So Mitt Romney put his foot in his mouth at a fundraiser when he said 47% of Americans don't pay tax and won't vote for him because it does not matter that he is going to lower taxes.
Here are some things I am dumbfounded about in America. Thanks to groups like the Tax Policy Center (which is fairly non-partisan), here is what we know about Americans paying taxes:
1. 76 million Americans did not pay federal income tax last year. That seems like a lot of people to me;
2. Of the 76 million Americans who did not pay taxes, 50% of them do not pay tax because their actual income is low. It seems to me that you should not have to pay tax if your real income is very low;
3. About 5% of these 76 million Americans - something like 430,000 people - earn between $50,000 and $100,000 and pay NO federal income tax. This makes NO sense to me. And by the way, I am one of these 430,000 people;
4. Of the 430,000 people, approximately 4,000 of them have more than $1 million in income and still pay NO income tax. This makes even less sense than point #3;
5. A whole lot of the 76 million Americans do not have to pay taxes because of those wonderful things called "tax loopholes." Some biggies include: earned income tax credit (12 million people), tax credit for college expenses (I like that one!), mortgage interest deduction, charitable giving deduction, etc. etc.;
So here is my thought: A while bunch more Americans need to be paying taxes and that money needs to reduce a MEGA debt that we have.
Some of my simple conclusions:
- People who earn a lot of money need to pay a bit more (like if you make over $250,000). But please, let's not be naive and think this will solve everything!
- People who earn $50,000 to $250,000 also have to pay some more. So, Mr. Romney and Mr. Obama, PLEASE stop talking about middle class tax cuts. It may get you elected but it is just makes no sense.
- And, we all need to suck it up and ditch many of these "sacred cow" tax loopholes. I'm the first to admit that it will be like pouring lemon juice on a paper cut for me, but it's part of the "shared sacrifice" value that seems to be blatantly absent in this political season.
Thus is my political rant for today.
Here are some things I am dumbfounded about in America. Thanks to groups like the Tax Policy Center (which is fairly non-partisan), here is what we know about Americans paying taxes:
1. 76 million Americans did not pay federal income tax last year. That seems like a lot of people to me;
2. Of the 76 million Americans who did not pay taxes, 50% of them do not pay tax because their actual income is low. It seems to me that you should not have to pay tax if your real income is very low;
3. About 5% of these 76 million Americans - something like 430,000 people - earn between $50,000 and $100,000 and pay NO federal income tax. This makes NO sense to me. And by the way, I am one of these 430,000 people;
4. Of the 430,000 people, approximately 4,000 of them have more than $1 million in income and still pay NO income tax. This makes even less sense than point #3;
5. A whole lot of the 76 million Americans do not have to pay taxes because of those wonderful things called "tax loopholes." Some biggies include: earned income tax credit (12 million people), tax credit for college expenses (I like that one!), mortgage interest deduction, charitable giving deduction, etc. etc.;
So here is my thought: A while bunch more Americans need to be paying taxes and that money needs to reduce a MEGA debt that we have.
Some of my simple conclusions:
- People who earn a lot of money need to pay a bit more (like if you make over $250,000). But please, let's not be naive and think this will solve everything!
- People who earn $50,000 to $250,000 also have to pay some more. So, Mr. Romney and Mr. Obama, PLEASE stop talking about middle class tax cuts. It may get you elected but it is just makes no sense.
- And, we all need to suck it up and ditch many of these "sacred cow" tax loopholes. I'm the first to admit that it will be like pouring lemon juice on a paper cut for me, but it's part of the "shared sacrifice" value that seems to be blatantly absent in this political season.
Thus is my political rant for today.
Planet Money (http://www.npr.org/blogs/money/) from NPR has done a couple of great podcasts on election promises no politician will ever make, but could actually solve the US Debt issue. I remembered it distinctly, as they too supported removing the mortgage interest deduction. (We have that in Australia, but only for investment properties, not owner-occupied)
ReplyDeleteThe original list can be found here:
http://www.npr.org/blogs/money/2012/07/19/157047211/six-policies-economists-love-and-politicians-hate
Note that these are generally supported from a team of economists from across the political spectrum.
Back here in Australia, the Queensland Government is shedding public service by the thousands, in an attempt to get its debt under control. I don't believe austerity is the whole solution, but in places its certainly needed.