With Tax Day here, we’ve come across news saying taxes collected on our nation’s top 400 incomes amount to 10 percentage points less than those collected in 1992. Sounds crazy compared to the average drop of 0.6 percentage points, doesn’t it? Well, keep in mind that 45 percent of American households pay no income taxes, according to the Tax Policy Center.
The majority of those not paying, and note this doesn’t mean they don’t pay payroll, state and local taxes, make $50,000 or less each year, but there are five million people making between $50,000 and $1 million who don’t have to worry about the tax man. People in both groups have exemptions and credits to thank, but their days are likely numbered.
Both sides of the aisle have been discussing ways to generate revenue through taxation, whether it be through eliminating tax breaks but lowering the highest tax rate or through forcing the rich to pay the same percentage the average American does. We’re getting ready for a long, ugly battle between people who agree we need more revenue but who disagree on who to take it from.
We have to give both sides a nod for understanding the tax system is entirely too complicated as is, but Obama certainly won us over by saying he wanted to create a system where “the amount of taxes you pay isn’t determined by what kind of accountant you can afford.” Nicely said, Mr. President. Making that happen, however, is going to be a different story.
