Who Pays? The Truth About the American Tax System

There have been several recent articles discussing the American tax structure, and frankly they are all foreboding. According to a recent Tax Policy Center study, about 67 million Americans paid no federal income taxes last year. Excluding children, that’s about 40% of the entire US population who pay no taxes at all. In other words, only 60% of us support the entire massive federal infrastructure.

So who doesn’t pay? One would rightly expect that the very poor would not pay taxes, but these people account for only about 55% of the people who avoid taxes. The other 45% of tax avoiders take advantage of some nice loophole their particular special-interest lobbyists negotiated on their behalf. Seventeen million people benefit from various tax breaks for the elderly, and 12 million benefit from some breaks like the earned income tax credit, the child tax credit, the college expense tax credits, business deductions, moving expense deductions, mortgage interest deductions, and many others. But here’s the topper – more than 4,000 American families with household annual incomes of over $1,000,000 pay absolutely no taxes, apparently including Mitt Romney, thanks largely to tax-exempt interest and reduced taxes on capital gains.

So, if the very rich pay no taxes, and the very poor pay no taxes, then it’s up to the great middle class to finance the entire government. That’s because the Democrats protect the poor and the Republicans protect the rich, and there’s no one left to protect the middle class. How ironic since it is the middle class that insures the security of all democratic systems. If the middle class is not happy, the entire country is not happy. It’s time for someone to stand up for the middle class, get rid of all the loopholes that favor everyone else, and give the middle class the tax break they’ve never had.