With so many serious dangers to our democracy – Obama’s far left socialists, a possible leftist coup, an EMP attack, global islamofascism, it seems a stretch to include our tax system also as a danger. It is. Consider that 47% of “taxpayers,” 71,000,000 people will pay no income tax in 2009. Zero.
Worse. Many of these people are eligible for a “negative income tax.” That is, the federal government will give them one refundable tax break, rebate, or another. On this, see the Tax Policy Center:
Refundable credits such as the Earned Income Tax Credit (EITC), the refundable child tax credit (CTC), and the new Making Work Pay (MWP) credit will lead to negative average effective rates for the bottom two quintiles. The bottom quintile, for example, will receive an average income tax subsidy from the federal government equal to 10 percent of their pretax income. Rates will increase from 2.3 to 13.4 percent for the top three quintiles and to 17.9 percent for the top 1 percent of income earners.
These “free riders” have no reason to alter the tax system as long as their circumstance is unchanged. Since Democrats, the tax and spend party, are quite content with this system (even a higher negative tax), these free riders are their natural constituents. Thus, Democrats have a built in advantage at the polls.
With nearly half of the population paying no taxes, even if Republicans control Congress and the White House, the probability of correcting this incredibly unfair system is slim. Fear of a backlash from the 71,000,000 is highly persuasive.
So, what can be done? Nothing, except to vote at the polls for those who promise to reform the tax system, and through blogs, the conservative media, town halls, and demonstrations, ensure their seriousness.