Anyone who has been paying attention already knows that about 50% of Americans pay no federal income taxes. That number alone should give us all pause. But, according to this Fox News article the situation is much worse.
“Right now about 70 percent of Americans take more out of the tax system than they put into it, according to the Tax Foundation,” Brooks said.”That’s something that should really alarm a lot of Americans.” (Bold added)
So, if the American Enterprise Institute is correct and 70% of the people take out more than they put in, then only 30% of the people are carrying the load of our federal government. Is that possible? Yes, it is. For example, our tax code allows some people to get refunds from the IRS far greater than what they paid in. These people are not doing anything to screw the rest of us. That is just the way the tax code works. Also, many people who are retired and receiving Social Security benefits have other income; such as pensions, that cause them to pay some income tax; but, far less than their SS benefits. On top of that we have more and more people living off of our welfare system. So, I suspect the American Enterprise Institute is correct when they say 70% of the people take more out of the tax system than they pay into the tax system. That, my friends, is worrisome.
Let’s look at some more scary data in graphic form. This graph I borrowed from Inform the Pundits blog. This is a graph of the percentage of people over the age of 16 who are actually participating in the workforce. Note that our current participation rate is as low as it was in the late 1970s. That’s bad but what is worse is the trend.
Labor Participation Rate Put Into Perspective
The comedy continues: the April “Not in labor force” seasonally adjusted print: 88,419,000. And yet, the maximum reading permitted by St Louis Fed Not in Labor Force (LNS15000000) graph: 88,000,000. The data has now officially dropped off the chart. No further commentary necessary.
- Unless there is a dramatic pent-up demand for products and services our companies already produce, jobs are going to have to come from new businesses producing new products and services that we don’t yet know that we need. In other words, jobs will come from innovation. But, we know that innovation flourishes best in free market economies. Therefore, we know that is not going to happen if Obama is reelected.
- Another way jobs will be created here and in other developed countries is if or when the BRIC (Brazil, Russia, India and China) countries become more consumer oriented. In other words, the world needs more customers;i..e., more wealth.
I believe both of these things are going to happen. The problem is that these things take time; possibly decades. In my opinion, many people in the developed countries, who are not accustomed to doing without, are in for a very difficult period of time.
Well, that’s what I’m thinking. What are your thoughts?