4 Why We Pay Taxes

Taxes are the dues we pay to belong to Club USA. The Club provides enormous benefits to its members – safety, prosperity, freedom, security, community. It charges dues on a sliding scale, based on its members’ ability to pay. April 15 is Dues Day.

Some say taxes are theft. I say that taking Club benefits without paying dues is theft.

Some say they would like to starve the Club to death – “to get it down to the size where we can drown it in the bathtub.” I say that folks who don’t like our Club should join a different one.

I’m tired of paying my Club dues regularly and honestly and listening to freeloaders who shave their taxes run the Club down on talk radio while expecting the Club to bail them out whenever they’re in trouble.

Honest taxpayers are the true silent majority. It’s time for us to speak up.

Freeloaders, pay up or get out.

Comments

[Shane]

Amen! As a member of the silent majority, I loathe those that simultaneously spurn the notion of taxation while availing themselves of the benefits and protections afforded to them by virtue of membership in the Club. Pay your dues-and be happy about it!

[Patrick]

"I say that taking Club benefits without paying dues is theft."

Amen. 50% of the Club members don't pay any dues or pay minimal dues in comparison to the 1% of members that pays close to 40% of the dues. Perhaps they need to pay up or get booted out of the Club, right?

[Kat]

Dear Patrick, I applaud your fervor, but, pray, where do you propose to send the single-mothers-of-two who, by virtue of having no income, receive tax credits in excess of their tax obligation? Amen to stricter audit, fewer deductions, and a CASHLESS economy.

[Patrick]

My point was that the analogy of government as a "club" where everybody pays, even on a sliding scale, fails, since there are many who don't pay anything, and there are even some, as you point out, who receive funds (EITC, etc.) through the tax system.

In any case, who are these "freeloaders" on the radio? Rush Limbaugh? Sean Hannity? Some two-bit tax protester show? And how does anyone know that they "shave their taxes"? Painting with a broad brush.

[Theodore Seto]

Patrick,

The amount by which taxpayers underreport or underpay their federal taxes is sometimes known as the "tax gap." The last year for which the Treasury has published an estimate of the tax gap is 2001, for which it estimated a tax gap of between $312 and $353 billion. To place this in context, the individual income tax raised $1,178 billion that year. What this means is that if everyone had paid their taxes honestly, and individual income tax rates had been reduced to raise the same overall amount, your taxes could have been 25-30% lower. Every dollar that someone shaves off their taxes is a dollar more that honest taxpayers have to pay.

[Michael]

Great entries so far. I hope you continue the blog and become a frequent contributor to the economics blogosphere. I check this site every day for new postings.

[Patrick]

Professor, you know that "tax gap" theories are based on mushy science. But regardless, an underlying assumption is that those who advocate for smaller government and less taxes are the ones who are doing the shaving. I think that is patently false. Except with regard to the tax protester crowd, who make up a small but admittedly loud minority of voices, those who advocate for smaller government and less taxes do so largely because they are honest and law abiding and pay what the "Club" demands. But it is still painful and frustrating, especially when we see the out-of-control, wasteful spending of government.

Again, to what "talk radio" "freeloader" personality are you referring? Citation please.

[Peter]

Hey, Professor, what happened to my post? Like my hair, it was here yesterday but gone today.

[Peter]

Hey, Professor, what happened to my post? Like my hair, it was here yesterday but gone today.

[Theodore Seto]

Dear Peter,

The rules for my blog are the same as the rules for my class: I welcome different views from my own, civilly expressed. (The President of our school's Federalist Society was in my last Tax Policy course. He made important contributions to the class. I gave him a grade that I hope he was very happy with. Were he to request a letter of recommendation, I would give him a glowing letter.) Impugning my views or those of any other participant other than by reference to the merits of the views themselves is out of bounds. I welcome your continued participation on the foregoing terms.

[Peter]

My blog was civil.

There was no profanity in it, no threats, merely an observation. I am shocked at how hypersensitive you appear to be.

If you disagreed with my observation, why didn't you just refute it rather than censor me.

Could it be that it touched a nerve?

So much for "academic freedom" and the first amendment, huh?

[Peter]

Incidentally, I would be honored that anyone thought enough of my posts and my blog to take time to leave a comment. Thus far, I have not had the good fortune yet to be "uncivilly" rebuked for my views. But truth be told, I can't wait for it to happen. It will mean I've arrived.

[Peter]

By the way, the fact that my blog contains a link to your site contrasts our views of free speech starkly and eloquently.

Professor Seto, I wouldn't think of censoring you.

[James]

This is a callow post. The tax system is biased in favor of the rich and the poor against the middle class. By "the rich" I mean those who live off of their wealth and pay taxes only on capital gains and qualified dividend income, and by "the poor" I mean the half of the country that pays 3% of the income taxes. Those who are punished are the high-income earners, regardless of whether they are rich. Those are the people who start businesses that employ people and produce innovation in the United States, but we tax them into the ground in the name of "fairness." Stated differently, if the US Army protects us all, why does 1% of the population pay 40% of the cost? Don't worry, soon Wall Street will be just as poor as the rest, and all members of the "Club" will be equal in their misery.

[gh]

"Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as "bad luck."

Rober A Heinlein

[Chris]

The rich don’t pay taxes.
Go ahead, raise their taxes.
Guess who pays?
We do.

They own businesses. When you raise their taxes, they raise their prices. This applies to tax rates on businesses themselves by sales tax rates, and individual taxes charged to their owners and officers.

Any time the gov’t raises taxes on ANY group in America, it only ends up taking control away from ALL of us to keep prices reasonable and to manage our own money.

[ed hardy]

Great work! I really enjoyed this article! Hope to read more from you soon!
ed hardy clothing

[Larry]

I enjoyed reading this and agree completely.

[john]

It is true that we must obey the rules of society to be worthy to live in it.

Those who dont pay tax due to being poor, are perfectly entitled to their status.Those who are financially able and resent, or do not pay their tax are in my view,guilty of theft.

[air jordans]

Write very well, there are some others that resonate.

[Iphone Recorder hotfile]

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[Jenny]

They own businesses. When you raise their taxes, they raise their prices. This applies to tax rates on businesses themselves by sales tax rates, and individual taxes charged to their owners and officers. http://www.mediafilelinks.com

[Compra medicinas para aumentar el conteo de esperma bajo]

Paying taxes is never a pleasant thing even if I can understand them.

[Invertir en franqucias]

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[איפור מקצועי]

It is true that we must obey the rules of society to be worthy to live in it. Those who do not pay tax because they are poor, they have every right to their status.Those who are financially able and can not stand, or do not pay their taxes are, in my opinion, guilty of theft.