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Jeff Bezos is in the news today for suggesting that people earning less than $75,000 per year pay no federal income tax. I'm not sure why this is newsworthy. It's nearly that way today. IRS data from 2023 (the most recent year available) indicate that, as a group, those whose adjusted gross income is less than $75,000 paid an average tax rate of 4.65% on their adjusted gross income:
That group, as a whole, pays 7.27% of the federal income taxes collected. Since this is from 2023 - before the limits and deductions in the Big Beautiful Bill - it's certain that these numbers are even smaller today.
Would it be a good thing if a group of citizens made no financial contribution to running the government? Shouldn't everyone have some "skin in the game," even if it's only a little? That "less than $75,000" group comprises over 100,000,000 tax returns. That's almost 2/3 of the total returns filed. (For those doing the math, that means that about 1/3 of the tax returns account for over 92% of the federal income taxes paid.) Basic economics says that if government is cheap - or worse, FREE - consumers will demand more of it. Is that how the federal government became the behemoth that it is? A large group of people who pay little demand much? Is it that simple?
How much, if anything, is too little? Or too much? What is fair? Does "fair" even enter into the discussion? Does equality under the law demand a flat tax?
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Yes. It is that simple.
It's also worse than that. When we tell people that they are entitled to something, they get angry when they don't get it. So they're always pissed off...
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OK. Follow up question ...
Does that imply that we got doubly snookered by the idea of "progressive" taxes? Did the leftists proposing the idea already understand where it would lead? That the basic economics would inexorably lead to a massive, intrusive, aggressive government? Did they understand the behavior of free markets better than the capitalists they were trying to subvert?
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It's like an all-you-can-eat buffet. If it doesn't cost me any more, why wouldn't I have three desserts?
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Probably so - their ultimate goal is no free market and a mostly slave economy.
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We already have too many politicians "promising" to give "the masses" (voters) some benefit, but telling them they won't have to pay for it - the politician will make that rich guy over there pay for it.
One of the oft-overlooked aspects of the frequently cited generous welfare systems of the Scandinavian countries is that their income tax systems are NOT very progressive. Citizens pay pretty stiff tax rates beginning at quite modest incomes.
Medical insurance companies learned decades ago when they introduced "HMO" style insurance programs that without patient copays (even if very modest amounts), patients overused the medical system, interfering with the medical system's ability to treat properly the patients who most needed professional medical help.
Voters need to have "skin in the game" when voting for more government services (and spending).
I am surprised Mr. Bezos, with all his history of anticipating public wants, seems not to have thought past just the immediate "first order" effect.
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