dave@utcsrgv.UUCP (Dave Sherman) (04/02/84)
~| From pur-ee!iuvax!scsg (Tim Sevener)
~| Enormous sums also go for "tax expenditures". These are the tax
~| deductions which allow the wealthy to avoid paying taxes--under Reagan
~| these have increased enormously and mean that the middle-income taxpayer
~| is forced to pay the taxes the wealthy should have paid but didn't.
~| A symptom of the incredible unfairness of the Reagan tax changes is
~| this fact reported in US News and World Report:
~| the number of millionaires paying NO TAXES increased from 5 to
~| 117 last tax year after Reagan's tax changes.
~| Under Reagan what is happening is the transfer of income, not from
~| the middle-class to the poor but from the middle-class to the rich.
~| US News and World Report also reported in the same issue that the
~| number of Americans making between 15-35,000 dollars has gone down
~| by 15% in the last few years. Two different studies of the distribution
~| of income both showed that income has been shifted from the middle
~| and lower classes to the rich by several percentage points in the last few
~| years. The best way to reduce our taxes is to make the rich pay theirs!!
<<FLAME ON!>>
First of all, the fact is that notwithstanding the 117 who pay no tax,
those with high incomes, in total, already pay a huge share of the taxes:
===> The top 0.6% of individuals pay 18% of U.S. federal personal tax
===> The top 6.0% of individuals pay 30% of U.S. federal personal tax
===> The bottom 40% pay 17% of U.S. federal personal tax
(Source: Ray Sommerfeld, University of Texas, at Workshop on Teaching
Tax Skills, Canadian Institute of Chartered Accountants, Toronto, August 1983.
I believe these figures also appear in Sommerfeld, Anderson & Brock,
"An Introduction to Taxation" and/or Sommerfeld, "Federal Taxes and
Management Decisions", both tax textbooks for accounting students.
I believe the figures are for 1981 but I'm not sure.)
The tax system is already HEAVILY skewed in favour of low income taxpayers,
due to the existence of basic deductions and due to the progressive nature
of the tax brackets and marginal rates.
(For example, a Canadian taxpayer with a dependent spouse, no children,
and $15,000 of income (of which $1,000 comes from investments) will pay
6.8% of that income, or $1,018, in combined federal and Ontario tax for 1983.)
Now, what about these tax expenditures? Those 117 millionaires didn't
get tax reductions for being nice people. They got tax reductions for
channelling their money into investments which the government wanted to
support.
Both the Canadian and the American governments use tax incentives as
a means of channelling investment within the free-market economy.
Those who take advantage of the incentives provided should not be
criticized for it; they are investing their resources in a direction
which is desired by the government, and thus supporting the economy.
And yes, the people who have the spare cash to put into these investments
tend to be "rich"; so what? They are taking risks with their money,
in exchange for a tax deduction which can rarely be worth more than
half the money at risk.
I am paying no taxes for 1982 or 1983. If you want to criticize me as
some kind of a rip-off artist or freeloader, go ahead. I like to think
that by making a substantial investment in a startup company which is
engaged in scientific research and development, I am following the wishes
of my government and doing something for the industry as well as myself.
>>FFO EMALF<<
Dave Sherman
Toronto
--
{allegra,cornell,decvax,ihnp4,linus,utzoo}!utcsrgv!dave