Following up on my rant last Thursday, I would be remiss if I "carried on" about the unfair taxation of estates, income, corporations etc, and failed to offer an alternative. While there is a need for funding of essential government services, and certainly intelligent people can debate what constitutes "essential", I would contend the current system of taxation, corporate and individual income taxes, is a grossly unfair burden on the population, especially the lower income brackets.
While you may think there are certain folk in our society who pay no taxes, not only technically but in reality you would be wrong. Any time a product is made it is taxed through the corporate taxes on the company producing it. You may say, "but the company is paying those taxes, not an individual" and you would be right, except...every business passes onto it's customers the costs of producing it's goods and services. That is simply how business stays in business. It costs so much to produce a product or service, and that cost, along with a reasonable margin of profit, is passed on to the consumer.
Bringing a product to market may involve several different businesses, and each will pass on it's costs, including taxes, to the next business in the chain, until the final product, and the final costs, are passed onto the consumer.
Thus it is that consumer, buying that "widget" who will ultimately pay the taxes on the businesses producing the goods he or she buys. Therefore, no business or corporation pays taxes in the US, only individuals.
The problem here is that the business is essentially tasked with the collection of income taxes under the table for government. Government doesn't want the citizen to know they are paying all the money that is being spent (or squandered) on government services and programs. It has been calculated that the taxes accumulated on the products and services as they are produced amount to about 23% of the cost paid at the register. Consider that of every dollar spent you are paying 23 cents in taxes. For every $1000 spent, you are paying $230 in taxes. This over and above the income and withholding taxes you pay.
A family of 4 earning $15, 000, though they receive back all the monies paid in withheld income tax, plus a welfare payment through the so called "Earned Income Credit", they still will pay about $3000 in taxes through purchases made through the year. Double their income and not only are they no longer eligible for "Earned Income Credit", they will now pay income taxes and...since they are able to purchase more, they will pay more taxes through the retail goods and services taxation system. That could be $5500 or more on top of income withholding taxes. So what do we do about this unfair, multilayer taxation? While I'm no expert, I've learned of an effort to make the tax system in the US much fairer to all. Check back tomorrow.