The working poor don't pay taxes? Really?!

United States
August 7, 2012 6:38am CST
One issue ion the ongoing tax code debate is taht the poor do not pay taxes... in fact in our income tax system, they get rebates. Is that fair to the rich? Well, if we are only considering income tax, you have a point, but the working poor pay a whole lot more in other taxes... 1. The poor tend to spend a higher percentage of their income (higher 'propencity to consume') on things like food, utilities, etc. With that they pay sales tax, all of those charges for utilites and phone service. 2. Poor folks tend to have a higher rate of smokers and for that they pay ever higher 'sin' taxes. 3. Payroll taxes including FICA and FUTA take another chunk out that is not returned in income tax. 4. As most are renters, they tend to pay for when the landlord's expenses rise, another 'hidden tax'. There are a lot more examples, but are you serious in saying the working poor do not pay a large amount of taxes?
3 people like this
8 responses
@lawdude (237)
• United States
8 Aug 12
There is no question that the poor and middle class pay a much higher percentage of disposable income in taxes than wealthy taxpayers. That is why Congress has added the earned income tax credit and alternative minimum tax to the IRS Code to benefit lower and middle class income earners. The whole income tax code is a farce. No matter how it is structured, there will always be complaints that it is inequitable. While the top marginal rate for wealthy taxpayers is 38%, no multi-millionaire or billionaire pays that much. For instance, Romney earned 21.6 million in 2010 and paid an effective federal income tax rate of 13.9%. That is not to belittle Rommey or his POTUS qualifications. He does what all wealthy taxpayers do to legally shelter their income from taxation. But it underscores the fact that our income tax code is a mess and has been skerewed by all sorts of special interests. There are philosophical arguments from both the left and right about the income tax. The left argues that income tax rates should be progressive and based on the ability to pay. The right argues that progressive taxation hinders investment that would ordinarily be invested in the private sector and encourages higher public spending and debt. There's some truth to both arguments. It's a given that the tax code should be revamped. But given the power of big money and lobbyists, it doesn't seem we can ever fashion a simpler tax code that can reduce rates and at the same time close unproductive loopholes that benefit a very small percentage of people.
1 person likes this
• United States
8 Aug 12
DUDE! Thank you for getting it - its the percentage of income. I just want to blow a hole in the argumenta that it is somehow unfair that the poor pay nothing and taht this is unfair. Thanks, Dude.
@RobtheRock (2433)
• United States
9 Aug 12
I feel I have to add something here. If you live in a conservative state like Ohio, then you also pay state tax and don't expect anything back, if you are poor! Last year, I was supposed to get $3.00 back. The state says they don't refund $1.00 or less. They lied. I live in a city that takes city tax and I don't get a dime of city tax. Matter of fact, I might owe city tax with penalty! If there is a store in the hood, that store charges more for items than a store like Kroger which charges more than WalMart and Meijers all of whom (like you said) we pay sales tax for non food items. I'm glad you brought this Big LIE to light.
• United States
10 Aug 12
Thanks Rob, for your life experience. The lie only seperates us... keeps us from seeing the world through another's eyes.
@suspenseful (40193)
• Canada
7 Aug 12
I think they are talking about income taxes. Now if the poor do smoke, and rent, then they would pay indirect taxes and also if they drive a car, they would pay the tax on buying the car. But these are not counted since they are considered consumption taxes even for some cases they are unavoidable..
@rodney850 (2145)
• United States
8 Aug 12
There is a lot to be said about the poor and lower middle class when discussing taxes. In the most recent years we have seen many more lower middle class have dropped off into the poor either by choice or not. The bad part is that when you are right on that line the benefits of the poor are not available and that in itself can be a factor for some people to give up and start taking advantage of the system in place. One idea that has been around for a while now congress will not even consider even though it is the most fair and profitable way to collect taxes, and that is the Fair Tax. If you have never been introduced to this tax alternative I am posting a link to the web site. The reason congress will not even consider this tax method is because it takes all of their power away and eliminates 90 % of the Gestapo er IRS. http://www.fairtax.org/site/PageServer
• United States
7 Aug 12
You might find this interesting: http://www.goodcitizen.org/wwla%20book/Chapters/1-Issues/Economic%20Issues%20-%20List%20of%20Taxes%20email.htm
• United States
7 Aug 12
Thanks.
@Fatcat44 (1141)
• United States
8 Aug 12
But they do not pay income taxes, which is the federal tax system, which people are talking about.
@roberten (3128)
• United States
7 Aug 12
Everyone pays taxes but not in an equitable manner. It is said that one has to have money in order to make money, the same can be said for avoiding taxes. It is reality easy to reduce your taxes with carefully spent funds. A personal example: I paid for my daughter's college courses up front in cash last year and took education deduction I was entitled too; my return was close to the amount I paid out. I did had some legitimate other deductions too but ended up breaking even over school. Imagine the power that has over taxes if spent in just the right way. Those below well below the poverty level may not be able to allow money to work its magic because if they do not have it available. I am by no stretch of the imagination well off but I do understand the fear of those who are when it comes to reducing tax cuts for the wealthy. Maybe we could compromise and let them maintain some of their cuts and give the unwealthy a lot more (not to be available to the wealthy). A little give an take I could live with. No one income level should suffer the full burden of tax reform.
@scheng1 (24650)
• Singapore
7 Aug 12
Hi Valentinesdiner, you forget that the majority of the population, including the poor and the lower middle class, are working so hard to make the rich people even richer. Without the effort of the poor who work very long hours, the rich will not be so rich. Even the politicians will not get paid!