Paying Your "Fair Share" in Taxes
This term keeps getting kicked around by different groups, yet no one can decide what anyones "Fair Share" really is.
The problem seems to be that everyone has their own idea of what is "Fair".
An excellent source for looking at definitions of "Fair" is the Minnesota Taxation Debates.
"Fairness when it comes to tax policy gets argued in terms of progressive taxes (a greater percentage of taxes from those who make more money) or regressive (a lower percentage of tax money as earnings increase).
The Minnesota Department of Revenue said in its "Tax Incidence Study" that "as a whole, the state and local systemn of taxation in Minnesota remains regressive."
Gov. Mark Dayton defended his plan for tax increases on Minnesota's top earners, by saying the wealthiest need to pay their fair share.
Later on in the report, the Revenue Department explains that the state's income tax is progressive, while the three remaining taxes (property taxes, sales taxes and other taxes-fees) are regressive.
Thus begins the political divide on fairness.
If Dayton truly wanted to be fair, he'd focus on the income tax and make it a flat tax, argues says the fiscally conservative Taxpayers League of Minnesota.
An editorial by the University of Minnesota's - Minnesota Daily, argues that it isn't fair to look at property taxes because it's a tax on the worth of a house, therefore, if a person with little means buys a house with high property taxes, that's their choice."
What's fair? What's not?
Certainly those that have riches thrust upon them have little claim to any benefit of taxation. For the course of this conversation that is a given.
Let's take a look at a couple of examples:
First - The "Thrifty Saver"
There is a class of people within the US that have saved their money to provide for themselves in their old age. Most of these are children of parents raised in the Depression Era. Many of these people were taught to save and scrimp and put money away for their old age OR in case of another economic collapse.
5%- 10% of the minimum wage income over the past 4 decades placed into any modest compound interest savings account over the course of a 40 year worklife would give these people savings of well over $1 million dollars in savings.
Now the income was taxed when it was earned and the interest is taxed upon withdrawl.
In that era they were also heavily investing in US Savings Bonds. Upon their maturity they payed great dividends.
Many of these people are called "rich" and are classified as part of the 1%.
Should these people be taxed at a greater level than anyone else?
If so, is that not a punishment for saving your money to provide for yourself in the future?
Doesn't that seem to be a punishment for doing without in the long term so you can be financially stable in your golden years?
With respect to the Savings Bonds, couldn't the additional taxation be viewed as a punishment for supporting your country as requested by your government?
Second - The "Immortal"
There is a class of citizens withint the US that never save a penny for whatever reason. They seem to have plenty for necessities and some luxuries but never put aside any money for the future.
They live in the here and now.
Since they have no savings, they are not considered "rich" but they enjoy all of the fun lifestyle and none of the responsibility. Many rent or lease so they have no real estate upon which to assess property taxes.
Should these people be taxed at a lower level than anyone else?
Wouldn't that be considered a reward for being a spendthrift?