Study: State Tax Burden Falling Heaviest on Middle to Low Income Families
United States: According to a study conducted by the Institute on Taxation and Economic Policy the burden of state taxes is falling heaviest on the shoulders of low to middle income families as a percentage of income.
The poorest 20 percent pay 10.9 percent of their income on state taxes. The middle 20 percent pay 9.7 percent and the top 1 percent pay just 6.4 percent with further savings from itemized deductions at the federal level not taken into account.
"In the coming months, lawmakers across the nation will be forced to make difficult decisions about budget... which makes it vital to understand who is hit hardest by state and local taxes right now," said study author Matthew Gardner.
but no doubt someone will use the excuse that the rich still pay more and hence shouldn´t have to pay proportionately the same (or more) as the low-middle income families... of course if they did, balanacing the budget wouldn´t be such a chore as they would be getting about 85-90% more renevue fro mthe people paying proportuionately the least and benifiting the most.
they don´t care if high-income people are riding the shoulderes of the middle and low income people, infact in most of their eyes (since they´ve have almost all been long since corporately bought and sold above and beyond being detached from the people they are supposed to be representing) thats the way it should be.
I´ll let Adam Smith, the father of free-market capitalism and author of ´The Wealth of Nations,´ explain why this is so horrible:
"The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."
form of taxation. Those of little means do not purchase as much as those of greater means and therefore, would pay less. Additionally, those of great means who choose to live frugally, would be freed from the burden of high taxation.
of course a tax on all acummulated wealth (and bought goods/services) combined would do that also, and more effectively... and would need a lower overall tax rate as a result as it would also be taxing horded wealth of millionaires and billionaires... this would be particularly effective as most people that are hit the hardest have vistually no accumulate wealth but rather accumulated debt like mortgages, car loans, student loans ect., in contrast the wealthy have exorbant bank accounts ect., which ultimately harm the country by keeping the money out of circulation, whereas the poor spend litterally everything they make just to get paycheck to paycheck, and the middle-class have don´t have all that much in the way of savings either, they just live a better lifestyle than the low income people.
propety tax, sales tax and income tax all have their good points, and at this point ALL are require just to maintain most countries... but a savings/foreign holdings tax would be far more effective than ANY of those three taxes.
if they added it as a replacement to the other taxes at the same (or equivent rate) it would be far more effective i would think a it would target wealth NOT needed, nor currently active in circulation. progressive taxation may also be able tobe eliminated this way, at least i would think so.
or a suppliment to the current tax system to lower the overall tax rate, yet still bring in more revenue; just less from those whom can least afford it.
Our Income tax serves only one purpose; to pay the interest on our deficit spending to the Federal Reserve. Eliminating the Fed, and restoring our Federal government´s primary constitutional power to coin money would be a great 1st step in healing our dollar, and easing our tax burden. Property taxes, which I disagree with in a free society, are rightfully delegated as a state´s issue. Corporate income tax is a just right of the federal government, and all that is necessary to fund our defense. The income tax, however, is entirely used to make these same central bankers rich from usury on a global scale, and furthermore unconstitutional. Who in their right mind would give up the power to coin their own money, and instead agree to pay interest to another entity to coin your money for you? Far better for there to be a flat sales tax than an income tax. And Ben, because I can´t resist, Adam Smith is no more the father of Free Markets than Isaac Newton is the father of gravity. They simply categorically described what was already there. Adam Smith IS rightfully referred to as the Father of Economics, having penned treatises conjecturing on the ebb and flow of markets, and theorizing on the value of labor and commodities. If people are interested in further education in free market theory - the only economic system compatible with personal freedom - I would suggest reading Murray Rothbard´s works, namely Man, Economy and State. All his books are entirely worthwhile, as he had a gift for making dry economic prose quite readable and absorb-able to the layman.
the benefit of the wealthy elite. There is no other way of looking at it. This system was designed by elites, to benefit elites. What would they gain from a system that benefits working classes? Nothing.
This may sound like Marxist rhetoric to some but it is plain an simple truth. The US was founded by wealthy land owners. Those that would later go on to write our taxation laws and policies would be part of the large banking cartels, big industry and other very powerful private interests. The very notion that these individuals would create tax law for the benefit of the lower classes simply out of the goodness of their hearts is insanity to say the least.
It seems that the idea of taxation without representation is alive and well within our own borders. Surely a majority of our representatives that sit in office are controlled by major corporate interests. Therefore it is simple to say that we are not a democratic republic but rather an oligarchy of professional politicians and elites hell bent on obtaining more and more wealth at the expense of those they stand on top of...
Find me a poor person who can magically afford the services of a tax accountant and you will have proven me wrong. Secondly I highly doubt that the income tax generated by someone within the working poor would qualify them to use an incorporated status. For that matter I highly doubt that many of them would even know what a capital gains tax is since they will most likely never encounter it in their entire lives.
So to say that the poor can access the same services as the rich is the equivalent of saying that their is no gap between rich and poor in this nation which is ludicrous to say anything of our current system.
@Prohibidato - Actually the tax burden prior to the income tax was quite heavy on the poor. There were in fact many insurrections and rebellions after the revolution as a result of heavy taxes and debt being forced onto the backs of the working classes. A good example is Shays Rebellion where taxes and debt were the leading cause of a violent revolt.
A good source of general information on early oppression of the poor and middle classes is the book entitled "A Peoples History of the United States" by Howard Zinn. In it, Zinn quotes and gives many historic examples of unfair and heavy taxes levied onto the working poor prior to the institution of the federal income tax. So in effect, there were many different taxes in place that both hurt and kept the poor poor. Albeit they were not income taxes but rather direct and indirect taxes such as taxation on individual items and services as this was the only form of taxation granted under the constitution to the federal government. The point is, they were extremely heavy burdens nonetheless. The idea that some people have where Americans were tax free prior to the invention of the income tax is largely false.
People have always paid taxes and generally the poor have historically been taking the brunt of these levies.
I´m not arguing that the poor have a need for corporations or that they can afford to hire accountants. You took my statement and went only to the extreme with it.
Perhaps a more realistic example would be the average, middle class family. These people tend to either simply fill out the 1040-ex themselves or hire some "Tax time" refund collecting service to file it for them. The reality, however, is that they could itemize some of their expenses, create Family Limited Partnerships to hold their family assets and exercise a plethora of other rather simple tax avoidance vehicles in order to lessen their tax burden.
Instead, they choose to buy "doo-dads" on credit, stare aimlessly at their televisions and fritter away what money they actually do get to keep on fast food and tickets to professional sporting events.
None of that is the fault or the doing of the rich and none of it is dictated by our tax law. It´s simply the choice some people make and blame for their poor choices lies only at their feet.
Other than that, I tend to agree with your sentiment about our government. ;)
Taxes on the wages of labor )that benefits) the state, as opposed to inherited wealth (that shows no benefit to the state. Hmm? My choice is to tax the crap out of inherited wealth. Why should a person have a free ride in this society just because of the labors of their fathers and grand fathers. Taxes support the state and should be born by all. No free rides based on the luck of birth. Two million dollars exempt and the rest taxed at an elevated rate. You are not taxing the dead you are taxing an income to the inheritors.
I really disagree with this and would like to explain to you why. Since it has to do with some really personal and identifying information I was wondering if you could PM me your email address so I may explain properly. Thanks.
Again I ask.. how many times should income be taxed? After all, inheritance has already been taxed when it was originally earned.
Also, what gives any of us (government included) the right to tax already taxed monies that were given to a person by anyone else? That money has already made its contribution to the state and it´s clearly not the fault of the recipient that he/she received it, so why continue to tax it over and over again? You´re essentially arguing that people who save should be punished monetarily.
Think about it this way....
My parents will likely leave me with debt, rather than inheritance. With that being said, should I receive some special tax break in the event they do or should I just accept that loss and move on, even though I didn´t create any of their debt? Because in the end, I have no more control over their leaving me with a surplus than I do their leaving me a deficit.
Thank you so much for explaining it better than I could. You are aware of what I wanted to explain to Ichi and how I can´t in the comment section because of certain details.
I can say that what will be happening within the next year or two will bring some wealth to my family but that wealth has been ´owned´ since the 1800´s and paid on for over 100 years so why should we be unfairly taxed for selling when we are already paying in the high 5 figures a year. The money that was used to purchase and the yearly costs that has risen yearly and will only continue doing so the longer it is left alone. Now do we get to avoid yearly taxes and instead pay taxes on it only when we sell since we are leaving it alone? Of course not the state, county and township want that money right now. I don´t feel like we should be responsible for paying yet more taxes just because my great grandfather, my grandfather and his children did the smart thing as long as they could before they are just being ignorant with the amount of taxes they are charging.
I won´t even get into the state and politicians pay raises each year and just raising taxes on gas and other things to try and cover the bloated budgets.
Actually, I wasn´t aware. I´m not saying you never shared that information with me, I´m just saying that if you did, you were obviously drunk when you told me, which is why I don´t remember... :D
You know that almost worked there, the only problem is that I can´t drink. :-p I has been about 6 months ago so I can understand, I didn´t think it was that long ago sheesh!
