I believe that everyone with income should pay federal income tax. This is a pretty unpopular opinion in liberal circles, and a wildly popular opinion in conservative ones, so I will explain, so as to make both camps unhappy with me.
(Ah, well.)
According to the Tax Policy Center, there are 151 million tax units (singles, couples, families) in the U.S., of which around 48% do not pay individual income tax. About 60% of those people make under $20,000 a year, which is below the poverty level (and also awful and sad). By my calculations — and I am no mathematician — this means there are around 44 million tax units not paying federal income taxes, the majority of whom cannot really afford to.
And here’s where you take away my liberal card.
I call bullshit: fixed income or not, poverty or not, I think every household can save a few cents a month and pay some federal taxes. If every tax unit saved $0.83 per month, which is to say that they paid $10 per year in income tax, that would add at least $440 million to the federal budget (hopefully more; the 40% making above poverty level might be able to contribute $1 per month, say). Sure, when the U.S. budget is projected to be $3.729 trillion in 2012, this is the tiniest fraction (.001 percent, right? again, not a math person) of the budget. But this amount of income does two things:
First of all, it gives everyone ownership of what happens in America. It means if you have income, your tax dollars — or cents, as it may be — aren’t just going to entitlement programs like SS and Medicare; it means they’re going to defense, environmental protection, emergency funding, world aid, etc. So if you didn’t pay taxes before and felt like you had no say in where your dollars were spent because your dollars weren’t spent, now you have no excuse. No longer do you have to feel inadequate when your GOP representative denigrates your income class to the country; now you can stand up and say, “Hey, shut up. I pay taxes too, though I can little afford it. This is my country and I’m giving and taking like everyone else.” Maybe it would even compel some people, who may have felt unworthy of voting before, to get out and vote.
Second, and most important, it would make the right-wingers STFU about how 50 percent of Americans pay no taxes. Hell, even crazy right-wing tea-nut Michele Bachmann has said that a dollar would be good enough for her, so let’s add an order of magnitude and take away a huge Republican talking point.
Best of all, once everyone who produces income is paying taxes, the GOP’s message that it’s okay to increase taxes on the poor but not the rich is severely undermined.
Caveat: Here’s what I don’t know: I don’t know how much it costs the Internal Revenue Service to review each tax statement. Maybe there’s a negative ROI on paying such low taxes, though the liberal in me would love to see the rhetorical knots Republicans twist themselves into explaining why it’s bad for poor people to pay taxes. I also don’t know exactly how to address income vs. capital gains, as well as people receiving Social Security. So this argument is incomplete with parts that I’m not prepared to deal with. (Work in progress, people. Work in progress.)
Yet while I hate to see the working class get nickel-and-dimed more (literally, in my projection), provided that the cost of processing these returns doesn’t make it negative, I think it’s well worth the cost of ownership of the country.
Suck it, Red.