Who Doesn't pay Taxes

                I keep hearing that slightly more than half of the population doesn’t pay taxes.  This is mainly an argument made by republicans that the problem doesn’t lay with revenues (i.e. taxes) as in that we need to raise percentages, but that we should “lower rates and broaden the base”.  This argument sounds good, but let’s looks at who these people are and why they don’t pay taxes. 

                The majority of people who don’t pay taxes are simply, most of the time, the people who can’t afford to.  These are mostly people who make less than $20k/year.  For a family of four these are people below the poverty line.  Does this make the argument sound better?  It certainly does not.  As a moral nation how can we say that we are going to increase taxes on the bottom rung to get us out of a situation that our politicians put us in? 

                What about the top 1%?  A large number of them don’t pay taxes as well.  If you “broadened the base” and taxed those who can’t afford it, you would get less revenue (as a percentage of income) than you would if you raised taxes on the rich.  I think that a plan like this would only create social “unrest”.  Marginally I think it is a wash because there are more poor than rich and the numbers would probably even out.

                So what can rationally be done?   Most of the rich that do not pay taxes avoid them by taking advantage of certain tax loopholes that they hire people to find for them.  Just one of these loopholes is investing in municipal bonds as they are currently non-taxable under the current code.  That is just one of the many loopholes used to avoid taxes.  If you want to increase revenue and avoid the immoral, the best way to do that is to get rid of these loopholes. 

                The other side is that we have a spending problem.  I agree, we do have a spending problem but I disagree as to where the spending problem is.  It’s true that the largest part of government spending is on entitlements.  However, a very close second is “defense” spending.  The issue is, we have the pinnacle of weapon technology in the world.  Bottom line, if a gun works, why do you need a new one?  Your welcome to check my sources for this info at: http://economix.blogs.nytimes.com/2011/06/28/who-doesnt-pay-federal-income-taxes-legally/

http://en.wikipedia.org/wiki/Poverty_threshold#National_poverty_lines