In most years, individual U.S. federal income tax returns are due today. However, because today is Sunday and tomorrow is a holiday in Washington, D.C., taxes and returns are not due until the 17th.
However, since axes have featured prominently in some Ethical Musings’ posts (e.g., Ethical Musings: Thinking about the income tax 2011, Ethical Musings: Thinking about the income tax 2010, and Ethical Musings: Fair taxation), a post today on taxes seemed especially appropriate.
This chart, from the Wall Street Journal (Andrea Coobes, “Taxes – Who really is paying up,” April 15, 2012), graphically depicts the unfairness of the U.S. tax system:
The tax burden, as I have previously contended, should increase with income such that the higher one’s income, the larger share of the tax burden paid. Instead, that principle only holds true for the bottom 80% of taxpayers. The wealthiest 20% pay disproportionately little in taxes, sometimes close to what the middle 20% pay.
Making the tax system fair is relatively easy: treat all income the same; eliminate all deductions; establish a progressive tax rate structure. This won’t happen. Too many individuals and groups want to use the tax system for multiple purposes, not just funding the government; too many individuals and groups/businesses want to privilege themselves at somebody else’s expense.
However, fairness demands improvement. The top 20% (and that includes me) should pay more in taxes.