Taxes

The latest statistics from the Internal Revenue Service show that the top one percent wealthiest people pay 40% of federal income taxes collected. The top 25% - those with incomes over $64,702 - paid 86.3% of federal income taxes. A person (or couple filing jointly) is in the top one percent with an income of $388,806 and above and in the top five percent with income of $153,542 or above. Over 43,000,000 tax returns with positive income got back all money and several million received back more than they had paid in through the Earned Income Tax Credit. This credit was started by President Nixon as a way to encourage people to get off welfare by rewarding those willing to take even low income jobs.

The six largest tax deductions, in billions, are 1) Health Exclusion, $116.8; Retirement/Benefits, $89.8; Home Mortgages $67.0; Earned Income Credit, $48.6; State and Local Taxes, $48.0; and Charitable Contributions, $44.3. We have the most confusing, complicated, convoluted tax system. It has so many thousands of pages of fine print that no human being can really understand or know it all. Almost any system would be better than what we have now, but there is probably no chance to drastically reform and simplify our tax code. Too many very powerful and organized groups, individuals, charities, and so forth benefit from the system we now have.