when the poor economy reduced incomes and Congress cut taxes in an attempt to help recovery.
In 2007, about 38 percent of households paid no federal income tax, a figure that jumped to 49 percent in 2008, according to estimates by the Tax Policy Center.
The changes made it relatively easy for families of four making $50,000 to eliminate their income tax liability.
Here’s how they did it, according to Deloitte Tax:
The family was entitled to a standard deduction of $11,400 and four personal exemptions of $3,650 apiece, leaving a taxable income of $24,000. The federal income tax on $24,000 is $2,769.
With two children younger than 17, the family qualified for two $1,000 child tax credits. Its Making Work Pay credit was $800 because the parents were married filing jointly.
The $2,800 in credits exceeds the $2,769 in taxes, so the family makes a $31 profit from the federal income tax.
That ought to take the sting out of April 15. ))OK, now that your morning beverage of choice has switched from coffee or tea to HARD LIQUOR (over this), let's take a closer look at the story, shall we?
Now, we have close to FIFTY PERCENT of the people NOT paying ANY income taxes, due to all these (wonderful) "deductions".
And that seems all well and good, right?
Always nice to "ZERO-OUT" when figuring your tax "burden", isn't it?
Well, it's not ALL sunshine and lollipops.
The money the government was "supposed" to get, has been eliminated by the deductions that THEY have put in place to help "some", while basically screwing the REST of the people.
And you have other "families" that are gaming the system to the point where they DO, in fact, get something for nothing (who said America wasn't still a cool country to live in?), simply by not working and still having kids.
That tends to overburden a fragile system and drive more and more INTO poverty, instead of away from it and into self-sufficiency, does it not? Rewarding those who choose NOT to work,but instead RELY on everyone else as well as the government, doesn't help the REST of us one damn bit, does it?
And since the government is NOT getting income tax from the non-working stiffs, their total revenue tends to "wither on the vine", as it were. That leaves this huge HOLE in the treasury that needs to be FILLED...by everyone else, and it looks like those who DO pay their taxes are paying more (my Dad used to gripe about this a lot, and now I know why).
Of course, these people that pay NO income tax are taxed ELSEWHERE, like with SALES TAX.
"But Bob, aren't the REST of us who are working ALSO paying that tax?"
(good question)
Right you are, and you're also paying taxes on much of your SAVINGS.
I used to call it the "triple-dip".
Your PAY gets taxed, everything you BUY gets taxed, and the money you SAVE in a bank gets taxed...
That's one helluva "taxing" situation, eh?
Almost makes one want to go "on the dole" to avoid that INCOME TAX, doesn't it?
Now, I mentioned earlier this week, that in MY part of Fort Wayne, (the ghettohood), it was stated that the SOUTHEAST part of town has the 2ND HIGHEST level of DISPOSABLE INCOME (aka BUYING POWER) in the entire city!
And the vast majority of these people DO NOT WORK...or even want to.
But, they DO have kids...lots of kids, which perpetuates this cycle of dependency upon the government, as well as increases the output of revenue TO those people, while taking from those who ARE paying into the system as required by law (dumb as that law is).
One can only guess as to how long this can operate, because we all know that ANY program our federal government undertakes is destined to COST...a LOT...seemingly forever, too. Nothing ever seems to get REPEALED.
You can toss stimulus money around until the cows come home, and THAT will never ease the tax burden on those who work and are paying the taxes for the others who sit back, suck down orange drink and munch on "hot fries" all damn day, will it?
And whatever taxes these (non-productive) people that comprise this 47% DO pay are the same ones YOU have to pay as well (as well as paying for them).
Granted, there are cases where certain people can honestly be "excused" from income tax payments, such as disability cases, the elderly, and so on.
But these people are not the majority of that 47%, are they?
Disabled or elderly people are not cranking out kids as tax deductions, are they?
Those people are aided by the government for the RIGHT reason...they can't fend for themselves, and would IF they could.
This administration would have us see more taxes to those that CAN pay them, and I'm sorry, but that's simply NOT fair.
It's time the government realized that no matter HOW HARD you squeeze, blood isn't coming out of that stone (the taxpayers) anytime soon. Time to wake up and return to reality.
Those that choose to "play the system" need to start being responsible, as well as being HELD responsible...period.
And if ANY changes are to be made that will help the already over-burdened taxpayers of this nation, as well as the country's coffers, it's to make sure that (as the All in the Family theme goes) "Everybody pulls their weight".
If you don't WANT to, fine...find another country to leech off of.
America has been rooted in people that knew what sweat, and toil was all about.
The immigrants that came through Ellis Island were more than willing to pull MORE that their weight, because America was a GREAT nation to come to and start over with a mere CHANCE to live free and become successful.
(talk about a leap of faith there)Isn't it time to get some of that (former) greatness BACK again?
Isn't it time to bring fairness back into play for everyone concerned?
I'd like to think so, because the path we're currently on is leading to a very high cliff.
And woe to us and this nation, lest we be led past that precipice.
The view might be breathtaking, but that first step is a doozie.
Have yourselves a great weekend, be well, make a difference today, and, as always...
Stay safe out there, America.