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Home » Finance & Banking » Taxation Information
 

Obligated Tax

 

I like most Americans complain about taxes and how the rich keep getting richer and the poor keep getting poorer. Youve heard the arguments, the poor cant pay taxes because they are poor, the rich dont pay enough, and the middle class is left to pay the brunt. I complain not only as a cynic but also as a hopeful citizen that someday, something will change. I dont wish to be seen as a socialist nor a bigot along class lines. I just want everyone to pay a fair share of the collective burden as our founding fathers intended.

Do you think the rich have paid their fair share? Do you feel that after paying taxes on several hundred thousand dollars the burden should be lessened because youve paid enough or more than the average amount per capita? Do you think it is fair or unfair that one person should pay more than another for the same services received?

According to the 16th Amendment on income taxes, The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

Without apportionment, what does that mean?

Here is a quote from Supreme Court Justice Paterson in Hylton vs U.S. (3 US 171 [1796]): The constitution declares, that a capitation tax is a direct tax; and both in theory and practice, a tax on land is deemed to be a direct tax... The provision was made in favor of the southern states; they possessed a large number of slaves; they had extensive tracts of territory, thinly settled, and not very productive. A majority of the states had but few slaves, and several of them a limited territory, well settled, and in a high state of cultivation. The southern states, if no provision had been introduced in the constitution, would have been wholly at the mercy of the other states. Congress in such case, might tax slaves, at discretion or arbitrarily, and land in every part of the Union, after the same rate or measure: so much a head, in the first instance, and so much an acre, in the second. To guard them against imposition, in these particulars, was the reason of introducing the clause in the constitution.

Without apportionment, means quite clearly that the government has the power to tax people at different rates. In Justice Pattersons explanation, the reason for taxing people at different rates is, some can afford to pay more than others based on their productivity and it is the governments duty to guard those less able to pay, against imposition.

It does not take a genius to understand that sharing the burden equally does not mean we divide up the national debt evenly and each pay one share. Sharing the burden equally means we all carry that portion of the total burden we are capable of carrying (paying).

Unfortunately the current tax structure soaks both the poor and middle classes only to spare the rich. The Who Pays national study finds that poor and middle income families pay a much higher percentage of their income to taxes than do the rich. The wealthiest pay non federal taxes at a rate equaling 7.9% of their income while the middle class and poor pay 9.8% and 12.5% respectively. In the United States, a country with the phrase In God We Trust bannered on its currency, this seems unconscionable. How can those with the least be expected to contribute the most by percentage? What happened to guarding against imposition?

Taxes are our collective duty, a price of continued enjoyment of the privileges of being a U.S. citizen. When I hear that extremely privileged people cant afford to pay the same percentage of income in taxes that the poor and middle class pay, I find myself hoping their investments fail miserably so that they will be able to afford to pay their share of the burden. If we are Americans collectively and we all enjoy the benefits collectively, then we should pay collectively and accordingly to what our means allow us to contribute. This may seem a harsh view, driven along class lines, but even some of Americas wealthiest hold this true to one extent or another.

Warren E. Buffett, George Soros, and Ted Turner, have warned about the concentration of wealth and how it can turn a union based on merit into an aristocracy. Economic growth can be hindered by allowing a nation's capital to sit idly in the hands of inheritors instead of funneling it back thru the ranks to a new generation of innovators and workers. Even Alan Greenspan, the Federal Reserve chairman, warned in Congressional testimony, "For the democratic society, that is not a very desirable thing to allow it to happen", speaking on the concentration of wealth in our country.

F. Scott Fitzgerald said the very rich, "are different from you and me," to which Ernest Hemingway replied, "Yes, they have more money." To this I would add yes and they pay a disproportional smaller percentage of taxes on that money. This means the wealthiest one percent, are enjoying an unfair economic advantage over the rest of us beyond what they have earned.

Before you gather up arms against your local doctors and lawyers thinking they arent paying their share, you should understand Im not talking about them at all. I am talking about nobody you will, in all likelihood, ever see much less meet. What the average American sees as a person of wealth is more likely a true middle class or upper middle class person. In fact the richest or wealthiest person you know is probably in the 50% tax bracket, fully half of all their earnings going to one tax or another. No, it isnt these people I am speaking of at all.

The persons Im talking about are the true upper five percent of Americans, those making over ten million dollars a year. Did you know the wealthiest 5% have collected 59% of the money but only pay 38 % of the taxes? Did you know it gets worse? The wealthiest 1% own 38% of all wealth in this country and pay only 25% of the taxes. Does this seem fair and like a shared burden?

Knowing this, would you now be surprised to learn that the bottom 40% of tax payers (you and me), have an average net wealth of $1100.00 hundred dollars? We on average are worth $1100.00 dollars and are paying on average $1793.00 in taxes. This is 163% of our net worth gone every year and people are still wondering why they cant seem to get ahead in life. Why are we paying so much? Its easier to answer this when you consider the wealthiest are paying 3.5 percent of their wealth in taxes. We pay 163% and they pay 3.5 %. The money has to come from somewhere after all.

What does this mean in plain English and what is the solution? If all taxpayers paid the same 10.5 percent of their wealth in taxes as a median income family pays, the taxes of the lowest 40 percent (you and me) would be cut by 94 percent while the taxes of the wealthiest would triple. Source: Congressional Budget Office and United for a Fair Economy

We the people, need to print this up as a bumper sticker, spread the word and start firing the political puppets of the rich. I for one do not hate the rich, they are Americans also. I just want them to pay the same 10% I feel obligated to.

Author: Jason Webb
 
Author Bio:
Jason Webb is an authority in this industry. Jason has written several articles in the past on this subject.
This article can be searched using: tax law, tax info, income tax information, free tax information, tax refund information
 
 
 

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