Sanity Injection

Injecting a dose of sanity into your day’s news and current events.

Creating a permanent majority for higher taxes?

Posted by sanityinjection on March 9, 2009

So much to write about today, but let me begin with this. I was listening to a radio talk show on Friday and heard something that really struck me. The host said that currently, 38% of Americans do not pay federal income tax, because their income falls below the No Tax Status level, or their deductions and credits reduce their tax liability to zero. However, he said that the tax changes being put forward by the Obama Administration will raise that percentage to 50%. This means that when any new federal spending program or tax increase is suggested, there will be at least 50% of Americans who can support it because they will not have to pay a dime in taxes to fund it. Combined with those who believe in big government philosophically, this will create a more or less permanent majority in favor of increased government spending and higher taxes.

I have not double-checked these figures for accuracy, so if anyone wants to do that feel free. But assuming they are correct, am I the only one who sees this as a big problem? Shrinking the tax base places a greater burden on that base, and while upper-income earners may be able to afford the tax increases, eventually they will have an incentive to cut back their economic production in order to avoid the taxation. For further reading on what happens when the economy’s most productive citizens get sick of supporting its least productive, check out Atlas Shrugged by Ayn Rand.

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