Obama and his ilk are always asking the rich "to pay their fair share" in federal income taxes. The Tax Foundation will testify tomorrow on Capitol Hill that the U.S. tax code is ridiculously complicated and unfair.
Roughly half of Americans pay no federal income tax. But, let's face it: The U.S. government has become a giant income redistribution machine and an inefficient one at that, more interested in social engineering than in raising revenue to perform functions that only governments can provide (a judiciary, an army, and etc.). The rest is all a thicket of special interests and aims to achieve whatever social goals are popular at the moment. Oh, and do you have clients who own businesses? Just wait until the Bush tax cuts expire.
Here is the Tax Foundation's very perceptive assessment of the U.S. tax code:
Washington, DC, May 2, 2011-Tomorrow morning Tax Foundation president Scott A. Hodge will testify before the Senate Finance Committee on whether the distribution of tax burdens and benefits is fair and equitable at the federal level. Hodge's testimony will go beyond the usual critiques to question the structure and goals of the of the U.S. tax system itself.
"In many ways, the costs and benefits of the current system are not equitable—just not in the way that most critics think," said Hodge. "The proliferation of special interest tax preferences, the rising number of nonpayers, and the increasingly redistributionist nature of the federal income tax all contribute toward a system that is geared more toward enacting social policy than raising revenue."
Hodge's testimony will question the motivation behind many of the changes in the U.S. tax code in the last 25 years, the era since the last major overhaul and simplification of the federal system. He will ask members of the committee to consider what is fair not just for individual taxpayers at various income levels, but what constitutes an equitable economic system for the country at large.
Scott Hodge is the author of dozens of studies on tax policy, many focusing on individual and corporate taxes at the federal level. His recent studies include Tax Foundation Fiscal Fact No. 231 "States Vary in Distribution of Who Bears the Burden of Federal Income Taxes," Tax Foundation Special Report No. 185 "Over One-Third of New Tax Revenue Would Come from Business Income If High-Income Personal Tax Cuts Expire," and Tax Foundation Fiscal Fact No. 214 "Record Numbers of People Paying No Income Tax."
The hearing, "Is the Distribution of Tax Burdens and Tax Benefits Equitable?" will take place at 10:00am ET in Room 215 of the Dirksen Senate Office Building on Tuesday, May 3, 2011. Scott Hodge's written remarks to the committee will be available online at taxfoundation.org after the hearing.