10/19/2017

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Who Pay The Most Income Tax?

Many people have deep rooted opinions about who are paying their fair share of taxes and who are not. The truth is, no one likes the idea of having to pay tax in the first place and whether they are rich, poor, or middle class, they tend to want to blame others for their tax burdens.

Taxes are levied on individual incomes, corporate earnings, real estate, gasoline consumption, sales, and just about everything else.

The reasons why taxes are so high does not necessarily have anything to do with any group, no matter what the status. Taxation is relegated by the governing body or bodies that make the rules and tax codes.

This is not to say that the amount of money that the government is spending isn't going more to one group as opposed to the other. But if you look closely at where your tax dollars are being spent, you may be surprised to find that your taxes are being spent closer to your home than you may have previously thought.

  1. The congress and the president makes the rules and regulations that determine who pays what on the federal level. That includes what tax bracket you are in, what deductions you are allowed, and how much income tax you have to pay on the money you earn in any particular year.
  2. Each state has it's own taxing system for taxing personal income. Some states do not levy income tax at all and rely wholly or partially on sales tax or they levy income tax only on dividends and interest income. States may institute codes for the taxing of sales and services, purchases, gasoline taxes, toll roads, and other venues.
  3. Cities, counties, and local municipalities levy taxes on real estate transfers and may impose sales tax and a tax on income.

Question: Are taxes levied fairly?

Answer: The governmental agencies that levy taxes are entrusted to try to regulate taxes as fairly as humanly possible. But no matter how hard they try, someone is not going to be happy.

  • The poor. Many wealthy and middle class people think that the poor use more tax dollars than they pay into the system and should be made to pay more taxes. The question is how? If you take more money from the poor, they get poorer. Then they need more in services that will have to be paid for with tax dollars from the rich and the middle class. But then again, the poor pay taxes just like everybody else.
  • It is said that the wealthy pay very little in taxes because they have the money to hire tax consultants, accoutants, and law firms that know how to manipulate the tax system and save their clients substantially on their taxes. Whether this is true or not, most wealthy people do pay taxes and many do pay their fair share.
  • The middle class is overburdened with taxes and pay more than their fair share. The middle class has historically been looked upon as the shoulder on which tax burdens falls. If you ask the middle class if it is true and if it is fair, they will say that it is true and it is definitely not fair.

There are many people who live in middle class neighborhoods across the country who are poor by any standards and there are many middle class people who live in wealthy neighborhoods. Likewise, there are many people who live in what are considered to be poor neighborhoods who are middle class and many are even wealthy.

In essence, everybody pays taxes no matter where they live or what class they chose to put themselves in, and we all benefit, and/or suffer, from high tax rates.

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