Reaching the 47%

The allegation that “47% of Americans don’t pay Federal taxes” has entered the American political lexicon and will remain in it long after Election Day.

Regardless of the accuracy of the comment, there is an element of truth in the following:  people that don’t pay into a system have no stake in it.

This exception extends not just to the poor, there are plenty of wealthy people who avoid taxes by virtue of bogus tax deductions (or the refusal to report their income).

Our friend Jamie Smith, who obtained 12.5 million in 2007 through a fraud (as found by a Virginia jury), is a perfect example of that.  As he testified in his trial, he simply declared the stolen $12.5M as a “loan” on his amended return and wrote it off against future income.  So he pays nothing.  To date, the Feds have done nothing about that fact – other than throwing more money at his phony “security” business.

Last week, in his debate, Tim Kaine addressed the issue honestly, by stating that he was “open” to some type of minimum payment which would address “zero-filing” taxpayers.

In a display of chutzpah, the REPUBLICAN candidate, George Allen, has attacked Kaine for considering a “tax increase on poor people.”

But wasn’t that Mitt Romney’s whole point?  That more people should be come stakeholders in the Federal system?

(More pertinently, does Allen have any plan for avoiding sequestration?  Does he even care that the hard-core “no taxes” position by the U.S. Congress will cost thousands of jobs in Virginia, if no deficit deal is reached?)

The reality is that the current Federal system vastly discriminates against working people, whether they’re making $500,000 or $50,000 a year.  It benefits people who live off capital (Romney), off stolen funds (Smith), or off other undeclared income.

The unfairness of the current system is one of the reasons I have never voted for an income tax increase in 12 years of legislative service.  (Look it up). You’re only hitting those folks who work hard and play by the rules.

The question of closing loopholes and expanding the tax base is always worth asking.  That’s all Tim Kaine did.  We need more politicians, Federal and state, to be asking the same questions.

 

 

 

 

 

 

 

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  • Chris Durlak

    The tax ‘problem’ isn’t on the lower end of the income scale, it’s on the higher end. Having a minimum tax to give poor people ‘skin in the game’ does not make them more productive. Trying to make it on food stamps is a delicate, monthly balancing act. Most families have to supplement food stamps with help from local food banks. These people aren’t lazy or victims – they’re usually going through a difficult time. We need to defend them. I don’t see a problem with folks in the lower bracket paying nothing and receiving benefits. I certainly don’t think Gov. Kaine meant he would impose a minimum tax on the poor.

  • Jamie

    hb5018 in 2004. You raised income taxes on those over 65.

  • Chap Petersen

    Nice try but HB 5018 (which I supported) simply leveled the playing field by taking away an age-based exemption. The rates stayed the same.

  • Tbailsh

    The 47% is a made-up number, as are so many others.

    Ask someone who’s struggling – who may be just over the line for food stamps or some other assistance, but using medical benefits for children, or whatever scenario you choose – and you’ll learn they’re just as angry at those who don’t try to work, who seek every opportunity to get something for nothing, and who use the system. The 47% is not homogenous; it’s as different as every other demographic thrown together for some statistical purpose.

    However, the idea of making everyone a stakeholder in some manner DOES make sense.