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Three in Five Americans Think That Our Tax System Benefits the Wealthy

by Kelly on December 18th, 2007

Bankrate, Inc. has published the findings of a national poll which found that 60% of Americans think that our current tax system benefits the rich. Of course, this comes as no surprise to most of us. You know that I already think that way, more or less. And so does Warren Buffet.

What do you think?

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Jim Newhard, CPA
Dec 18, 2007 at 2:36 pm

The irony is that the 5% “wealthiest” pay nearly 80% of the income taxes, and that Warren Buffet likely engages a multitude of professionals to ensure he is sheltered, that his assets will face the least possible estate tax, and that he will transfer his wealth to his heirs will the smallest possible erosion by death taxes.

Funny his rants don’t match his actions - after all, any American can voluntarily pay more income taxes!

While there are many opportunities available to the “wealthy,” the tax system absolutely favors the “poor” — who can get federal tax refunds without having ever paid any federal tax. I’m not busting on lower income folks - I’m saying the system needs to be discriminating. We (US) currently have one of the highest corporate tax rate structures on planet earth, not to mention one of the highest paid labor forces — these factors are what sends American business and jobs away from the US! So if you raise individual rates higher specifically on the “wealthy,” they will move income to another tax base, and the US loses that income base. The result is ultimately, middle class will get crunched even more! So be careful what you wish for - you could get it!
John Galt
Dec 18, 2007 at 6:00 pm

Jim - I am sure you realize that US taxpayers (individuals) pay tax on their World Wide income so the concept of moving their tax base offshore is not an easy thing to do. Unlike a corporation changing your residency is a tad more difficult since we are talking about people and that would require among other things renouncing your citizenship. Also under the 877 rules depending on your income levels you could still be subject to tax for 10 years.