Sunday, May 25, 2008

Something


you can see in Minnesota when the weather isn't punishing us...

Thursday, May 01, 2008

How Should Tax Burden be defined?

Depending on whether one is talking with a liberal or a conservative, we are taxed unequally with the liberal arguing the rich don't pay enough and the conservative arguing the rich pay too much and the middle class and poor not enough. Both use a different way of describing the tax burden.

Well, here's my simple definition of tax burden. My tax burden is the tax I pay to any and all levels of government on every dollar that I earn and spend. In other words, the total amount of income taxes, FICA, Medicare, gas tax, property tax, car registration, sales taxes, etc. that I pay as a proportion of my total income. I figure it's about 40 cents of every dollar I make. I'm guessing that people like Warren Buffet pay less, proportionately, since most of the money they make is treated as capital gains and is taxed at 15% vs. the 25% Federal tax bracket I'm in. Anyway it leaves me with two questions.

For conservatives, why should rich folks get a discount on their taxes - i.e. why should I pay more of every dollar I make than Warren Buffet does?

For liberals, just what justification is there for government to cost forty cents of every dollar I make? How does one keep up with the mortgage, pay rapidly increasing fuel costs, etc. when government takes almost half of what I make?

Lastly for both: what's wrong with adopting these parts of the Megan McArdle tax plan shown below?

3) Eliminate the corporate income tax

4) Eliminate the special treatment for capital gains. All income should be taxed at the same level, regardless of its source.