[Congressional Record (Bound Edition), Volume 158 (2012), Part 5]
[House]
[Pages 6894-6895]
[From the U.S. 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, DC, 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 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

[[Page 6895]]

     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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