I have often heard that the rich are taxed less than the poor. That didn’t seem right to me. I also heard that the middle class takes more of the brunt on taxes than the rich. That seemed a little more believable, but certainly didn’t ring true for me. As a middle class guy, I found plenty of tax breaks available to me (and everyone else), if they would only look for them and plan accordingly.
I finally decided that all these tax generalizations were based in ignorance, not on reality.
I’m glad this article spelled some things out.
It turns out that there are tax breaks available for everyone, that the rich are NOT taxed less than the poor, or even the Middle Class, and that 47% of Americans (granted, poor Americans) don’t pay taxes at all! It would seem then that the Middle Class and the rich do pay a lot of taxes, but largely because they can, and because a whole bunch of people can’t.
As I stated in my previous “random thoughts” article, Americans are taxed less than almost any other country in the world; an inconvenient truth to be sure.
Years ago, I was really getting behind the idea of a flat tax. It simplified tax law, and it was fair to everyone. I still believe this, but I also realize that 15% (or whatever the flat rate would be) to some is “more” than it is to others.
I liked the idea of a flat tax because it would greatly reduce the taxation of the middle class (Me!). But I also noticed that the main proponents of the flat tax were exceedingly wealthy people. This makes sense – they would get even more benefit from a flat tax. The only losers would be the 47% who currently don’t pay taxes at all. The flat tax seems fair, but only to the point where it doesn’t clash with a minimum standard of living. That’s where things get tricky… and likely why we have a graduated tax system in place currently. America is expensive, and the very poor can’t realistically live comfortable lives here. We can’t ship them off to some other country because they are poor. We must, at some level, take care of them. Exactly what that means is up to the government… and that’s where things get messy.