The U.S. Tax Hypocrisy
The GOP has been very vocal in recent years about establishing fairness in taxation. In an effort to protect the wealthy from what some conservatives have dubbed “socialism,” Republicans have argued that the only fair system is to tax every American at the same rate, regardless of their income. They claim this belief was adopted to prevent the rich from paying more than their share in taxes than the middle and lower classes. Yet unfathomably, plenty of America’s wealthiest citizens actually pay a much lower percentage of their income for Federal taxes than the rest of the nation.
President Barack Obama has stated that around 25 percent of all millionaires pay lower tax rates than many middle-class households, and some billionaires actually pay a tax rate as low as 1 percent. This means that, in addition to the deductions and earmarks the super wealthy use to reduce their taxes, they are already encountering a much lower rate to begin with. Meanwhile, the burden to increase the nation’s revenue falls squarely on the shoulders of the middle class, whose 2010 tax breaks were rejected by the Senate for renewal.
According to a study from the Congressional Research Service, roughly one out of four people who earned over 1 million dollars in 2006 paid a smaller portion of their income in federal taxes than 10% of those with AGIs below $100,000. This is a colossal gap in income, and for the richer party to somehow be paying out less than anyone in the lower bracket is shameful. On top of this, the Tax Policy Center estimates that 4,000 households with incomes over a million dollars owed absolutely nothing in Federal income tax last year.
How is this possible? Because many of America’s richest citizens make their fortunes via investments – which are taxed at a much lower rate than normal income is. Middle class Americans do not have this luxury, much in the same way that they do not have a second or third mortgage rate to deduct from their taxes in April. Conservatives have argued that these breaks are readily available to everyone, but it is blatantly evident that the system favors those who already have money over those who are struggling.
Members of both parties agree that salvaging the deteriorating middle class is essential to economic reform. In order for this to happen, legislators need to abolish tax policies that give discounts to those who can most easily pay them. Loopholes for the wealthy prevent breaks for the middle class during a period when they need them the most. If the GOP is truly in favor of an equal tax system for all incomes, they ought to show some consistency – even if t doesn’t always directly benefit the wealthy.