Welcome to the new economy where unicorns and rainbows make the world go ’round. Oh, and also, look at the person next to you, they probably don’t pay any income tax. The Tax Policy Center has released new data that shows about 47% of the United States population pays any income tax. Thanks to many tax credits and some of the Bush tax cuts most low to middle income families will pay no taxes at all. A family of four that makes $50,000 will pay no income tax at all. What makes it even more disgusting is that many people get so many tax credits that they actually make a profit from the federal government. Yes, not only do they have 0 tax liability, but the federal government cuts them a check . . for nothing!

So who is footing the large majority of the bill for the services we all enjoy? The top 10% income earners bear 73% of the entire tax burden for this country. One of the best criticisms I’ve ever read of our progressive tax system was something like this. Imagine that you and 9 friends go out for dinner. The bill comes to $1000 dollars and now you have to decide how you want to split the bill. If you split the bill like our tax system, here is what happens. Friend 1-5 will pay nothing (free dinner!). Friend 6 will pay about $25, friend 7 about $75, friend 8 & 9 will pay about $150 and you would end up paying about $800 dollars.

Our liberal friends would say that it’s not fair that the rich should enjoy so much more then the rest of us and not pay such a substantial portion of the tax burden. My response is; is it fair that one American has to pay so much more for the very same services? Your sense of fairness is much different then my sense of fairness. I thought our Constitution was founded under equal protection of the law and that no American should be treated differently then another.

It’s really time to get rid of the byzantine tax system we have and adopt a fair tax or flat tax system. Margaret Thatcher once said “the problem with Socialism is eventually you run out of other people’s money to spend.” This is precisely what will happen if our tax system and tax philosophy are not updated in a meaningful way.