×

Tax cuts are only for the rich

All we ever hear from Republicans is, we must deny benefits in order to reduce taxes. In reality our tax system is forever increasing taxes on those who have the least and reducing taxes for those that have the most. In fact many of the wealthiest people in this country pay no income tax, at all.

If people really cared about reducing their tax burden, they would stop voting for those who deny earned benefits to those with lower incomes, so grants and contracts can be provided to those who already have all the money. In theory we have a progressive system of taxation. Since the 1980s that system has dramatically become more regressive. Every time Republicans crow about “cutting taxes” you should know that means rich people will pay less and middle income and lower income folks will pay more.

A progressive income tax system taxes higher earners at a higher percent on their top dollars (marginal rates). A regressive tax is a tax where the lower-income person pays a larger percentage of income than a higher-income person. Sales taxes, property taxes, tariffs are all regressive taxes. The cap on the social security payroll tax is regressive.

Capital gains are taxed at a lower rate than wage earners. The wealthier you are the more opportunity to structure your income through investment than through earned income. A teacher, a doctor, a nurse, a fire fighter, and a factory worker, all are paid wages. A wage earner with the exact same income as an investor whose income is considered capital gains or qualifying dividends, pays a dramatically, yes dramatically, higher rate of tax. It is ridiculous. Capital gains should be taxed at the same rate, as ordinary income.

Another reason the wealthy pay little or no tax, is the tax code has been structured to offer a copious amount of credits, deductions and complications that only tax lawyers and tax accountants can understand. The wealthy would rather pay a fortune to a tax lawyer to avoid paying tax, than to just pay the tax.

Democrats continue to try and instill more fairness in the tax code. Biden’s Inflation Reduction Act allocated $79.4 billion to the IRS to increase enforcement and taxpayer services. Congress has now rescinded $41.8 billion. The hardest hit is in enforcement which will reduce federal revenue by tens of billions through 2034, per government forecasts.

The only folks benefitting from reducing the IRS budget, are, those who already have all the money. The cost to the average person increases, as fewer audits are conducted of wealthy individuals and big corporations. The CBO estimated expanding IRS funding of $80 million through the Inflation Reduction Act would have led to a net revenue increase of $637 billion over the 10-year budget window.

In Chautauqua County it is important to understand why Republicans voted not to reduce the sales tax, and not to use the slush fund to reduce the property tax. Sales taxes and property taxes are regressive putting the burden on the middle and lower class. On the federal level, as long as this Congress remains in power, states and local governing bodies must find a way to provide services all of us depend on, while the feds rob the poor to give more to the rich.

Stacey Curry is a Jamestown resident.

Starting at $4.00/week.

Subscribe Today