Fair Share

"Nobody likes paying taxes but sometimes you have to suck it up and do what you have to do. I know that in order to reap the benefits of living in this country, I have to pay taxes. I may moan and groan every other Friday after seeing that Uncle Sam has dipped his hand into my purse once again, but I pay the taxes. Point blank. And I only make $9 an hour for 36 hours each week. The people that have no choice in whether or not they pay taxes are the people who need that money to stay in their paychecks the most. The people who get away with paying relatively little to no taxes are the people that can afford it. And that's ridiculous..."

I wrote the above comment after reading a few blogs about the increase in Federal income tax rates that will become effective at the end of next year. The top rates may climb as high as 45% (39.6% income tax and 5.4% surcharge) and will apply to taxpayers with more than $1,000,000 taxable income (income after deductions and exclusions). The rates will decrease from there with the next lower bracket being taxpayers with more than $500,000 up to (and including) $1,000,000 taxable income, and the third highest bracket will include taxpayers with more than $350,000 up to (and including) $500,000 taxable income. The proposed surcharges added to the enacted statutory rates are an effort to fund the healthcare reform plan that President Obama has been pushing since his candidacy.

I think the idea of higher income earning individuals having to pay more taxes makes absolute sense. It's supposed to be all about "fair share", right? You don't have to be a tax expert to know that the more money you make, the less a certain percentage of it means to you. If I only had $10 in my pocket, it would be harder for me to give you $1.08 than it would if I had $1,200 and you asked for $398. It would be easier still for me to give you $818 if I had $2,400 right now. Now, if you asked for half, we might have some issues. Now multiply all of those numbers by 1,000 and let's talk taxes.

Like I said above, the people who need to keep their money in their pockets are the ones who are paying. People with the means to pay are paying relatively little to no tax on the money they are making... how?... they're "minimizing" their liabilities by paying lawyers and tax accountants a lot of money to find loopholes in the tax law. It doesn't take a pronouncement from FASB to understand that that's unfair. If I have to be "burdened" with paying taxes, then so should the multi-millionaire and he should have to pay at a higher statutory rate than somebody making $400,000, because 35% of $400,000 is worth a whole lot more than 35% of a couple million dollars.


The blogs that inspired this one:
TaxProf Blog: http://taxprof.typepad.com/taxprof_blog/2009/07/bartlett-robin-hood.html
TaxProf Blog: http://taxprof.typepad.com/taxprof_blog/2009/07/cbpp-house-surtax-on-wealthy-is-fair-.html
TaxProf Blog: http://taxprof.typepad.com/taxprof_blog/2009/07/house-democrat.html
Roth & Co, PC: http://www.rothcpa.com/archives/004951.php