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  • Morning Bell: How Tax Day Became Payday

    1040 Form

    For just over half of all Americans today is Tax Day. But for the other half it is just another day on the calendar. That’s because they pay no federal income taxes. The old saying goes “you can’t get something for nothing.” But these “non-payers” receive government services and benefits without chipping in.

    If more taxpayers continue to drop off the tax rolls, we will soon pass the dangerous tipping point where more than half of taxpayers are non-payers. The individual income tax is the main revenue raiser for federal government. Passing the point where less than half of taxpayers pay it would mean a majority of voters could vote themselves more and more government benefits without incurring any of the costs. In this unstable situation, politicians would have no incentive to restrain government spending since they could garner more votes by increasing it. That is a deadly recipe for never-ending increases in government spending that will inevitably lead to fiscal implosion when there are no longer enough productive taxpayers to foot the bill for the expanding state.

    The explosion of tax credits in recent years is the main reason that more than half of all taxpayers could soon pay no federal income taxes. Both political parties are fond of credits because they can use them to target benefits at politically valuable groups – think credits for buying hybrid cars or improving the energy efficiency of your home, for instance.

    To make matters worse, most non-payers not only pay no income taxes, they actually collect cash payments through the tax code. For these recipients of government redistribution, Tax Day has become pay day. They get this cash because of refundable tax credits. Refundable credits can not only wipe out all of a taxpayer’s income tax liability, but also send them cash for any remaining credit value. President Barack Obama once promised to simplify the tax code, but his agenda has actually made this problem much worse.

    The President’s failed $862 billion stimulus plan created the Making Work Pay refundable tax credit which redistributes up to $800 to filers earning less than $190,000 per year. The stimulus also: expanded the Hope Scholarship credit (renamed the American Opportunity Education credit) and made it refundable; expanded the child tax credit; and expanded the earned income tax credit (EITC). In 2010, the three largest refundable credits (the earned income tax credit, the Making Work Pay credit and the child tax credit) will redistribute over $114 billion from payers to non-payers.

    To fund these giveaways, President Obama campaigned on a plan to raise the top two income tax rates for those earning more than $250,000 per year ($200,000 for single filers). Already the top 10% of income earners pay 71% of all federal income tax revenue. This may seem like a great deal for non-payers, but ultimately there is no such thing as a free lunch. Redistributing wealth through the tax code only stifles innovation and job creation. Small-businesses employ just over half of U.S. workers and a recent study by the Kaufman Foundation found that small businesses have led America out of its last seven recessions, generating about two of every three new jobs during a recovery. But since most small businesses are unincorporated, so business income is treated as personal income, high income taxes hit small businesses the hardest. So while non-payers may enjoy a once a year pay day from the federal government thanks to all their tax credits, they are also the eventual victims of the resulting small-business-job-killing higher income taxes rates.

    The income tax code is supposed raise revenue for necessary government functions while distorting economic behavior as little as possible. Congress should do three things immediately to stop the tax code from being used as a vehicle for social engineering and wealth redistribution:

    (1) Stop creating new credits, especially refundable ones. This would stop knocking more taxpayers off the income tax rolls and slow the growth of cash payments through the tax code.

    (2) Allow the Making Work Pay Credit to expire. Under current law, the Making Work Pay Credit expires in 2013. Congress should let it expire since it removes many taxpayers from the tax rolls and – because it’s refundable – makes more families dependent on the tax code for income.

    (3) Extend the 2001 and 2003 tax cuts for all taxpayers. President Obama has long wanted to raise taxes on those making more than $250,000 a year. Doing so would increase the share of income taxes paid by top-earners and facilitate the move to push the tax code faster to the point where a majority of taxpayers pays no income tax. Extending the tax cuts for all taxpayers would prevent that acceleration.

    Fundamental tax reform is the only way to ensure that all Americans have a stake in controlling the size of government. Reversing the rapid expansion of dependency that is being facilitated by the tax code will not be easy. Many tax filers have grown accustomed to not paying taxes and receiving cash payments through the tax code. That is why we’re conducting a Tax Day Money Bomb today to send our elected officials a message that their reckless spending ways must end. Our goal is to raise $150,000 — money that, unlike your tax dollars, won’t be wasted.

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    67 Responses to Morning Bell: How Tax Day Became Payday

    1. William Downey, JD L says:

      This year I happen to be among the group that will get a substantial refund. I pay my estimated taxes, I have custody of a 4 year old grandson, a family member with advanced MS and one with mid stage dementia. I just buried my mother who had spinal cancer and I paid for all of the medical and hospice.

      I've filed taxes since I was 16.

      There are many reasons why I don't think your beginning commentary is appropriate.

    2. Jeanne Breunig, Midd says:

      My husband, before we were married, made his goal, as a future Catholic husband and father, to choose a noble career which would enable him to provide for his family. He was devoted to the Rosary, and I attribute that to bringing him into his chosen career, for which he was blessed with many graces. So, he has provided well for his family, and has paid his taxes, and works hard. That is all. He received the grace to be responsible for his family, and to help others. His reward is in Heaven. I thank God for him, and our marriage has been blessed by his hard work. If his hard work is not appreciated, if others don't take responsibility for their families, if others don't help others, then we pray they will receive the grace to change. The source of our existence is God. Let us pray. Our country is founded on God's blessings. Always give God the glory. Without Him, we are nothing. The USA should make it easy to be good, and hard to be bad. Let us start with abolishing abortion, whose root cause is contraception. Thank you for working hard to make America what God meant it to be. God bless you.

    3. Michael R. Victor, I says:

      Well, I just sent a check for $3000 to Washingtoon – Guess that makes my wife and I 2 of the good guys!

      Let's hear it for us!

    4. MN J says:

      The suggestions are fine but no where near enough. Spending must be curtailed, cut back, eliminated, etc. It is time for BOLD politicians but Gov. Christie of NJ seems to be the only one.

      However, there may be a silver lining here – if the income tax burden becomes so burdensome that it can no longer be sustained, the income tax will have to go. Then we move to some form of consumption tax only. This way, everyone contributes.

      There are two types of people: the doers and the takers. Our government and its beneficiaries are takers, period. There is a reason George Soros moved his money outside the US. The other billionaires and mega-millionaires won't feel the bite but the doers in the US will. When they quit/cut back/are forced out of job creation, we all will pay, including the takers.

    5. David Grander, Denve says:

      In the e-mail this morning, the three things that must be done are a stop doing more harm list instead of a fundamental change to the entire tax code. I think you could have done better than this. Flat tax where everyone pays a low 10 or 11 percent. Simple, effective, fair, lacking any political or special interest influences.

    6. Mike Berman, New Hav says:

      Again, the only way to reverse this tide in a sure way and get responsible leadership to represent the tax payer is to not allow people who do not pay federal income taxes to vote!!! Now is the time to ammend the voting laws and draw this line to prevent runaway spending and getting stuck into a perpetual huge voting block for corrupt politicians. We really need to do this now!!!

    7. Raleigh, NC says:

      I certainly understand that in a class war, the fact that many on the bottom pay little or no income taxes is very potent ammunition. But should we help the democrats perpetuate that war? If you count payroll taxes – including the deceitfully hidden employer portion, we actually have a pretty flat tax.

      Most Americans believe taxes are too high, even those near the bottom. We should enlist all tax payers to reign in Washington's destructive spending. And while we're at it, it would be good to end the myth that payroll taxes aren't taxes and force Washington to display the employer portion as part of total compensation.

    8. Richard Cancemi says:

      This Country is operating on a huge Ponzi scheme. It will collapse if Progressives of both parties stay in office. Progressives have turned the USA into a Titanic sailing on a doomed course! People had better wake up to reality!

      Progressives want the USA ship to sink because they believe an Orwellian life is better for us. It is they who need to be SUNK!

    9. Ben C. Ann Arbor, MI says:

      Wouldn't it be nice if we could choose which program / branch of government we could direct out taxes too? For me, the Departments of Education and Energy would not receive my money. Neither have done anything to help our country and are pretty much useless. Eliminating these two Departments would be a good start.

    10. Sam Sinderson, Pitts says:

      The FairTax would solve all the problems you lament in this column. Why doesn't the Heritage Founation actively support institution of the FairTax with the elemination of the IRS along with it? See FairTax.org.

    11. D E Huber, Willis TX says:

      Where is Fair Tax?

    12. Publius Huldah, Cook says:

      Folks! There is only one way to solve the tax problem and the budget problem: WE the People must insist that Congress be restricted to its Article I, Sec. 8 enumerated powers. We must vote out those who exceed these enumerated powers and replace them with representatives who will be faithful to the Constitution. See:
      http://publiushuldah.wordpress.com/2009/09/08/con

    13. Jill, California says:

      This is the first year I paid no income taxes. But it's not due to tax credits and other loopholes. It's because my income dropped 75% last year thanks to everything Obama and Congress are doing to destroy our economy. I'm having to survive off inheritance versus income.

      I'd gladly pay my fair share of taxes if Obama and Congress would stop destroying our economy and give me a chance to earn a living again. Until then, I think I'm doing pretty good to stay off welfare and not further burden those who are paying taxes.

    14. Ryan Day Thompson says:

      I make WAY under poverty (I'm a seminary student, husband, and father of one) and as a result I'm due around $1500 on my return. I don't know why and I don't want their freaking handout.

      I DON'T EVEN WANT THEM TO SEND ME MONEY! I DON'T WANT YOUR HANDOUT!

      Can I just send it back?

      Someone help me here,

    15. Bruce, Long Beach says:

      Stop complaining and get involved. Go to Fairtax.org

    16. Ron Jones, Mount Jul says:

      While I agree that taxes are the root of most government evils…I think that focusing on taxes is only half of the equation.

      To borrow a phrase from slick willy's campaign…"It's the SPENDING, stupid!" We argue incessantly about taxes, and rightfully so. Americans are over-taxed, over-regulated, violated, and generally abused at the hands of a hostile national(ist) government.

      However…politicians are good at two things, getting elected, and 'borrowing and spending.' For they know that their constituents want "free stuff," so they borrow what they can't tax in order to pay for these election winning freebies for the parasite class.

      Without drastic spending cuts, and soon!…our children will be "slaves on the continent their forefathers conquered."

      We must eliminate the entitlement/welfare state! Killing social security and medicare (along with all the other safety nets, subsidies, credits, aids and giveaways) is the only logical alternative. Otherwise, we're just rearranging deck chairs on the Titanic.

    17. David Muller, Fairfa says:

      Much preferable is the biblical idea of the tithe: everyone pays the same percentage of their income. Policy should seek to broaden the tax base, not narrow it, while achieving true equity rather than a spurious 'fairness.'

    18. Cindy, NH says:

      I am ashamed to say that my husband and I fall into the "gets money back plus some" category. We make around $80K, and have 5 children, so we end up getting back more than what was taken out of my husbands pay check. At one time, there was a law that you couldn't get back more than what was taken out of you pay, but the past few years, that has changed. We understand that this is not right. I really think that a "flat" tax, of say 2% would turn this country around. No more credits, not more refunds. make everyone(including businesses) pay the same percentage on what they earn. Heck, I think it would work at 1%!!!

    19. Giles says:

      The IRS tax code is a bunch of mumbo jumbo rhetoric, there is no way that anyone including IRS workers understand in a direct way what the code does and does not do. The complexity lends itself to corruption beyond control. Apparently the POTUS does not understand the tax code or he would already understand the re distribution of wealth that occurs when the top 10% income earners pay 71% of the taxes and we are on the road to more than 50% of the working citizens paying no taxes, but receiving credits once again placing the burden on fewer and fewer people, whether it is a big company or a single taxpayer, this is still redistribution of wealth in the worst way. The government collects and then doles it back out and refuses to be accountable to anyone. The IRS needs to be downsized to as one suggestion a rule book containing no more "words" than the original Constitution. I would suggest a VAT tax would not be a bad thing IF income tax as we now have it were abolished AND the government practiced open fiscal responsibility, no more pork, no more special interests, no more spending, spending, spending, reduce the agencies within the federal government placing those agencies back in the states themselves, i.e. Dept of Education, Dept. of Agriculture, etc. The POTUS is personally micromanaging things states should be doing and wasting time when he should be managing our military affairs to protect freedom in this country and overseas.

    20. Blair, Franconia, NH says:

      Let's go back to the way we paid our bills as a country before we became taxoholics.

      That was through tariffs. Unfortunately, the WTO would probably fine us, but here's a

      thought. Give our friends preferential treatment and screw China, Russia, and Venezuela, in the process. Petoveza wants to sell its oil here, Hugo Chavez will have

      to pay a 500% tariff on it. The same with other OPEC countries. If we jacked the price

      of foreign, (RE: OPEC), oil, up significantly, we could finance our own oil industry

      and buy oil from Canada and Mexico for relatively small price. We also have the food

      weapon. If OPEC "Lower your tariffs, or else we'll cut off your oil." We could tell it:

      "Lower the price of your oil, or else we'll cut off your food." The grain producers should take a page out of the oil producers' book, and form their own cartel——

      OGEC—–the Organization of Grain Exporting Countries.

    21. Bob Hall, Syosset, n says:

      This only serves to call for the repeal if the 16th amendment. The constitution calls for the federal government to lay and collect taxes for the general welfare, not redistribution of wealth. Therefore the only intelligent solution is a flat tax. No deductions no capital gains simply same for all. This would mean you could submit your yearly tax on one sheet of paper. And everyone would understand the tax code instead of what we have now where no one understands the code.

    22. Pat in Wasilla Alask says:

      I really don't understand how this system works. I understand it is bad. We say it is reaching the tipping point of destruction. We have always had these burdens. So I ask what does happen at the tipping point? The USA will still be here, right? We will still have our services, right? I am too young to know the great depression but does America just close it doors or what? I do know if I write too many checks my account is closed but what happens to nations?

    23. bigdave, ocala fl says:

      I wish HERITAGE would post emails faster so we could comment and exchange ideas. This is the only way we can take back our country from the communists…oh NO? Where did all the little commie/ultra radical CZARS come from? HUH? Are you folks paying ATTENTION? You think taxes are high NOW?! AINT SEEN NOTHIN YET! The MEDIA admitted(Tom Brokejaw and Charlie Rose admitted NOBODY KNOWS WHO OBAMA IS!!!!!!!) Obama was a total UNKNOWN. How many HUNDREDS OF LAWYERS were sent to Alaska to DIG UP WHATEVER on Palin? Why was this NOT DONE with Obama?! You will discover soon that Obama is desperately trying to REGULATE the INTERNET, TELEVISION PROGRAMMING and TALK RADIO!!!! This is not COMMUNIST ACTIVITY?! Better wake up people!

    24. Nick, Los Angeles says:

      Arguing the ins and outs of the "income" tax, a term that the IRS refuses to define in it's code, is pointless. The "income" is illegal for a couple of reasons. The 16th amendment was not properly ratified. The government lied and said it was and enforces it at the end of a gun. Even if it was, SCOTUS has ruled several times that the 16th gave the Congress NO NEW POWER OF TAXATION! Debating income tax reform,who isn't paying, and how much should we be paying is nothing more than semantics. There is no law requiring people to pay so the only argument should be is when do we stop letting the bankers continue to rob us. Another point, the progressive tax is one of the 10 tenets of communism set in writing by Marx. Do you still want to argue for it?

    25. Bob Flannery London, says:

      Everyone should pay TAXES. They all use roads ,bridges, police etc. Put on a National sales tax on all purchased items then reduce federal income tax. Let everyone pay for the use of roads and things. They need to get jobs. Why should we who work let these folk draw money for not working.

    26. Viperdoc, Montgomery says:

      Institute the fair tax. Everyone pays something that way. Shucks, that will never happen because it would put the IRS as we know it out of business.

    27. Normca says:

      We need a flat tax where everyone pays the same percentage of their income. Instead what we will have thrown at us, for our own good, is a VAT. That will be added onto the existing taxes; federal,state and local. And then inflation will hit us, increasing the percentage of decrease of our spending power, even further than the 3% reduction in the last year. The crowed who exempts themselves from what they sign, think we cannot manage our own money, so they will do it. And the takers will continue to pay zero. How’s that hope and change working out in Obama’s America ?

    28. KC - New Mexico says:

      I like Don's idea but it would be pushed back in Congress by IRS, tax accountants, tax legal teams/companies etc. Their jobs would not be needed – yea! Those that do not work (10%) would not pay but everyone else would. The problem beyond the push back from the tax folks would be our current administration who wants to make sure the poor get it all. Entitlement does not work in a 10% tax rule. It must be everyone who is taxed. Good idea Don.

    29. Tom Berquist, Pennsylvania says:

      I just sent a check to DC for over $2500. It makes me sick to know that my money is going to be wasted. If all do not feel the pain than the those paying no taxes will continue to vote in these outrageous politicians. We need a flat 11% flat tax off gross income for all individuals and corporations….period. One piece of paper and no exceptions. I put in my memo on my check KMA the same as last year and put an American flag upside down on the lower left corner of my return. We must put in leaders that are going to make the difficult decisions otherwise this Republic is lost for all.

    30. Portland, OR says:

      The problem with socialism is, eventually you run out of other peoples money.
      You cannot make less wealthy people wealthy by redistributing more wealthy people’s money. In other words, you can’t make poor people rich by making rich people poor.
      Congress is past the point of being efficient at anything.

    31. Portland, OR says:

      Take a good look at the people surrounding this president and you will realize they don’t give a rats rear end about your freedom.
      It’s not republicans or democrats folks, its government and citizens.
      This is not a new phenomenon, it has played out the same since the birth of man.
      Your government either fears you or you fear your government. One is liberty and the other is tyranny. Power tends t corrupt and absolute power corrupts absolutely. If obama doesn’t resemble this statement, no one does.
      The only way to stop this uncontrollable slide into despotism is to take away all the money. That’s when the rats lose interest.

    32. Drew Page, IL says:

      “The power to tax is the power to destroy.” These words were never more true than today. Many of our elected representatives over the years have betrayed the public trust. They have taken money from the Social Security Trust Fund and used it for other purposes without our knowledge or consent. They have lined their own pockets and those of their friends and contributors by taking high salaries for themselves subject to automatic raises, ridulously high (80% of salary) pensions, “cadillac” insurance plans, have used their office to obtain jobs for relatives and friends, have benefited from the largess of lobbyists and have used their position while in office to secure lucrative jobs for themselves and their family members, after leaving office. They have bought votes from their constituents with pork barrel projects, social welfare programs and government giveaways.

      We have now arrived at the point where nearly 50% of those in the country pay no federal income taxes. The percentage of those not paying federal income taxes is projected to be in excess of 50% within the coming year. When the majority of voters in this country can vote for more and more government freebees for themselves, leaving the minority of voters (federal income tax payers) to pay for these freebees, they will continue to do so, and politicians will continue to pander to these people.

      Tea Party protesters are labeled with all kinds of nasty names by those waiting in line for their government handouts and the politicians who promise them. The protesters are maligned by the liberal, ‘lame’ stream media as angry mobs of racists. The protesters are angry, to be sure. They are angry with ever-increasing government spending, secrecy, lack of accountability and the arrogance and hostility they encounter when demanding answers from their representatives. They are angry at the government for what it has allowed to happen in the banking community, the Wall Street bailouts and the resulting loss of jobs. They are angry at the administration’s high-handed approach to health care reform, to benefit the few at the expense of the many. Many are angry at what they see as being an overt plunge into socialism, at their expense and against their will.

      And I am one of them.

    33. Zander, Georgia says:

      This is why we need the FAIR TAX!!!!

      Everyone pays then!

      http://www.onlinetaxrevolt.com

    34. Ken Jarvis says:

      Why does the HF, GOP, and Cs want to MAKE THINGS COMPLICATED?

      We NEED ONLY Need One Tax,
      a NATIONAL SALES TAX – NSTx
      Where ALL taxes are PAID
      When the purchase is made.

      THAT is the SIMPLE solution,
      but I understand the RICH HF BACKERS would end up paying MORE
      and so they will oppose it.
      LVKen7@Gmail.com

    35. mjr,Auburndale,FL says:

      Take away all of the large variety of other taxes we're paying now and 10% isn't going to be other than about what we pay now. And the biggest thrill: Bye-bye IRS! And that's not a bad result, is it? (Well that's before all the huge number of new taxes dreamt up by Obama and Pelosi, etc., to break us down are put in, done so socialism doesn't look so bad in the end. But that's another story.)

    36. KC - New Mexico says:

      I have paid taxes from the moment I started working – some 40+ years ago. Today, I have a low 6 digit income and work 3 jobs. I continue to pay taxes – income, gross receipts, property, etc. Yet, there are many in NM who never pay, do not work, do not want to work, have no incentive, get food subsidie, drive nice new cars, have poor health, etc. So – yes I am angry!

      The simple solution – get rid of income tax and property tax. All tax for government (local, state, federal) will come from gross receipts. Everybody pays – no exemptions including churches, etc. Yes, prices will be higher due to material being taxed for the producers, but in the long run, we will have more tax revenue.

    37. Eddie MacIsaac, San Diego, CA says:

      The Feds get no revenue from gasoline sales tax?

      The price should go down immediately!

    38. Paul, NH says:

      Problem with the simplistic idea some of you have that "we should just go to a fair (consumption) tax" is that we probably will.

      Only thing is it won't be what you expect (more "change" we can do without). We'll adopt a horrible form of it called the VAT. But we won't lose the income tax. We'll have both. The guv'ment has never gotten rid of one tax when putting in another, it always keeps and expands both.

      What it IS time for is reformation:

      Time to repeal (not replace) everything that goes beyond the enumerated powers of the federal government. Yes that means eliminating the government dole, subsidies, grants, payouts to the states, social security, medicare, medicaid, and universal healthcare. They're not in the enumerated powers, so they have to go. No compromises. No "pet projects" can remain.

      Lest you think me cruel and heartless – My brother and I are ready to take on the "burden" of our mother and our in-laws. It will be difficult, but it is OUR responsibility. And if we didn't have to pay the confiscatory wealth redistribution penalties on our income, it wouldn't be such a burden either.

      Time for a minimalist government, again. Time for personal and family and neighbor responsibility. Time to go back to our roots. "Regress" to our origins and we can hold our selves on firm footing with heads held high. But the current "progressive" policies will simply lead to crash and burn (see: California, France, Germany, Greece)

    39. David A. White, Al. says:

      We need term limits for congress, some of the people get into the house and senate and stay forever. West Va. has a senator over 90 years old, and the average age of the senate is approaching 80 years of age. We elect these people to office and they will do anything to stay. We have senators screaming about the national debt and how we cannot afford anything new and these same senators receive billions for their states in pork projects. The vast majority of these people are way past full retirement age and need to be replaced

    40. CATHY LANE says:

      A woman I am aquainted with told me her husband was fired from his job twice last year for not showing up for work. He worked a total of ten weeks the whole year. She is a stay at home mom and gets food stamps. Medicaid pays for their medical and dental. They go to the local crisis centers for help with their utilities. Free school lunches for their three kids and they got back a total of $6000 in tax refund. That is where we are in this country.

    41. Don, Texas says:

      Dissolve the IRS and take 10% of everyone’s income. Fair and simple.

    42. Pingback: Thank You To Those Who Still Pay Taxes

    43. Daniel Johnston - Ta says:

      Your comments are interesting and shows that you are both naive and that you don't know the US Constitution. You are under the impression that the money that is collected by the IRS goes to Government services. (That's where you are naive.) Google the Peter Grace commission. Also, read the Constitution. Then Google Sheldon Cohen or America, Freedom to Fascism. You'll be in for a crude awaking assuming you have an open mind. Actually the way the current system works, you have some valid points. Why should people get refunds when they didn't pay into the system? Your question makes sense. But the only reason for the income tax is to feed the monster called the FEDERAL RESERVE BOARD. I'm not a crack pot, an extremist, or a potential right wing terrorist. I'm just a lowly citizen of this country that doesn't automatically believe everything he sees or hears, especially from the "establishment" media. Our country and economy is on the verge of collapse, and the "establishment media" fiddles away. You need to know the statements about being naive and not knowing the US Constitution were not meant in a derogatory way. You wrote a fine article that was very carefully thought out. Sincerely, Daniel Johnston

    44. wallyblu Zion IL says:

      It’s very simple, there should be no refundable tax credits.

      Once your tax liability reaches zero the only refund you should get is the money you actually over-paid into the tax fund.

      Why is there no common sense? A refundable credit is nothing more than a redistribution of some other payer’s tax money.

    45. Joseph Gerant, Boyne City, Michigan says:

      I find it incredible that the Fair Tax has been around in excess of 13 years. Only Ron Paul and Huckabee will talk about it. This system will revolutionize American economics and politics. Our congress will not pass it because it cuts into their perks. The Tea Partys know this and pain brings change. Watch out Republicans. Talk is cheap. I believe what you do, not what you say.

    46. K.O. - Ohio says:

      Our family is among the half that will recieve money back from the gov't, taken from the "other half". I do not agree with this current tax system and from what I understand about it, am a proponent of the Fair Tax. However, I do take issue with the Heritage Foundation, Neil Bortz, and occassionaly Rush, on the way they describe the half of the population my family happens to be in. Somehow, they've come to the conclusion that we are all lazy good for nothings that can't wait to steal money from those who've managed to do much better in life. I won't deny that their are plenty of those whose lives revolve around screwing the system and everyone else so they can continue to be 'lazy good for nothing's'. The problem with assuming that we are all that way goes with the saying "Never assume anything, it only makes an a@# out of you and me." In my families case my husband has worked for over ten years at the same company and before we started our family I worked as well. Now, my husband and I came to the realization that the amount of money I would make at the kind of jobs I can get would not be enough to pay for childcare, and unlike our current culture we believe that children are always a blessing, and do not view them as a burden. Now we have a growing family and my husband works full time, and goes to school for his B.A., (which we fear that with B.O. as president will not result in the better career and better life we are currently striving for). So, of course we fall into that portion of the population that is considered just plain lazy by the other group, despite the fact that the majority of people I know that fall into our group are just as hard working. Do not forget that it is not we the people's fault that the 'income tax' exists, we just happen to be a as much a victim as you of this divisive form of class warfare, the majority of us do not agree with it anymore than the other half does, for the mere fact that it does not respect our dignity as human persons, which is exactly what it intends to do, de-humanize us, and create even more division with our country, it makes it much easier for a totalitarian regime to take control, "A house divided will not stand" neither will a country.

    47. Judith in Michigan says:

      Remember that woman from Detroit who became nationally infamous because she was lining up to get her share of Obama’s “stash” (money)? She didn’t know where he got it from nor did she care. She just wanted her share.. That is why she voted for Mr. O. He promised freebies. Then, there was the lady who was thrilled when O won, because he was going to pay her mortgage and buy gas for her car.

      The one issue that most commentators and politicians avoid speaking about is the fact that this attitude is deliberatly fostered and promoted in order for Progressives to stay in power. It is called “vote buying”. These liberals know the effects of their fiscal/tax policies are, but staying in power is more important.
      Keep them dependent! As Rep Dingall (D, MI) said, “control the people!!”.

      Nothing will ever change until people stop being afraid to verbally confront this cancer that is destroying the United States. That is why liberals are so hysterical about the Tea Party movement. We are no longer keeping quiet. A short while ago, Hillary, Ms. Pelosi , etc all agreed that dissent was the highest form of patriotism.
      Indeed it is.

    48. mjr,Auburndale,FL says:

      While it’s true that we pay no taxes (although we do file a return,) we manage with difficulty to both pay our bills and not be a burden for our children (at ages 69 & 73.) We own our small home and vehicle. We’ve had very large medical bills at times for each of us and must take many prescriptions to keep going. When my husband was working he stuck with his job through lots of times when he could have made much better money with other companies who would have liked him to work for them for much more money. His reason: To have consistent good medical benefits, which we pay to keep now, and a pension when we retired. Most of his working life he had to pay the maximum amount into social security all those years, rather like you would into an insurance program.

      So now that many seem to espouse and resent those of us receiving social security and Medicare when needed and have such a low income that we pay no taxes, we wonder if that’s the same viewpoint that they have of their own parents and grand-parents? Or do they think that providing total living expenses and medical care for them is what they should do, in addition to raising their own children of course. Or are they of the same ilk as it appears in the new Obamacare fiasco in thinking that we should just opt out since we’re a “burden on the system.”

      Take away our pride in doing our very conservative best to stay independent and not be a burden on our children and many will decide out of guilt that it’s only fair to “opt out.” Perhaps that’s the ultimate aim of Obamacare, done simply by denying needed care, but how long will a society stay sane if this is the the result. Only the extremely arrogant and unscrupulous will remain. Good people of fair minds need not apply.

    49. Ed H., Albuquerque, says:

      It is so hard to believe, that people actually think that they're going to get "Something for Nothing". Are these people actually that dense, to think that they are getting away with something?? This country is heading for "Third World" territory, and these people sit on their butts, and think everything is just going to continue. So, what is going to happen, when they realize that there is NO MONEY, to pay for all these marvelous free benefits??? They'll be sitting at home, with no money, no job, no training, and no expectations. Sounds OK, until "The Bill Comes Due," then, they might come to their senses. Of course, by that time, it will be way too late.

    50. Michael, Washington DC says:

      I have been unemployed for over a year. After working for the last 27 and paying into unemployment insurance. I am a parent of two minor children. My last salary was $72.5k a year, and I dutifully paid my taxes. Now, through unemployment, I stand to make a little over $9k if I don’t find employment this year. That’s $750 a month – that doesn’t cover my mortgage – and what are we supposed to eat?? Do you really think that a man in my position should be required to pay taxes on that $9k? I waited a year before filing for unemployment (running out my personal savings); it was one of my life’s ambitions to never find myself in that humiliating state. But here I am. And me? I could be you. Believe it. How many months can you last without employment?

      As for that top 10% that pay 73% of the taxes? I was a member of that top 10% for many years – I could afford to pay my taxes. I don’t think people realize that over 40% of American wealth is held by less than 1% of the American populace. And that 1% is right on the top and it’s a steep climb from 91% to 100.

    51. Tom Kansas says:

      Your open sounds to me that you, along with obama would do away with we seniors that have paid taxes along with Soc. Sec. &medicare all of our lives.

      Sort of like “We know what you’ve done for us, but what the hell have you done for us today” Which of course is the attitude of the liberal progresocrats, and the rest of the money grubbers. If that is your attitude, I will regret leaving your following.

    52. floyd says:

      the problem with going to a flat "INCOME" tax is alot of income is not reported

      an estimated 1.5 trillion annuallly a year.. per some sources I would not be suprised if it were more.

      I know of one couple around 50 years old that claim they have never even filed taxes they are self employed no real records

      a flat sales tax collets from all equaly baised on individual living standards.

    53. Tom, loc Kansas says:

      Once again, your first thoughts are “woe am I, the freeloaders are doing us all in”
      Sounds that you, like the liberal progressocrats want us all to do the right thing and die.

      Even though we have worked all of our lives paid taxes Soc. Sec. F.I.C.A. you denigrate us.Where is the outrage with the thieves that took the Soc. Sec. funds belonging to us and blew them.

      Like obummer, you too want us to crawl to a corner and die. Shame on you.

    54. Todd, Albany OR says:

      There are a lot of people here arguing for the Fair Tax or a flat tax of some arbitrary rate. I am in favor of a flat tax since all need to understand that government is expensive and all should experience directly that it is to their benefit to control the size of government. But instead of a flat tax of some arbitrary amount, I propose the following:

      A flat tax rate derived directly from the policies passed by the Congress and signed into law by the President. All Americans would pay a tax rate equal to the most recently passed budget (that happens in the Fall I believe) divided by the CBO's score of what that budget will do to our GDP. In other words, we would all pay a tax rate equal to (budget)/(projected GDP).

      There are four possible scenarios in any given year: 1) Congress (and the President by his signature) increase spending and pass bad legislation –> CBO projects GDP growth to slow or shrink –> tax rate goes up notably–> we punish the Congress and President at the ballot box. 2) The same folks reduce spending and pass good legislation –> GDP is projected to grow –> tax rate goes down –> we reward Congress and the President at the ballot box. Scenarios 3 (low spending; bad legislation) and 4 (high spending; good legislation) would tend to keep the tax rates about the same but would not be as rewarding for the accountable folks as scenario 2 so they should tend toward scenario 2. In any case, they shoud avoid scenario 1 (where we are now) like the plague.

      There would be a few notable exceptions like wartime, etc., but for the most part, this sounds kind of like automatic pay-go with direct consequences for those responsible. Our bills will be paid and our elected representatives would be incentivized to behave responsibly.

      There is documentation out there that records what this tax rate would be and I've found found it before by just surfing around breifly on the net. The historical summary is that this rate started out at ~2% in the early part of the 20th century and has recently made a notable push over the last couple years into the low 20's.

      What do you think? If you think this makes sense, please mention it to your elected Representative.

    55. R. McElroy, Georgia says:

      Question: Are retirees included in the 50% of non-payers? If so, what percentage of the non-payers are retirees? And, why should they be lumped in with the "bad guys"? I am a retiree and paid taxes every year of my working life; and even now, my Social Security and other retirement income is taxed! I hope some one can give an accurate answer. Thanks.

    56. toledofan says:

      Regardless of what we want, a flat tax would be perfect for me, nothing is going to change until the current Congress and Administration are out. The current Congress and Administration can't rewrite any laws or redo any tax codes because to them they need and want the money. If November comes and goes and these guys aren't removed, then, it won't matter, we'll be stuck and the tax man will just keep coming to collect his due.

    57. Ruth, St. Helena Isl says:

      John Adams said, "There are only two people of value on the face of the earth; those with committment and those who require the committment of others." I suggest you re-read Blair from Franconia, NH; Portland, OR; Drew Page, IL; BUT MOST ESPECIALLY, CATHY LANE. I live in an area of the country that is comprised of a sufficient amount of the same kind of people that use our tax dollars to fill three grocery carts so high one can hardly see over the top of it, meantime by two women so heavy, that if they fell down it would take a derrick to get them up. Of course, their health is overseen by Medicaid, so they don't care. More than likely, the cost of the derrick would be covered by some government agency at our expense. I propose that we take the tax money deemed for the Federal government, send it to the Treasurer of each of our subsequent states to hold in escrow. We then put pressure on our Governor and elected officials within our state to secede from the Union. NO UNION; NO PRESIDENT. He can't control what no longer exists. When they are all out of Washington, we start over, if it's convenient. When asked by a fellow Philadelphian July 4th, 1776 if we were a republic or a monarchy, Benjamin Franklin answered; "We are a republic if we can keep it". HOW IMPORTANT IS YOUR FREEDOM AND LIBERTY?

    58. Drew Page, IL says:

      This is one of the best series of comments to a Heritage article that I have read. Real comments coming from real people.

      I sympathize and agree with folks who have paid into Social Security and Medicare for 45 years and are now retired. These benefits are not an "entitlement". They have earned their Social Security and Medicare benefits they paid for over their working lives. These people fulfilled their end of the bargain.

      I also sympathize and agree with people who have paid into the system for many years and who have been laid-off or otherwise lost their jobs. This is a frieghtening nightmare, especially when you have a family counting on you for support. I know what goes through a decent man or woman's mind when they must face their children every day they are unemployed. It's miserable and it's humilitating. These too are people who paid taxes to fund Unemployment Compensation. I do not believe that such compensation should be subject to federal or state income taxes.

      I blame our government officials (past presidents and members of Congress) for their thefts of Social Security funds that were to be used only to provide the intended benefits, leaving only worthless IOUs. These "loans" from Social Security were never explained to, or approved by, the American public. In that regard, our elected officials betrayed us. Now, they have the nerve to proclaim to the public that "Social Security is bankrupt", as though we had something to do with it. Now, it's our fault.

      Today we have a government that subsidizes failure and penalizes success. Our government has taxed and regulated American businesses nearly to the point of uncompetitiveness. The current administration portrays "business" as the enemy of the individual, a reckless, greedy entity that must be regulated and controlled by a strong government for the protection of "the people".

      Perhaps someone in government should ask the tens of millions of unemployed if they would prefer to see businesses taxed more and regulated out of business? Perhaps someone in government should ask where the paychecks going to come from that pay the bills and the taxes once those nasty old businesses are gone?

      We need a government friendly to business, one that will promote the success of business and make it easier for business to function and grow, putting more Americans to work. With business expansion and profitability comes more employment and advancement opportunity for Americans, the need for subsidy decreases and the tax revenue increases. The best help the government can provide its citizens is to provide them the opportunity to help themselves.

    59. edda says:

      The man, woman or political party that comes up with a workable plan to dismantle 3 – I said 3 – of the most wasteful federal agencies (Energy & Education are definitely 2) deserves to be elected. That same man, woman or party that comes up with a workable plan to slash federal pensions and salaries deserves to be elected. Some government retirees vacation 6-8 months of the year; some who have been rehired at their former agencies as ‘consultants’ make more now than when they were employees (e.g., State Dept.) I speak of personal acquaintances here. They are laughing at America’s current situation – it doesn’t touch them at all.

    60. Mort, from Greensburg says:

      This is the same old FairTax argument, completely ignoring the argument that The Fed and The IRS,the 17th Amendment and the use of your SSN are intrinsicly tied together. The 16th Amendment, the 17th Amendment and the passing of the Federal Reserve Act, ALL occured in 1913, under Woodrow Wilson. Twenty years later, FDR lowered the boom on the biggest government bailout (takeover), in history. They took our gold, took away our right to get it back, and in the name of “national security” insisted on “helping” everyone untill today, noone knows how to take care of themselves. Abolish the Fed, the IRS and the tax code. Repeal the 16th and 17th Amendments. Repeal the War Powers Act of Mar. 4th, 1933. Fix the 14th Amendment; we are not “subjects”, and will never be “subject to the jurisdiction thereof”. You only show your lack of knowlege and understanding of the truth behind the tax code. And that is this. It came straight from Karl Marx and is therein deemed necessary to the socialist agenda. Because”from each according to his means, to each according to his needs,” is nothing more than social ENVY! Its Communist, It’s Jealousy, and It’s one of the greastest sins in the bible, and IT’S WRONG. Don’t pick on the details of the system, ABOLISH the system. IT’S WRONG!

    61. Steve, Huntington Be says:

      This article is way, way off-base. Yes there are a lot of people that don't pay any taxes, and that's usually because they didn't earn any money or barely enough to put food on the table and a roof over their head. Now let's look at the REAL reasons people end up not paying taxes:

      1. They are retired, and have paid into the system for years, and yes they are entitled to their social security. (this is 15%)

      2. They have lost their job, remember we have 10% unemployment (reported) and that number is probably closer to 20% that have no job or are under-employed. (so this is another 10 to 20%)

      3. Young adults who are in school still or are just starting out. (10%)

      Here is your 47% that didn't pay this year. That doesn't mean that they are some form of deadbeat. The fact of the matter is that income tax rates right now are at their lowest levels in 50 years for the highest income earners. Corporate income tax used to account for over 30% of the federal receipts…this figure accounts for now 12%.

      I understand that no one wants to pay taxes, but I think it's totally immoral to sit here and say that people who can't make money or don't make money should be paying up…. the fact of the matter is that the tax breaks over the past 10 years have lowered taxes at the top and shifted the burden to the middle and bottom proportionally. We have a progressive tax system that breaks down taxes so that each segment of your income is taxed at that rate. Personal tax credits, like home mortgage interest encourage people like me to buy a house instead of rent and made it so I could afford a house more easily when I was young.

      What really confuses me is this. Why are people concerned with running up debts now all of the sudden? In the 80's we bloated our defense budgets (permanently) and tripled our debt under the watch of Reagan and Bush 1… then during the 90's Clinton ran (partially because Perot pushed the issue) on balancing the budget and he ended up doing that. Then Bush 2 came in and had another Voodoo economic budget and basically broke the bank more than any president has EVER done before or since. Where in the world were all the Tea Partiers when Bush was blowing up your unearned income tax revenue in an unnecessary war and handing it over to the top tax earners by lowering the top income tax bracket and doing nothing for the middle and bottom?

      Anyway, to be honest, I like our freeway system, my clean water, my safe food, the education system I send my kids to, the police, fire, national guard, national parks, communication infrastructure, the internet, television, weather satelites and all the other things we ALL seem to be taking for granted.

      So pay up your taxes if you made money, stop bitching about it and try to do something to help someone else get ahead in life instead whining about how you pay too much in taxes for all of the great things this country affords you!

    62. Chuck, TX says:

      Only those who pay taxes should be allowed to vote.

      Everyone else: be quietly greatful to live in the land of opportunity, or chip in and vote.

    63. Mike, North Carolina says:

      Describing how the statist politicians are taking away our freedoms, resources, and security, as consequently decreasingly free individuals and as the decreasingly free United States of America, is good for at least trying to point out to us all how those power and money-grabbing Statist “wolves in sheep’s clothing” politicians are yet again showing and proving true what Thomas Jefferson said (Quote) “Government big enough to give you everything you want is big enough to take everything you have. The course of history shows that as government power grows, liberty decreases”.

      However, trying to make recommendations to such politicians, such as those in control of Congress (not to mention their Comrade now living in the White House), listing how they should stop their government power growing ways is rather like trying to tell such “wolves in sheep’s clothing” politicians to stop doing what they live to do…grow government power, and so also decrease liberty, to take control of everybody on the farm, and have everything and everybody, especially the farmers, blamed for their doing so, except themselves, of course.

      Such politicians, and those who surrender to them either willingly or by default, are unfortunately showing how “Those who would surrender liberty for a little (imagined) security, deserve neither and will lose both” as Benjamin Franklin said, and how “The American Republic will succeed until the politicians realize they can bribe the people with their own money”, as even Alexis de Tocqueville said.

      So the bottom line is that what we, the people, must do is not to engage in the exercise in futility of recommending to government power growing politicians how to stop their government power growing and liberty decreasing ways, but instead we must get them out of power, in any and every peaceful way we possibly can, as soon as we possibly can, before they finish turning real freedom and security of the people into a “Politically Incorrect” and fading memory, now sooner than later.

    64. frank z says:

      While Mr Obama & his followers are too far to the right, god bless us since the American voted them in, your views are often too far to the left. It appears that you are supporting the old saying that "to the victors go the spoils". Instead of broadbrushing the entire spectrum of problems, you should be addressing the shortcomings on a case by case basis. Like, let's start with 'fixing' the medicare system instead of reinventing the wheel. I don't see either party addressing the problems, just continually supporting their position, right or wrong. Big business is just that, too big.

    65. Jeanne Stotler, wood says:

      A federal sales tax would be the fairest, there are many who "work under the table", a lot of them illegal, who would have to pay taxes this way. Interest on high yeilding accts. could also be taxed, somehow we must close the loop hole from off shore accts, maybe a tax as they are recieved back in this country. I believe a sales tax of less than 10% would do it, add local sales tax up to 5%, no state should be permitted to tax more that that, and eliminate Income tax, the death tax etc. One thing that gripes me, is that if your parents die you have to sell the family farm or business to pay this tax. We need a fair tax, there are those who pay no taxes through illegal means, and those who are collecting money from tax payers, yes they have been doing it for four and five generations. Eliminate welfare, make it a work program, if you need food, work for the county or state to get the money, roads need work, crops need to be picked. Calif and Fla have fruit trees, they need to be sprayed and the fruit picked, potatoes need to be planted and later dug up. NO HONEST labor is athing to be aSHAMED OF, SITTING ON YOUR BUTT AND EXPECTING OTHERS to work for your benefit is. Jamestown and Plymouth had it right, all able bodied were expected to work or they didn't eat.

    66. Francisco, Bandera, says:

      Everyone talks about the taxes, those at the top pay the most and those at the

      bottom the least or none at all. The current system will eventually implode and

      all of us will suffer, including the "Politicians" and "Pork Bellying". It is evident

      they don't give a damn and they are our "elected representitives. WE put them

      there. I'm not sure what the "Fair Tax" is but a flat 10% tax that everyone pays

      irrigardless of income and elemination of the credits will turn our defict around.

      It won't happen overnight but it will happen and we can again feel "Proud" to say

      our economy is the greatest in the world. Spend, spend, spend will not make it

      happen as "obama" believes. The old saying a penny saved is a penny earned

      is still the best advice anyone including the gov't can give to the country!!!

    67. Drew Page, IL says:

      To Steve in Huntington Beach, CA — I think you need to recheck you statistics my friend. Retirees living on Social Security and a pension do pay federal income taxes. It would be nice if we didn't have to, but we do.

      We also have a lot of people in this countrythat are here illegally. They work for cash and don't pay any federal income tax.

      Yeah, there are a lot of people who are out of work because of the financial meltdown instigated because our government wanted to give mortgages to people who normally couldn't qualify to make the payments. When the ineveitable happens and these mortgages are foreclosed for non-payment, the people evicted from these homes are on camera, dabbing away their tears that the mean old banks kicked them out. And who is right there there telling the rest of us that more taxes are needed so we can pay the mortgages of those that can't? Mr. Obama, that's who.

      Now you go right ahead and start blaming George Bush and Ronald Reagan. You may as well throw in Eisenhauer and Abe Lincoln too, if it makes you feel any better. They had as much to do with our current economic meltdown as King Tut.

      I know what the deficit was 15 months ago and what it is now, and who caused it. And if Mr. O is so concerned about the cost of the war, he and his Democrat mob that controls Congress have had the power over the past 15 months to pull the troops out of Iraq and Afghanistan and to stop funding it. So don't start with this guff about we didn't mind spending money on the war nonesense. Apparently, Mr. O doesn't either.

      I had no problem with the taxes I paid up until Mr. O took office. I do have a problem with what my taxes are going to be to support all of his socialized agenda projects. How's that $800 billion dollar Stimulus bill working out getting everybody back to work? You know, the one with the 9,000 earmarks that he was going to veto, but didn't. The one that was going to keep unemployment under 8%, but didn't. The one he meant to read, but didn't.. That one.

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