Who Pays All the Income Taxes?

Obamanomics has made it popular to call on the “rich” to pay “their fair share” of taxes. Lets increase taxes to pay for ineffective, unnecessary, wasteful government spending, but lets make sure the “rich” are the ones who pay those increased taxes. After all, if they have a lot of money, they should pay a lot in taxes, right? Except what those promoting this idea often ignore is that the “rich” already pay far more than “their fair share” of taxes. They already pay almost all of the taxes.

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Great comments on The Fair Tax proposal

This comment was left on WalletPop, AOL’s personal finance blog. He was responding to a thread on hidden taxes and an ongoing discussion there.

Our current tax system is so complex that many of the taxes we pay are in fact, hidden from us. Consumers often rant about how big naughty corporations should pay their fair share of taxes. Yet the truth is that those taxes on corporations are actually paid by consumers. It’s just done in a convoluted way that obscures who’s really paying!

The comments relative to The Fair Tax:

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The Fair Tax explained

This comment was posted earlier this week on WalletPop, in response to a discussion about loans from 401(k) plans. I generally advise against taking loans from your 401(k) or other retirement plan, because before you know it, that loan could turn into a distribution. (Example: The company you work for shuts down. You have a short period of time in which to repay your 401(k) loan in full or it becomes a distribution.) Early distributions from 401(k)s are expensive. You generally lose about 50% of your money to income tax, interest and penalties. Ouch!

As part of our discussion on WalletPop, this commenter brought up the Fair Tax. I’ve become very interested in the concept of the Fair Tax recently and have been doing some reading on it. This gentleman provides good information and insight about it:

Read moreThe Fair Tax explained