Those Who Pay No Taxes and What it Means To Us

It seems that whenever someone starts suggesting that the rich need to pay more taxes, someone chimes in to remind us that the rich pay a lot of taxes. They say that the real problem is that 50% of all Americans pay no taxes. Well the unfortunate fact is that this is true . But when you look at these numbers what you really find is that 37% of all Americans are too poor to pay taxes.

For 15% of Americans, either the standard deduction or earned income tax credits are greater than what they owe. A full 22% of Americans get such a large percentage of their total income from Social Security that they do not pay taxes. You may notice that there are still 13% of Americans who do not pay taxes. These are people who are able to "zero out" their income through other deductions for mortgage, interest, charities, etc. Most of these people “earn” a high income and yet they do not pay taxes.

I see two tragedies in this, both of which seem to have escaped notice. First, it is a terrible injustice that in a country of such wealth, 15% of the working people in the country make too little money to pay any taxes at all. It seems obvious that there is a problem in our wage structure that there are people who work for so little money that they must receive public assistance to survive. If they make so little that there needs to be an earned income tax credit then what is really happening is that our government is supplementing the wages of these individuals. This means the companies they work for are really receiving government assistance and helping them keep wages artificially low.

The other travesty is that so many affluent people are not paying any of their share of the costs of having a representative government. In this election season it would be great if candidates other than those in third parties, would talk about these problems. Between taxes, incentives, enforcement, and the minimum wage, there are many ways to get companies to pay living wages so the government can stop having to provide this form of corporate welfare. It would be nice to finally hear a discussion of how best to tackle this problem. Further it would seem productive to examine our tax codes and determine if we really want all of these deductions the wealthy use to avoid taxes. Such a debate is probably asking too much of our “mainstream” candidates, but that does not mean that we the people cannot discuss this amongst ourselves and vote accordingly.