1. Is tax fairness possible?

2. Why does the federal government need our money?

An answer to #1 is at http://rodgermitchell.com/FairTaxes.html

The answer to #2 is: It doesn’t.

Rodger Malcolm Mitchell

Problems I see:
– The share of taxes paid categories in red do not match the income tax unit categories, so there is much less correspondence between the left chat and right, I assume that they just used the $ income estimate to place the % taxes divider but that doesn’t necessarily line up with the volumes on the right.

- What do the Green volumes represent. I assume people, but maybe not.

- Share of taxes vs. number of people is meaningless, since the top 1% make oddles more than the bottom 90%, this chart should show % of income taxed, and should include all taxes if possible, as well as return on capital (investment income) and return on labor (salary, etc.).

- I really don’t understand the percentages on the left side, I’m assuming its an aggragate of population from the top down, but it’s unclear.

I suspect that this chart was put together to make some point, but it is lost on me.

1) Due to the hijinks that the federal government has been playing for decades (Al Gore proposed to end this, and was pilloried by the kool kids krowd as advocating a “lockbox”), payroll taxes are funding a lot of our actual expenses. The entire Social Security “crisis” is because this imaginary pot of money that’s supposed to finance SS payments as Baby Boomers and Gen X retire doesn’t exist, instead replaced by a bunch of IOUs. As pointed out by many, payroll taxes are very regressive and constitute the bulk of taxes on income for most Americans.

2) For the truly rich, they don’t make their money through income, but rather through capital gains. Hence Warren Buffett’s claim that he pays half what his secretary does.

3) When you add in sales/consumption taxes and other types of fees/licenses/etc. that are either based on consumption or fixed fees, these add to the regressive nature of our tax system. Utility taxes or sales taxes or drivers license fees aren’t much for most of us, but for those who are making $75k a year, it makes up a much higher percentage of their income.

The whole “let’s pretend that the tax system is unfairly progressive by focusing only on federal income tax instead of at the entire taxation scheme” was an oft-used tool of the VRWC in the 1990s, but I thought it had been killed by its own inherent stupidity and a slew of studies showing that the overall tax burden has become regressive in this country, as we’ve shifted away from relatively transparent income taxes to more opaque revenue generators like sales tax, use taxes, lotteries, etc. Apparently I was wrong.

http://www.ritholtz.com/blog/2009/08/rally-time-items-to-watch/#comment-207591

Somewhat tounge in cheek, but true. Dumb man’s tax or not, if I have a college degree with honors from a top 10 public university (helped along by this money) and still might not be able to find a job to cover my expenses, who is the “dumb” one. As somebody said above, the money comes and goes to the top regardless. Taxation is very much a moot arguement in our capitalistic fiat currency system. Bottom line, learn skills that are in demand, spend less than you can make, and prepare for the ups and downs of fortune.

if you worry so much about paying taxes, take a pay cut and join the bottom 50%. not paying taxes will be the least of your worries.

http://www.nola.com/news/?/base/news-1/1239081731120020.xml&coll=1

From IRS data: http://www.taxfoundation.org/research/show/250.html

“The top-earning 25 percent of taxpayers (AGI over $66,532) earned 68.7 percent of the nation’s income, but they paid more than four out of every five dollars collected by the federal income tax (86.6 percent).”

Also, note that in 2007, the bottom 50% paid just federal taxes that comprised a mere 2.9% of total federal taxes paid that year. That is absolutely ridiculous.

Basically the bottom 50% pay no taxes, while the top 25% cover pretty much everything.