SMI Visitor's Blog       

Welcome to the SMI Visitor's Blog where you'll find selected excerpts from our Member's Blog, plus occasional posts created especially for our visitors.

For SMI Web Members, click here to go to the SMI Member Blog.

« Blog Home

Workers of America, celebrate!

Today is a big day. After laboring for the first 98 days of 2010 at the behest of our governments, today we escape the bonds of servitude. This is Tax Freedom Day:

That means Ameri­cans [have worked] well over three months of the year, from January 1 to April 9, before they [had] earned enough money to pay this year's tax obli­gations at the federal, state and local levels...

Tax Freedom Day does not count the deficit even though deficits must eventually be financed. Since 1948, when Tax Freedom Day was first calculated, the difference between what governments are spending and what they're collecting has never been as great as during 2009 and 2010. If Americans were required to pay for all government spending this year, they would be working until May 17 before they had earned enough to pay their taxes.

Almost one-half of American households have a different tax-related reason to celebrate: the April 15 tax-filing deadline is just not that big a deal. Why? Because they pay no federal taxes at all. In fact, about 40% of all U.S. households actually receive a check rather than needing to write one, courtesy of the taxpayers who are celebrating Tax Freedom Day.

Key paragraphs from an Associated Press article in USA Today:

[April 15] is a dreaded deadline for millions of Americans, but for nearly half of U.S. households, it's simply somebody else's problem.

About 47% will pay no federal income taxes for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability....

The result is a tax system that exempts almost half the U.S. from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10% of earners — households making an average of $366,400 in 2006 — paid about 73% of the income taxes collected by the federal government.

The bottom 40%, on average, make a profit from the federal income tax system, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

While we're talking taxes, there is one more thing worth mentioning. Our current tax structure apparently is incapable of keeping up with Washington's spending, so we're again hearing talk of the need for a value-added tax (VAT). It's complicated in design, but relatively simple to explain — think of it as a hidden national sales tax.

In fact, you may want to pause a bit from your celebrating to learn some of the things you need to know about this type of tax.

Powered by Movable Type  |   Subscribe  |   Email Updates