What we need is changes to the tax code

I've been thinking a lot lately about our tax code. I tried to research how many Americans don't pay taxes, or in other words either get back all they paid in or more, but it's very varied. You can see the political slant in everything I researched, except one. http://www.taxfoundation.org/publications/show/25962.html

These are cold hard facts, which is what I wanted, and not some fairy tale that included illegal aliens. We can't really count that, as I would assume they don't file.

In a nut shell, this chart tells how many returns there were, and how many got all of their money (or more) back come tax time. It starts with 1950, when 53,060,098
claims were filed. There were 14,873,416 that got back their taxes or more. That's 28%. The number has ranged from 16.0% (in 1969)to 36.3% (in 2008). This table doesn't break it down into pay ranges.

This page: http://www.taxfoundation.org/research/show/1410.html breaks it down by state.

I had thought that far more didn't pay taxes, so I was mildly surprised. I don't mind people under a certain wage getting their taxes back. Here's my suggestion: don't let the refund EVER be more than what they actually paid in taxes. In other words, these stories you hear about people making $12,000 in wages for the year and getting back $8,000 in a refund is absolutely ridiculous. If they didn't pay it in, they shouldn't get it back. By them getting more than they paid in, they're taking it from the ones who don't get any back. Taxes are supposed to go to run the government, not pay low income people. That's redistribution of wealth, pure plain and simple.

Here's how our tax brackets look:

Single 2010 Tax Brackets

Taxable Income: Income Tax:
$0-$8,375 10% of the amount over $0
$8,375-$34,000 $837.50 plus 15% of the amount over $8,375
$34,000-$82,400 $4,681.25 plus 25% of the amount over $34,000
$82,400-$171,850 $16,781.25 plus 28% of the amount over $82,400
$171,850-$373,650 $41,827.25 plus 33% of the amount over $171,850
$373,650+ $108,421.25 plus 35% of the amount over $373,650

I think they make it complicated on purpose. But, basically the argument that the rich aren't paying their fair share is bunk. As you can see from the table, those making over $373,650 pay back 35%. So they start out paying $108,421.25 and then anything over the %373,650 is taxed at the 35% rate. That's not enough for the socialists? A majority of them don't get a lot back, either. Not so for those under the 25% mark. They usually qualify for Earned Income Tax Credit. So, they not only get back all they put in (which is the $4,681.25 plus 25% of the amount over #34,000), but they could get back much more than that.

It used to be if you got back a large refund, they wanted to know why. Now they hand out EITC's like candy. We made just a bit too much to get the EITC, but lets suppose we didn't. My Brother-in-law is in the 33% bracket. It would have been like taking his money and putting it in my bank account. I didn't earn it, but the government is going to give it to me anyway. We usually end up breaking even (meaning we paid the right amount of taxes) give or take under $100. This past year we paid $39 over what had already been collected. Two years ago we got back about $1,000, but last year we owed over a $100.

So, if we all agreed to the tax bracket, as complicated as it is, why do we feel the poor need even more than just what they paid into the system? I realize this has been going on for longer than the current Democratic President. From the best I can find out, the EITC started in 1975, under President Nixon. I wonder why the democrats would support something that a Republican president started? Because the more the government puts out, the more they can claim they're broke.

My solution? Use the current tax brackets that we have, but come time to file, you don't get back more than you put in. If the poor think this isn't enough, we should reconsider what is taken out. They can always claim all their dependents on withholding, so the government doesn't withhold as much. If you claim no dependents, the government will take out more, and you'll get more back. That's sort of like loaning it to the government until tax time.

Here's a good table for how many returns were filed...http://www.irs.gov/taxstats/article/0,,id=102886,00.html

If you look at individual tax returns, the income to the government based on the number of returns was .8% (based on they had so many files, and $x in income). The "evil" corporations had a much higher percentage: 9.1%

I don't see why we couldn't save billions of dollars by just getting rid of the Earned Income Credit. Further more, we could refund all but $20 and save even more.

When one doesn't pay taxes, one doesn't have an investment in this country. It's like renting a house versus owning it. You don't have skin in the game.

Now, I've said it before, I also believe congressmen shouldn't get as much as they do for their staff. I found an article that said that the house representatives get something like $500,000 for their employees. Do small business owners get that? No, they pay out of their own pay. No one pays them a $174,000 salary, plus giving them $500,000 for their employees. If you consider that, congressmen really make $674,000. What if they don't have the 18 employees they're allowed, do they get to keep the money? It would behoove them to only have one employee and pocket the rest of the money. Is that how they leave congress billionaires?

Just my 2 cents.