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Should we all pay more taxes?

Would it be wrong to expect the middle class to pay higher taxes to help reduce the federal debt?

By Karen Datko Jan 8, 2013 4:22PM

Image: Taxes (© Thinkstock/SuperStock)If I had a dollar for each time I've heard someone say that we're burdening our kids and grandkids with a huge federal debt -- Rick Santelli's recent rant about "all kids left behind" should count for a lot -- I'd happily give that money to the U.S. Treasury.


I'd be in good company. Last year righteous Americans donated a record $7.7 million -- over and above their tax bills -- to cut the nation's debt, CNN says


It could use some help. With the federal debt at $16.4 trillion, the Congress has racked up a big stack of IOUs, which means we all owe this. You may disagree about how essential it is to reduce this large amount immediately, but we can all agree that the interest on the debt -- $220 billion in 2012, says U.S. News & World Report -- could be better spent elsewhere.


For whatever reason -- lack of political will is at or near the top of the list -- the president and Congress decided as part of the so-called fiscal cliff pact to raise income and investment taxes only on those making more than $400,000. (I'm not counting the 2% increase for payroll taxes for Social Security, which nearly every worker will pay. It was generally understood that the payroll tax holiday was a temporary stimulus measure that would end.)


Now President Barack Obama is talking about closing tax loopholes that favor the wealthy, as the next phony crisis -- votes on raising the debt ceiling and automatic and drastic spending cuts put off by the fiscal cliff deal -- approaches. Others believe the solution should be drastically shrinking the size of government.


Now, if you read personal finance blogs, you know that reduced spending is only part of the solution for restoring fiscal sanity in a household overwhelmed by debt. The other half is raising revenue. And that's where all the rest of us come in. Wouldn't a modest tax increase on the middle class -- not just the wealthy -- help the country? Surely more households could be taxed a little more without triggering another recession.


The idea surfaces from time to time but is hardly heard above the din of so many complaining about their tax burden.


"But in fact, most Americans in 2010 paid far less in total taxes -- federal, state and local -- than they would have paid 30 years ago," reported The New York Times in late November. "According to an analysis by (the Times), the combination of all income taxes, sales taxes and property taxes took a smaller share of their income than it took from households with the same inflation-adjusted income in 1980."

Since 1980, state and local taxes increased while federal income tax rates declined. If it doesn't feel that way to some old-timers, there's a reason. Adds The Times, "The average American in 2010 paid 30% more of income in payroll taxes (for Social Security and Medicare) than in 1980, even while paying 27% less in federal income taxes."


The Times says that those making more than $200,000 a year were the biggest beneficiaries of federal tax cuts over the years. But others with lower incomes also gained, so isn't it fair that more of us should pony up now?


Among those who agree are:

  • New York City Mayor Michael Bloomberg, who suggested in 2011 that the Bush tax cuts be allowed to expire across the board.
  • Former U.S. Senator (and NBA star) Bill Bradley, who said last summer on CNN, "The deficit is one problem (we face) -- and that requires taxes on a lot of people, not just the wealthy."
  • Wrote David Callahan, a senior fellow at Demos, at the end of November:

"Only 13% of voters earlier this month agreed that income taxes should go up for everyone, according to exit polls. And only 33% agreed that taxes should be raised to help tackle the deficit.


"Now, it would be one thing if all these Americans against higher taxes also wanted to see spending cuts. But, of course, that is not the case."

He proposed that all the Bush tax cuts be allowed to lapse on Dec. 31. Then Congress could vote to extend them for other than the rich only long enough to get through the economic recovery.


If the Bush tax cuts had been allowed to expire for everyone, that would have raised federal revenue by $4 trillion over 10 years. The last federal budget was $3.7 trillion, with a deficit of $1.1 trillion. Letting the Bush tax cuts die would have helped fill the gap that's now being paid for with borrowed money.


What do you think? Should middle-class taxpayers share more of the tax burden -- now or in the future, once the economy is more robust? Why shouldn't they be asked to pay a little more? I'm reminded of a comment I once read about how paying taxes used to be considered a duty, a responsibility -- a privilege, in fact.


More on MSN Money:

Jan 17, 2013 12:25AM
Are you fu**king  kidding me? The wall street barons robbed the middle class, broke us all down and destroyed the economy, they continued to get million dollar bonuses while we struggle to survive(not one went to jail) and you ask that we should pay more. How Ridiculous!!! We are already being raped an pillaged by corporate america (high gas prices that escalate after Christmas every year and before summer and go down every year after Black Friday so we'll have a few extra dollars to spend for christmas. Believe that isn't all orchestrated then I have a bridge in Brooklyn to sell you. The local governments have gotten in on the take with  all of their taxes and fees. Take a look at your cell phone bill. Why should we have to pay them to make improvements to our property. Please explain why we should have to pay the city to be a landlord or to purchase a property in a particular county. Why do we have to pay excessive fines if a ticket isn't paid in 10 days?Why should we have to pay parking meters when we already pay sales tax, property tax, ad-valorem tax, state tax, and all the other taxes they impose on our utility, phone and cable bill. It's no wonder the middle class is hurting because everyone wants a piece of our hard working dollars that there is little left to save with so many hands in our pockets taking what little we have left. GIVE ME A FREAKING BREAK! If a billionaire has to pay another $100,000 in taxes does it hurt his pocket? NO!!! but increase the middle class by $2000 a year and it makes a difference in whether or not our kid gets braces!!!
Jan 17, 2013 12:20AM
The only way to fix the problem is for us all to pay a little more. The problem is...if we do pay more, Washington will just spend it so the tax increase would do no good at all.
Jan 17, 2013 12:19AM
Only the ignorant want taxes to go up.  If some of you simpletons added up all of the taxes you pay,you would figure it out.  This includes:  Federal Income Tax, SSI, Medicare, Capital Gains Tax, Death Tax, State Tax, Property Tax, State Sales Tax, Gasoline Taxes (Fed and State), Excise Taxes (on a multitude of items), etc, etc.etc...... and this doesn't even include those things they now call fees (the only folks fooled by that one are the supporters of "hope and change").  We are being nickle and dimed to a slow painful death and too many of you simply don't understand it (surprise, surprise...).
Jan 17, 2013 12:18AM
There are some great ideas here. Maybe we need a committee of the middle class making some decisions. For one, close the loopholes. Keep the deduction for a primary residence up to a reasonable amount and eliminate deductions for 2nd mortgages/vacation homes. Close loopholes that just don't make sense and people take advantage of. Why is healthcare so high? For one thing, the workers compensation carriers always push settlements closing medical expenses which force truly injured workers to turn to private carriers or government which can result in more than $250,000 in medical expenses over a lifetime for just one claim!. Although the medical expenses are the RESPONSIBILITY of the WC carriers, WE end up paying so they can turn a bigger profit!
Jan 17, 2013 12:16AM
I think it is time for the Government to cut spending cut all the free **** to the Illegal's and send most of them back to what ever country they came from and give the American people a chance to find a job and start taking care of them self's
Jan 17, 2013 12:15AM
I have a better idea..........Start with Congress and the Senate raises to be based on how well their performance is by their approval ratings. Lose the special healthcare benefits they get and they can have the same healthcare as everyone else. Lose the special retirement benefits and they can have social security, like the ones that voted them into office. Stop spending more money than they take in, like the rest of us that voted them in and be fiscally responsible. Get rid of labels (republican, democrat, etc..) So to UNITE the COUNTRY so people can vote for the person instead of the party. THEN when the ELECTED people live as WE THE PEOPLE live (responsibly) then we can solve our debt problems that our GOVERNMENT has caused. 

Jan 17, 2013 12:15AM
Karen, I think you underestimate greatly just how many middle class people are near broke and living on the edge!!!
Jan 17, 2013 12:14AM
Try to live on $16,000 a year! If we cut spending there will be a lot of people losing their jobs. Maybe the government could make companies shipping jobs overseas pay a penalty. When a job goes overseas that's a job gone and one less taxpayer.
Jan 17, 2013 12:14AM
Karen Datko (the writer of this propaganda) likes to pretend America has a revenue problem! Ha!  That's kinda like saying The NBA or NFL professional athlete has a "Revenue Problem" when they file bankruptcy after they squander their fortunes on drugs, hookers, and bad investments!
Jan 17, 2013 12:11AM

The 7.7 million in "donations" to pay down the debt, if my math is correct, amounts to about .0000475%.  Imagine somebody leaves a $100 bar tab unpaid...and further imagine the next 10,000 patrons "chipping in" at this percentage to pay it the aggregate, they would muster less than $0.50 towards the bill!    Such benevolence will get us nowhere fast and as other commenters point out, the only solution is to drastically curtail spending. 

Jan 17, 2013 12:07AM
You, Karen Datko, are a nut.

Also I just blocked msn from my web browser.

The country has crossed a line of crazy.
Jan 17, 2013 12:05AM

you stupid the answer is tough. No politician will ever win on the cuts that have to be made. Romney said it with the 47% remark. There are tough cuts to be made and it is no one's fault but the citizens themselves. We vote them in! Get the politician out there that will run on cutting: medicare, Social security, and the free hand outs........ let's see how many votes he'll get..   We are a deadbeat nation... or should I say 2 generations..  SS was adopted in 1935, (fricking ponzi scheme now) and Medicare in 65. I've paid into all my life like most and where is my money????  gone?  Ponzi scheme.    It's time we own up and take care of bussiness


Jan 17, 2013 12:01AM
Ok, let's think about this.  Our Government representatives have been gradually and successfully removed from the public's control.  These people were sent by us to the Government to represent the people.  Somewhere, somehow, this has turned into a position where they are influenced by people and organizations that are only in it for their own self interests. Pockets get stuffed and votes on the floor are done by monetary greed and not the public's wishes.   Unfortunately, this system has evolved into a "machine" that is almost impossible to penetrate.  These people protect and shelter each other in their own world that is not seen by the general public.  These people have gained more power than they were originally given.  
The people of the United States have been coerced into believing that these people really care about them.   The most influential properties of a politician is money and power.  They can either influence or "buy" votes by their position.  We need to get this kind of greed out of our Government.  How do these people relate to the population that are loosing their jobs and homes?  These folks in the Government are making  6-7 figure salaries. I don't think they are having bill collectors calling them, so I don't think that they can relate.

The Government's way out of this deficit is to raise taxes.  While this sounds good at face value, the consequences are that people will have less money to spend which will spiral down through the economy.  I don't know about you folks, but my family has had to endure cost rises and no way to make it up.  I would love to approach my boss and tell him that I need more money to offset the expenses that we have.  How do you think that would fly?  The Government is in a sense doing the same to us, but we have no choice

In conclusion, the American people need to speak up and tell the Government to get their act together, otherwise the people will do it for them.  We need to get this political "Party" issue
to go away, and act on what the people want.  

Do we own the Government, or do they own us?

Jan 16, 2013 11:56PM
If you want to raise taxes on the middle class, go ahead.  But it should come at a cost to ALL.  Taxes should go up on the poor and the more affluent too.  If you receive public assistance you should get a little less.  If you make a lot of money, you can sacrifice a little as well.  If you don't have skin in the game, you will not care.  We shouldn't single out a particular income level.  This issue affects US All.  We should all be asked to come to the aid of our country.  That said, I will not sacrifice one dime if my government doesn't also sacrifice.  They need to do their job and pass a budget.  They need to cut spending...People who over eat and exercise don't understand why they keep gaining weight.  It is the overeating.  Our government continues to eat more taxes, but can't seem to exercise enough to overcome overspending 
Jan 16, 2013 11:54PM
I pay state tax,federal tax,property taxes that keep going up, and when I spend some of what's left they tax that too.Should I pay more tax  HELL NO !!!!!
Jan 16, 2013 11:51PM
Rick Santelli is a complete douchebagger...
Jan 16, 2013 11:46PM
Yeah..that's the spirit.  I hear that the wealthy are  40 more wealthy now than they were 20 years ago.  How unfair it would be to increase their tax burden and take away their ability to grow40 times more wealthy in the next 20 years?  And the middle class, who have been treading water for the last 20 years...well, they can submerge just a little bit to take some of the pressure off of the rich!  Yeah.. that sounds like a winner...for the wealthy!  What about me though?  I've gone without a new car for over 30 years.  In addition,  I never could afford to get married and have a family because of my tax burden and the need to save for retirement unless I wanted to try to raise a family in poverty.  I want a better a life too!  How much more of a tax load you want me bear?
Jan 16, 2013 11:45PM
A little more tax would be ok, but I feel we would generate more government income if instead we eliminated a lot of the tax right-offs and credits. i.e. no more deductions for mortgage interest, child tax credit limited to one or two kids only (you should not get lots of credits if you cant control your reproduction) and do not allow anyone to get a refund higher then what they paid in. But in addition to higher taxes we have to trim spending on welfare programs (which I see as totally out of control with no reasonable checks and balances or accountability) And review government spending for sensible cuts not blank across the board cuts. And lastly we have to reevaluate and stop or reduce the NAFTA agreement as this has cause most of our jobs to leave, reduced government revenues and I cant think of anything good from this program that benefited the American people. Lastly trim down all the money we give to other countries especially the one that hate us.
Jan 16, 2013 11:44PM
Yes, of course the middle class should have a modest tax increase.  Of course, like everyone, I don't want to pay more money, but our country needs help.  The wars in Iraq (don't get me started on that ridiculous, unnecessary war in Iraq, and the one  in Afghanistan, were not supported by bonds or tax increases as were all previous wars,  including WWII, Korea, VietNam.   If we have a war, we need to pay for our troops,their transportation, their munitions, their medical care, etc.  We can't close our eyes, push our fingers in our ears, and pretend it's not happening.

Grow up, Americans!  We need to pay for those wars and we need to pay for our infrastructure.
Everyone wants things to improve magically.  Sorry, no magic.  We need to pay our fair share  -- more taxes -- until we catch up with the grave losses of those ridiculous wars  -- especially Iraq. Really, did no one in the Bush admin. study on the situation?  Those are tribal countries who will never be democracies . .  . and if they do, it will be an organic change, not one imposed upon them by a foreign power.

If you are a patriotic American, you will understand that a slight increase in taxes is our only righteous path.  A small amount won't kill you, but it will help our country enormously.  This is the first time in history that we've never paid for war, and indeed, by Bush/Cheney ,asked to pretend it wasn't happening.

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