How Many Should Pay Income Taxes?

Should more people pay income taxes? It is widely agreed that the top 1 percent of Americans can, and should, pay more. This is not surprising. It’s a pretty good bet that you’ll get a majority vote from the 99 percent to increase taxes on the 1 percent.

So the top 1 percent will be paying more taxes this year. So will millions of others, including every working stiff. But let’s take the question a bit further. Let’s view it in the context of civic duty rather than envy.

At what level of income should we feel a need to contribute, however modestly, to the support of our government? It’s easy to look at the top dogs and say, “Gee, those folks have it made. Let’s have them pay more taxes.” It’s not so easy to look down the income scale and ask where paying taxes should start.

It’s also political suicide to speak dismissively of those who don’t pay income taxes. Presidential candidate Mitt Romney learned that painful lesson when he noted, in a private talk, that 47 percent of the voting public received tax dollars rather than paid them. That’s a lot of people. His comments, however, were greeted with howls of indignation. The media awarded him lifetime membership in the National Association of Grinches.

But maybe we should think on this a bit. Let’s juxtapose that 47 percent figure to the ownership of various consumer goodies.

  • More than 90 percent of all households have a microwave oven.
  • 88 percent of households have a television set in their living or family room
  • 87 percent of households subscribe to cable or satellite TV
  • 77 percent of households own a personal computer
  • 72 percent of households have a flat panel TV set.
  • 68 percent of households have broadband Internet service.
  • 68 percent of households have a television set in their bedroom.

Does this mean it is nearly twice as important to own a microwave oven as it is to make a contribution to support, say, the Department of Justice? I’m serious about this. Pick a department of government. Surely they can’t all be entirely worthless. Isn’t it possible that our interstate highway system adds at least the same amount of convenience and timesaving to our lives as possession of a microwave oven?

Is cable or satellite TV more worthy of support than government? After all, 87 percent of households support cable or satellite TV, but only 53 percent of households pay federal income taxes. Surely our government doesn’t suffer from as much waste, fraud and abuse as what’s offered on television.

It has been argued that not paying federal income tax should not be confused with not paying taxes. Everyone who works pays the employment tax. The difference is that we pay the employment tax in the expectation of a direct future benefit— Social Security retirement benefits and Medicare insurance. We get pretty upset when our friends in Washington talk about reducing the benefits. So the employment tax, like it or not, is a separate deal. It has a quo for the quid.

The federal income tax supports the daily operation of the rest of government, yet 47 percent of all households won’t contribute a dime to the $3.1 trillion to be spent this year. That leaves the other 53 percent to carry the whole thing.

Other data suggests that those who are officially defined as poor (having an income below the official poverty line) have been making some material progress even if they aren’t living as well as the rest of us. In a Census Bureau report, “Living Conditions in the United States, 2005”, it was reported that only 36.7 percent of poor households owned a dishwasher in 2005 compared to 64 percent of all households. But ownership among the poor was still double the 18.8 percent dishwasher ownership of all households in 1971.

In other areas the poor were on par with the entire population. While 98.9 percent of all households owned a color TV in 2005, 97.4 percent of the poor owned one.

Don’t get me wrong. Being poor is no bowl of cherries. Those who have compared will tell you, “rich is better.”

So here’s what I’d like to hear from you about. First, should more people pay federal income taxes? If so, how would you change the tax code to make that happen? Write me at scott@scottburns.com. Put “More Taxpayers” in the subject line.

On the web:

“Exploring the Digital Nation—Computer and Internet Use at Home, November 8, 2011

http://www.esa.doc.gov/Reports/exploring-digital-nation-computer-and-internet-use-home

Mark J. Perry, “The U.S. Rich Are Getting Richer and the Poor Are Getting… Richer,” Britannica Blog, December 1, 2009

http://www.britannica.com/blogs/2009/12/the-rich-are-getting-richer-and-the-poor-are-getting-richer/ 13

Census Bureau: Living Conditions in the United States, 2005.

http://www.census.gov/hhes/well-being/publications/extended-05.html

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(c) A. M. Universal, 2013