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?
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:
I agree with most of the folks here..., the problem is not with the taxpayers, it's with the politicians trying to use tax dollars to buy votes. Here's my idea. Anyone recieving an "unearned" payment from the Federal Government loses their right to vote do to conflict of interest. Wouldn't involve Federal paychecks, or returns for things we've paid into our entire working lives like social security or medicare, just the "freebies" we simply can no longer afford to give away. My guess is that as soon as the politicians find out they can't buy anyone's vote, they'll stop giving away the money.
A second notion that occurs to me is to stop paying Congressional salaries and perks when they spend more than they take in. Just a drop in the deficit bucket..., but at least it puts more of the pain on the people who caused the problem.
Vote out all incumbents and bring in a change of the guard. If they then do their jobs they get to keep their jobs.
I can tell you why no one in the middle class, or upper class, or in the lower class of working folks, should have to pay even a dime more in taxes - because it is way past due that something else happens. The time is right for an alternative to higher taxes. You know what time is due, the time for - the unrighteous entitlists, those leeches on unemployment for up to a year when yes there are jobs but just not the ones they want out there, the drug dealers who get public assistance and food stamps, the fakers on disability who are more able than you or I, the bums who could work but choose to suck charity's tit dry, the Occupy Wallstreet useless hippies who rant and rave and never earn anything but the disrespect due them - those useless pieces of flotsam in our society to get off of their supposedly entitled arses and get legitimate jobs and pay taxes. It is time for the 47 percent who pay nothing but who take everything to finally get jobs waiting tables, washing dishes, scrubbing floors, cleaning up dog poo in kennels, digging ditches, handing out fliers, or doing whatever menial jobs they can get to pay their fair share and to lighten the burden on the rest of us by not taking what we have dutifully earned. It is also time to get rid of the 30 million blood sucking illegal aliens in this country and for them to give up their jobs to the above mentioned useless American citizens so that tax rates on the rest of us can finally go down. Think about it, then sleep on it, and maybe you will wake up as a responsible adult tomorrow. Something tells me though, you are a hopeless liberal, just as hopeless as is the future of any country, like the USA, in which so many feel entitled, even empowered, to take so much from the rest of us and give nothing in return except demands for more.
Sincerely,
Glenn B
Does anybody know if the White House sees these comments? Or, are we just throwing words out into the air with no results. Every comment I see is fairly accurate. Third world countries get money from the U.S. that we don't know about. They'll never support us, just burn the flag. Washington politicians have no plans to stop the "Debt Clock" as it goes out of control and I think we know that. Each so called President just increases the debt ceiling. Do we all know who we really owe? Some say China. Our debt is over 16.5 trillion and we owe China less than Japan...about 1.2 trillion. Take a look when you can at who we owe money to. You'll find we owe ourselves most of the dept and this is why the Washington politicians won't stop the clock. They know we're stupid and they don't mind calling us stupid. We keep voting the wrong people in office. Smoking pot in some states is legal now. These are the same people that will pull the lever for the wrong politician at the polls. They don't think right and can't. They're too high. We are our own destiny and it's going down the toilet thanks to people who are here illegally and to those who just don't know this countries history. Everyone who voted for this so called president wants something for nothing. You know who you are! You think this country will survive with 300 million people like you in it? Move to another country for a while. You'll come running back to the protection this country gives you.
You know, I'm solidly in the middle class living in expensive New York. I calculated that over the last 12 years counting state, local, federal, sales, gas, energy, and every other tax known to man, that I've paid about $500,000 in taxes - about 50% of my gross pay putting me under a 6 figure yearly salary. That's definitely middle class in this state. So what have I gotten for my half a million dollars?
The way I see it, it cost me something near $114 per day for the right to drive on a modern road system that is cleared of snow and repaired; see my neighbor's children educated (I have none by choice); have myself, home and property protected; and will receive retirement benefits from the government. Of course there are all sorts of smaller things that the governments do for me, but what other expense do I have that even comes close to paying for government? Should this really be that expensive??? I'd find it hard to believe that it should.
Before anyone's taxes is increased, I'd like to see a web site put out by the government that details where every dollar of our taxes went for the last ten years. And I don't mean a list of categories. I do mean a list of every program by county, state, city, etc. that the federal monies have been sent to, and by any weapon system, border protection, and social security/medicare per persons grouped by age and state. This data exists and it's about time We The People understand where our money is being spent and for what. This also includes grants and loans, general salaries for government employees, and aide to foreign nations.
If you want money from the bank, you have to detail what you are going to use it for. If We The People are to give more money, then we need to know how it is being used IN DETAIL. If the federal government needs for us to open our pockets more, then we need to demand more openness in government. And it needs to be understandable as well.
I was appalled when I turned 15 and was charged money to get a job. I can't believe that we are so stupid as a nation that we don't understand how ridiculous it sounds that I have to teach my child that if you want to get a job then you have to pay money to work. Isn't there a better way? There has to be a genius out there who can figure this one out. That doesn't bother anybody? Oh yeah, the money they took out for disablity is a scam. I became disabled at 37 when I was diagnosed with a heart defect that has killed three of my siblings. Guess what. When I went to get the money back that I paid into the system they told me that I have to pay disability a $1000 a month for the year for medical only. That's $12,000 a year to go on disability that I will have to pay to die from my condition. Private insurance is cheaper than that per year. Does anyone see anything wrong with that picture?
You cannot expect middle class families to pay higher taxes because they, like our government, are in debt too. Most of America is in debt, trying to live the life of a movie star and they have been in debt for many years. I cannot help but laugh about commenters who throw stones at anyone who receives food stamps or another type of assistance. It is not that we disagree with helping others in need; we just want our free check too. I think it is about time we grow up and act like we are a country, together. We are in debt and we are going to have to pay for it. There shouldn't be any questions about whether we're willing to accept higher taxes. We just need a leader who says you're going to pay higher taxes and we're going to cut spending. We love our economy and its imperative for growth but all of a sudden, we're struggling to figure out how we're going to pay for that growth. We're pretty messed up culturally and now we get led around by our noses trying to figure out if we're going to pay to take care of the baby-boom generation now or pass the burden on to our kids to pay for later. No question, we are going to pay now by raising taxes and cutting spending, and we are all going to help.
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