I had been wondering about the way that "credits" and income-limited deductions had been reducing the tax burden on lower-income individuals and families in recent years. It always felt like a strong "hockey stick" model in which taxes paid stayed relatively low until you reached a certain income and your taxes (as a percentage of income) suddenly exploded up. I'm not just talking about the progressive tax rates themselves -- I'm also talking about the various credits and deductions that get eliminated at different income levels.
Mark Perry has a great blog, and he recently posted the following charts from the Tax Foundation showing the percentage of filers who pay no federal taxes (now at 36%) and the income level at which you pay no taxes.
The statistic that bothers me the most is the rapid growth of non-paying filers to 51 million, or 36% of all filers. Add to that huge number the millions of non-filers and you've got an enormous block of people who (rightly? naively?) believe they can vote themselves any benefit or entitlement and will not pay a dime toward it.
At what point does the process become untenable, with a non-paying majority holding guns to the heads of the paying minority and demanding higher and higher levels of benefits? As the boomers retire, we may find out.
Friday, March 12, 2010
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment