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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.

 

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528Comments
Jan 16, 2013 7:30PM
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If you had a kid spending more than his allowance, would you want them to stop spending so much or just give them more money and think that would fix anything.  Washington sucks.  Worthless all of um. 

Jan 16, 2013 7:30PM
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You people do not know how to count. Obama spent 6 trillion dollars in 4 years Bush spent under 4 trillion in 8 years.
Jan 16, 2013 7:27PM
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We're in this mess because the last president started two wars and gave the people who would be expected to pay for the wars a tax reduction. I have no idea how he expected to pay for the wars, I guess he figured he could just borrow the money and put us in deep debt.  It annoys me to no end how people can simply forget about this and look around and try and find some program or other like welfare or medicare or whatever and convince themselves that this is the problem.  It's not. If you want to see the national debt go down, it's simple, pay more taxes. A lot of young Americans gave their lives for us, at least we should have the decency to pay for their sacrifice.
Jan 16, 2013 7:25PM
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I think we need to start calling in our loans from Countries that have asked for our help, and I think the Rich need to stop crying about having to pay higher taxess...they still get some taxe perks anyway.

 

 

Jan 16, 2013 7:22PM
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King Obama has spent more than all presidents combined----------- period!
Jan 16, 2013 7:22PM
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If the government were to cut discretionary spending on things like DEFENSE, I would have no problem paying more to cover the costs of Medicare and Social Security...and I would bet my firends on the right would be willing to pay more taxes if they started cutting cost of living adjustments, increasing ages of Social Security and Medicare eligibility, etc.  The obvious question is, why not do both AND raise taxes?
Jan 16, 2013 7:21PM
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The wealthy have become that way on our backs. They should pay the price of keeping us able to do our job & make money for them. They should consider it an honor, a privilege, an "inalienable right", to be able to accomplish what they have and they should be proud to provide for the citizens of this country. There is a price for accomplishment. They make more because of us, they should give more to us in order for us to be able to continue to seek "life, liberty & the pursuit of happiness."

It seems to me that the powers that be have forgotten something important:
We, the middles class, are what made this country & keep it going. The wealthy may have had vision & money, but without US nothing would have ever been made or bought. I feel like we work our a$$es off to pay for them to live off of us, and they won't give up until we give them everything. It's time we stop being taken for granted.

Our relationship with the government has become completely one sided. What happened to them taking care of US?! Why do we have to give up more & more to keep the country going? We're the ones keeping it running now!!!

EVERYTHING around us has increased in price (but the cost of living hasn't increased?) and they keep taking more away from US!! I'm tired of fighting to live, it's time for them to fight more for our lives.

Jan 16, 2013 7:21PM
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MSDNC once again shows it's leftist bias.  Budget cuts are only HALF the solution????  They are the ENTIRE solution.  Just freezing the budget would balance it in a decade or so!

 

Spending took a $800 billion step change when Obama took office, it was only supposed to be for one year.  It has gone on now for every year and is baked into the next four.

 

 

Jan 16, 2013 7:20PM
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I find it funny how people blame dems when it was the repubs who still have not paid for two wars they backed but did not pay for so if you want to blame a party blame Bush, do you realize Bush deficit spending was like 5.7 trillion compared to Obama's 1.6, Also you want to cut food stamps but how about subsidies for big oil and farmers and the fact that people like MItt pay a smaller % of taxes than middle class. That is not to mention foreign aid to places like China and Africa. So for you dumb a$$ repubs lets see you deny and spin this as everybody else's fault but yours, even though we are still paying for two wars that were unnecessary at best!
Jan 16, 2013 7:19PM
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what we need is everyone to pay their share.  there are to many people that are not paying anything.
Jan 16, 2013 7:17PM
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Maybe Queen Obama should stop wasting our tax dollars by jetting around the world on airforce one shopping.
Jan 16, 2013 7:15PM
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Food for thought!  A couple of states have figured it out.  Legalize and place the same taxes on Cannabis, maybe more taxes, then we have on alcohol.  Keep the two separate thereby creating, another agricultural crop, both large & small distribution businesses, construction to build/remodel space for sales, jobs, even government agencies to police and monitor these business’ etc..  Most likely would reduce the amount of illegal smuggling of Cannabis into our country by drug cartels/lords.  In fact why give all that money to the drug cartels when we could keep it in this country.  I don’t think Cannabis is going away anytime soon, alcohol never did. 

Jan 16, 2013 7:12PM
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Regardless of how much money the Fed takes in the Government is still going to spend every dime of it plus a Trillion Dollars more every flippin year...It's a lot easier to spend the tax payers money than it is to be responsible with it.
Jan 16, 2013 7:11PM
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Please don't kid yourselves They will Tax more&more. They feed like pigs and no one can or will stop them.Look at the last Election. The Public electoral &popular vote went for it.
Jan 16, 2013 7:10PM
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reduce spending        we are very wastful
Jan 16, 2013 7:09PM
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I am not opposed to higher taxes when absolutely necessary if the government is acting fiscally responsible.  If we don't stop with the "give aways" in this country we are in for total ruin.  By "give aways" I don't mean Social Security & Medicare as the recipients of those programs paid for them throughout their entire working career.  I am talking about 3rd & 4th generation welfare recipients, free cell phones, food stamps for illegal aliens,  etc. etc. etc.  We need to get the dam Democrats out of office. 
Jan 16, 2013 7:09PM
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I think we need to expand the tax base rather than raise tax rates.  A small national sales tax on consumer goods (not including food or health care) would tax everyone and be a lot more fair than the current class warfare/tax the rich mentality.  Also, it would generate tax revenue from people who currently have income that is not reported.
Jan 16, 2013 7:09PM
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This nation will be judged on how it treats the poor and the elderly.
Jan 16, 2013 7:09PM
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There is no amount of taxation that will cover the debts of this out of control Government, which has run up such a massive debt that it can only be paid through inflation.

 

By paying more taxes, we only delay the day of reckoning.  Let's have it now - tighten our belts and hope for the best.  NO MORE TAXATION!

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