Wednesday, October 22, 2008

Tax cuts = higher taxes

When you give tax cuts to people who pay no taxes, you get closer and closer to complete welfare state. I like this easy outline with some interesting graphs too. If Obama's plans are implemented, within 5 years more than 50% of the population would pay no taxes. Once you have 50% paying $0 in taxes, you have a majority who will always vote for more spending and higher taxes on the minority. And once that happens, the end will truly be here for capitalism in the US.


Zach said...

I agree completely with your point. That being said, don't overlook the fact that those statistics reflect only individual income tax liability. Many of those with zero income tax liability will still be net taxpayers after considering payroll taxes. Your overall point is still valid, I'm only making a point of clarification.

Ed said...


Yes people pay payroll taxes and often times their payroll tax is higher than income tax, even if income tax is above 0. But the argument for many years has been that those aren't really "taxes" and so shouldn't count. Social Security is a pension plan where you get out as much as you put in, goes the artgument. If you believe the proponents of SS it's an investment not a tax.

Lumping in payroll taxes with regular taxes in a discussion about tax policy is dangerous. The next step after that is disbanding SS altoegther, but keeping the 12.4% tax in place with the following step being the elimination of benefits for the "rich" and making social security yet one more welfare program.