Taxes, Lies and Videotape… Ramblings of a Boston Personal Bankruptcy Lawyer
None of our clients enjoy paying taxes. Our personal injury clients do not pay taxes on their net recoveries, but they pay taxes! Our bankruptcy clients can discharge some older tax bills, but no recent taxes, and they know they will be paying their taxes in the future. However, like death, taxes come for us eventually. That said, there seems to be a lot of misconception out there about why pay and who pays what.
Thus, we have checked with numbers from the non partisan Congressional Budget Office.
Families who earn between $35,400 and $52,000 (in 2006), the “middle fifth” income bracket, paid on average 3% of their income in taxes, but, they paid 9.5% in payroll taxes and 14.2% overall in federal taxes, according to the Congressional Budget Office. The CBO estimates that only about 10% of all households pay no federal taxes.
Families with less income are not paying income tax beyond “payroll tax.”
These payroll taxes are, of course, regressive, because they are flat up to a much higher income level and zero thereafter.
Notwithstanding some on talk radio and the web, it is clear that we have to pay some taxes if we want a national defense, national airports, national highways, and someone to collect manager the social security and Medicare we’ve paid in our whole careers. The same goes for state and local governments with respect to roads, schools, trash collections, etcetera. Let’s ask our elected representatives some good, hard questions. But let’s have the facts first.