by | BLOG, ECONOMY, FED, GOVERNMENT, POLITICS, TAXES
It’s kind of disgusting that when Congress talks about raising tax revenue, all the CBO thinks about and includes in their analyses is gross revenue. They don’t think about the costs of what the IRS, agencies, businesses, and taxpayers need to do to implement the policies that were created in order to raise that revenue. Those costs should always be factored in the computation and subsequently deducted to arrive at net revenue raised..
What’s happening now is that the compliance costs are not being considered. Congress says, for instance, that something will raise “$50 billion dollars” but then ignores that the complications, regulation issuance costs, compliance and other implementation expenses that will arise may cost $30 billion. So only $20 billion is actually raised. These hidden but true costs have to be included and come out of the CBO revenue forecast if we are to craft realistic, equitable, and efficient tax policy
by | BLOG, BUSINESS, ECONOMY, GOVERNMENT, POLITICS, TAXES
Have you ever heard any progressive who claims that the wealthy are not paying their “fair share” actually say what fair share is? Neither have I. It is probably because the wealthy in the US already pay a far higher percentage of income taxes than in any other developed country. Therefore, anyone who says the wealthy are not paying their fair share is either being a hypocrite or lying.
However, there is a group that is absolutely not paying their fair share. These are the vast number of the taxpayers who actually pay nothing. The Tax Policy Center’s newest report released in August 2021 found that in 2020, about 60.6 percent of households did not pay income tax, up from 43.6 percent of households in 2019; This closely mirrors the IRS preliminary estimate of 61.1 percent of households not paying income tax in 2020. It should be noted that much of the 2020 increase was due to pandemic-related factors, but the growing share of households paying no income tax should be kept in mind when evaluating the progressivity of the federal income tax system and proposed tax hikes on higher earners. There is virtually no other developed country in the world where this is the case.
This scenario reminds me of a true story from many years ago. When I was getting divorced, I was making about 75% of the money that my ex and I earned together. As part of our agreement, I asked her to pay 10% of the costs when our two kids went to college. At first she agreed; later on, however, she began to protest on the premise that if she got remarried and stopped working, she didn’t want to have to be responsible for having to pay the 10%! The fact that my ex had a responsibility to contribute toward college costs for her own children was totally lost on her. That’s what’s going on here. If the lower income earners don’t have any skin in the game, how can they be a responsible member of society? When they vote for new programs are they assuming that they have no obligation to pay any part of it?
The wealthy already pay a disproportionately high proportion of taxes. And yet Congress wants to fleece them more. They just assume that gullible taxpayers (I mean constituents) will just continue to vote for free stuff that others will pay for.
