When Taxes Aren’t an Issue
Mark Perry observes (with charts) a progressive trend in American taxation:
The Tax Foundation reported last week that more than 143 million individual income tax returns were filed in 2007, and 46.6 million of those returns had a zero or negative tax liability, setting a new record for the number of “non-payers.” This group represented almost one out of every three tax returns filed in 2007 (32.6 percent, see chart above), and reflects tax filers whose exemptions, deductions, and credits wiped out any federal income taxes that would have been due. According to the Tax Foundation, every dollar withheld from the paychecks of the “non-payers” during the year was refunded, and in about half of the cases, substantial additional money was refunded to the tax filer. There were an additional 15 million people in 2007 who did not earn enough income to file a tax return, bringing the total number of Americans who paid no federal income taxes to more than 61 million, or 39 percent of the tax-eligible population (158 million including filers plus non-filers).
As Perry notes in the words of American Enterprise Institute Economist Alan Viard, increases in government spending likely mean less to people who don’t think they pay for it. This one item is not a complete explanation, but we appear to be witnessing the realization of a risk that has been foreseen with democracy all along: the majority can simply vote itself money from the minority, disregarding or ignorant of the self-destructive nature of that practice.