Thursday, October 8, 2009

Transferring Wealth

The Tax Policy Center adds that this year the average income-tax rate for the bottom 40 percent of earners will be negative (i.e., they make money from handouts) and that their cash subsidy will equal 10 percent of the total amount the income tax brings in, thanks to the Earned Income Tax Credit and President Obama's "Making Work Pay" program.

The view from the top also shows the lopsidedness of the tax system. The top 20 percent of earners makes about 53 percent of the income in America but pays 91 percent of the income tax. The top 1 percent pays 36 percent. The IRS says the bottom half of earners pays less than 3 percent.

So now these people that pay low taxes/no taxes will be voting for the politicians that promise them even more. The problem with this scenario is that as the handouts get greater, more people will stop working to suck off the government teat.

Stossel argues that while we need tax reform, one thing that is more urgent is spending reform. We need to stop spending the friggin' money, people.

This is another excellent article by Stossel and I encourage you to read it.

You can find Stossel's article here.

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