No Skin in the Tax Game

by Les@SpillingBuckets on April 16, 2010

This article on CNN.com caught my eye the other day. It started with a quote by Oliver Wendell Holmes, and which happens to also appear engraved on the top of the I.R.S. building:

Taxes are the price we pay for a civilized society.

Yet 47% of people in America either don’t make enough money to pay taxes, or get so much back in rebates that they end up actually receiving money.

Now skin can obviously be defined in different ways. There are taxes that are hard to avoid in addition to federal income taxes. How about payroll taxes like Social Security and Medicare, taxes we are supposed to directly relate to “stuff”. Who can forget about sales tax? Yet the point remains, more and more people are becoming disconnected from the costs and connected to the benefits.

Scott Hodge goes on to list a host of rebates you could qualify for. He says it better than I ever could:

Over the past 15 years, politicians have been working overtime to create a blizzard of tax credits targeted to “help” the so-called “middle class.”
They’ve created the child credit, which is different from the child care tax credit, unless you have a grown child and then you can use the education credit. And if you don’t have a child, then you can get one using the adoption credit. If you don’t care for a child, there’s the credit for caring for granny instead.
But if you’d rather care for air than people, there’s a credit for buying a hybrid vehicle, unless you’d rather put a solar panel on your roof, or simply replace all the windows in your house. Oh, don’t have a house? Then there is the first-time homebuyer’s credit.

There are arguments for this “redistribution of wealth” and for “helping the middle class”, just as there are arguments against it. But regardless of which side of the argument you fall into there is still one key fact:

The real issue is that millions of Americans no longer have any skin in the game and are becoming inoculated from the basic cost of government. To them, government seems free and politicians can easily convince them to support more and more spending because someone else is going to pay the tab. This trend deserves a broader national discussion than either party in Washington seems willing to engage in.

What are your thoughts? I see this as a growing problem.

Does it further divide us into classes? More so than we already are? is that a bad thing?

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