[Congressional Record Volume 158, Number 70 (Wednesday, May 16, 2012)]
[House]
[Pages H2718-H2719]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE MODERN TAX SYSTEM: FAIR TO THE AVERAGE AMERICAN?
The SPEAKER pro tempore. The Chair recognizes the gentleman from
Pennsylvania (Mr. Critz) for 5 minutes.
Mr. CRITZ. Mr. Speaker, in April, the Johnstown-Somerset Central
Labor Council announced the winners of its annual scholarship essay
contest. This year's first-place winner, Lisa Vatavuk, wrote an essay
entitled: ``The Modern Tax System: Fair to the Average American?''
I would like to read Lisa's essay, as it has particular meaning to
our current tax and budget debate:
Dating back to ancient Egypt in the year 3000 BCE, taxes
have been a familiar part of society for almost as long as
civilizations have existed. So how do taxes affect the
current citizens of the United States? Today's tax system
affects all three classes in different ways. Unfortunately,
in the United States, taxation hits the average middle class
family the hardest out of all three demographics.
The United States follows a progressive taxing system. This
means that, ideally, families in the lowest income brackets
pay the lowest percentage of taxes, while families in the
highest income brackets pay the highest percentage. However,
this system of taxation is flawed. Because the Bush
administration cut taxes for the wealthy, families in the top
income brackets pay much lower tax rates than the progressive
system calls for. Also, because taxes include sales taxes,
property taxes, and other kinds of taxes in addition to
income taxes, families in the highest income tax brackets
almost always pay lower percentages of their income in their
total taxes than low and working class families. In addition,
because State and local taxes are typically regressive rather
than progressive, low and middle class families are given a
higher percentage of taxes than wealthy families. In 2007,
out of all the income brackets, families in the middle-income
bracket paid the highest percent of their income in their
total taxes in Washington, D.C., Maine, Minnesota, New York,
South Carolina, and Vermont. In the vast majority of the
remaining States, the lowest-income families paid the highest
tax percentage, and the highest-income families
[[Page H2719]]
paid the lowest. There were no States in 2007 in which the
wealthy families paid taxes at a higher rate than the middle
and low classes.
The current tax system affects families in high-income
brackets much differently than it affects those in the low-
and middle-income brackets. First, wealthy families receive
many tax deductions. The government, on average, pays for
about 35 percent of high-income families' taxes. A second way
in which the wealthy are not affected by the tax system as
much as lower class families is that they generally do not
have to pay as much income tax. The average millionaire does
not earn their money from working; they earn money from their
investments. Taxes on long-term investments are lower than
taxes on income because the government wants to encourage
consumers to spend money. However, this means that wealthy
families that earn money from investments pay lower taxes
than middle- and low-income working families.
Finally, the families in the top income brackets are almost
never hurt by the current tax system because some politicians
do all they can to protect the wealthy. Some politicians
believe that as long as the wealthy families have money to
spare, they will make investments that will benefit the
economy and the lower classes. While this theory may or may
not be true, the higher classes continue to have lower tax
rates than the middle and low classes. The United States'
current tax system clearly benefits wealthy families.
Wealthy families are not the only ones that benefit from
this system of taxation in the United States. Poor families
are often given benefits as well. While families in high-
income tax brackets receive many breaks on their taxes, they
are not the only people that receive these breaks. Families
that are considered to be in poverty by the United States
Government are many times given breaks on their taxes as
well. For example, the Earned Income Tax Credit, or EITC, is
given to many low-income families in this country. This tax
credit gives families money back to help relieve the burden
of taxes. In some cases, the EITC gives families back more
money than they originally paid in government taxes. In some
cases, poor families also receive benefits from the current
tax system because in some cases the members of the family do
not work. In families in which no one works, there are no
income taxes or payroll taxes. These families instead receive
assistance from welfare. There is no tax on money received
from welfare, so families receiving this aid that do not earn
additional income from a job do not pay any income taxes.
Consequently, the tax system in the United States can be
beneficial to low-income families.
In the current tax system, there are certain advantages to
being in either high-income families or low-income families,
but what happens to those families that fall in the middle?
The majority of Americans are hardworking citizens that earn
a moderate salary. These citizens are the ones that have to
pay for the benefits that others receive. For example, when
the wealthy receive tax deductions, the government receives
less money as revenue, and the people that fall in the middle
are the ones that suffer.
The less money the government has, the less it can provide
funding to programs that benefit middle-income families, such
as education funding, libraries, and government aid for
skyrocketing college costs. A second way in which the middle
class is hurt by tax deductions is when poor families receive
tax credits. As previously mentioned, sometimes when families
receive the EITC, they receive more money from the government
than they originally paid.
This money comes from money taken straight from taxpayers. Middle-
income families are many times forced to pay the highest tax rates out
of any of the income brackets, and they receive no special treatment
from the United States government.
In conclusion, in the United States today, most of the burdens of
taxation are put onto the average middle-income working families. The
system of taxation is extremely unfair for working families; they work
their entire lives to have a large part of their income taken away from
them by the government when people in both high- and low-income
brackets receive special treatment from the government. The average
American family falls in the middle-income category, and in the current
tax system, this family, the heart and soul of America, is the one that
ultimately suffers.
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