This year, in CA, “Tax Freedom Day”, the hypothetical day on which you’ve earned enough to pay next year’s tax burden, doesn’t happen until April 30 – on average, 30% of our income goes to pay taxes.
Apparently, this comes earlier for folks like Dick Cheney and his Haliburton buddies, who are rich enough to keep their income in offshore accounts and in some cases avoid paying taxes altogether.
I think it’s reasonable that we should all pay some taxes – helps you feel like you’ve got some investment in the society in which you’re living, and not that it owes you services and infrastructure for nothing. But I also, more and more, believe in weighted progressive taxation – but at higher levels, as well as higher incomes, than we have now.
People making $1-$50K could pay, say, 5% – even 5% each to US and State (seems like my money should be better spent closer to home, notwithstanding current mind-boggling idiocy in state government). $50K-$250K (the ones who end up with most of the tax burden currently, around 30%), more like 10%-15%. $250K-$1M – 30%. $1M-$10M – maybe 35%. $10M and up – up to 50%. Personally I’d say anything over $100M should be taxed at some excruciatingly high rate, like 75%. (When The Beatles wrote Taxman, the highest tax rate in the UK was 95% – “…that’s one for you, ninteen for me”. But I’m betting they were making somewhere below $10M/year even at their apex.) No individual needs that much income – if they’re making it, they’re probably stealing it from millions of lower-paid workers and/or customers anyway.
And the auditing efforts of the IRS should be directed proportinally to the high end of the scale.
Here’s an even wilder idea – people in the top 1% of incomes should be required to post their tax returns for public inspection. Let’s find out what they’re really paying. While we’re at it let’s find out what their political contributions were. You make over $100M? You deserve to have to account for it, to the rest of us poor slobs.
On the other hand, there are some ideas that I like the sound of – reducing taxes on dividends sounds reasonable to me, especially for middle and lower incomes (tho I don’t think I’ve ever made more than $100 or so on dividends). What I’d really like to see is adjustment of capital gains so that long-long term gains (stocks you’ve held for years) are adjusted for inflation. Eliminating the AMT because it’s too confusing and more likely to penalize upper-middle than upper. But again, I’d limit the benefits of this based on income level. I imagine that this would call for a restructuring of our entire tax system.
And of course this doesn’t count all the other taxes we have to pay – social security, sales tax, vehicle registration, property taxes, etc.
Maybe this makes me a socialist. Apparently in Euro high-end taxes are more onerous – and high-end salaries are less stratospheric.
Finally, I’d like to see a lot clearer reporting on who taxes are collected from, and how they’re spent. That’s certainly more than we can ever hope for.