Yahoo News yesterday posted an Associated Press story reporting that about 47 percent of United States households do not pay income tax. Because of the tax credits for low and middle-income families, a family of four, with two children under the age of 17, with an income of as much as $50,000 will owe no federal income tax for 2009. Tax cuts for low and middle-income families were expanded when President Obama signed the economic recovery package last year. The top 10 percent of earners pay about 73 percent of the income taxes collected by the government. When you consider that these are the people who hire people and buy things, it is no wonder that the economy is not doing well--a major part of the disposable income that could grow the economy is going to the government!
In 2007, 38 percent of households paid no income tax; in 2008, 49 percent. This is dangerous for a democracy. This means that nearly half the people in the country have no reason to care if taxes are raised. It is also going to be interesting to see how this plays out as a VAT (Value Added Tax) is discussed to pay for the Obama Agenda. A VAT affects everyone--regardless of how much money they make. A VAT tax is an unseen tax--most of it is applied during the manufacturing process--that can increase the cost of any item as much as 20 percent. As consumers, we may not be aware of the tax itself, but suddenly our spending power will decrease significantly.
I will be attending a Tea Party in Worcester, Massachusetts, on April 15th. I hope everyone reading this will at least stop by their local Tea Party on that day to compare what they see with what they hear on the news!
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