Not all pay equally on Tax Day
Unless you’ve gotten an extension, or you didn’t make anything last year, today is the last day you can file your federal income tax return — yes, the dreaded April 15th deadline.
If you made around the same amount or less than I did, you’re probably getting a refund check back for the entire amount of income tax that came out of your paycheck.
Congratulations, I guess.
It’s like we get all the federal government provides to us — except entitlements like Medicare and Social Security — free of charge. Meanwhile, others are paying a hefty sum.
According to the 2003 federal income tax rates, some people paid up to 35 percent of their income to the government. That’s like working for more than four months of the year just to pay the government. That’s not counting state income taxes (excluding Florida). That’s right, while the “evil rich” — here I’m using the populist message that often comes from liberals — paid 35 percent of their income to the federal government, we got to pay nothing!
This unbelievable bargain is brought to us by what are called the “progressive income tax system” and the “earned income tax credit” (EITC).
The progressive income tax system is where government takes an increasing proportion of income from someone as income increases. That means that wealthier people not only pay more income taxes in dollar amounts but also in percentages. According to , the 2003 federal income tax rate for those single people making no more than $7,000 per year was 10 percent, while the rate for those single people making more than around $311,000 per year was 35 percent.
I’ve always thought it funny that God only asks for 10 percent in the Bible, but the government asks for more.
The EITC is a credit for low-income workers, which reduces the amount of tax they owe, often resulting in a refund. In other words, that’s what gets me and many other low-income, working college students off the hook. We get back a refund for all of the income tax money we paid.
Makes sense, right? Makes for a good, healthy economic system, right? Wrong.
One of the reasons the federal government and many other states went into the red during the recent recession was because they relied on income tax. When income goes down due to economic downturns, the amount collected from that income goes down. Florida and a few other states not relying on income tax managed to weather the storm and stay in the black.
So, you may say, “Big deal, the system is still good for lower income people.” That’s right, it actually rewards lower-income earners and punishes higher-income earners. So I am, with my $6.38 per hour job, for the short-term at least, helped by the system. But I don’t agree with it.
I don’t agree with it because I have this crazy notion that if there is going to be an income tax, and I’m skeptical of that, it should at least be the same rate for everyone — none of this earned income tax credit or “progressive” system.
You might say then, “Well, that’s not fair to the poor people.” But, you would be wrong.
That’s fair to everyone — although some would argue that it’s still unfair to wealthier people because they pay a higher dollar amount for receiving basically the same services from the government.
That’s another problem. Why is it that we only expect different prices for services when it comes to the services government provides? We’d surely complain if one person was charged a higher price than someone else for the same exact service for a car repair, but most of us don’t say a word when the same thing happens to people when they pay for government services through taxes.
This income redistribution is all justified by appealing to people’s sense of “sharing the burden.” I also compare it to a government, which would, if it were possible, alleviate the suffering of overweight citizens by taking excess fat and giving it to slimmer citizens. I know it’s an unlikely occurrence, but it’s the same concept: forcibly trying to create equality.
Adam Fowler is a junior majoring in political science. firstname.lastname@example.org