Why does the IRS tax people living below Federal Poverty Levels? Insane immoral tax structure?
Single, no dependents = Less than $9,225 pays 10 percent of taxable income (2017) FPL = $11,880 (2016). ETIC not available to a single, no dependents. Why are people living below FPL being taxed at all? I would think that a SPNK below FPL should have 0% IRS tax (other than UI & SS that is part of FICA). IRS audit $10/hr single Mom/2 kids because 'nobody can live in Seattle like that for less than$36k - irs-goes-after-mothe
The fed Income Tax is discriminatory and it should violate the Equal Protection Clause. It is not the 16th Amendment that can be deemed unconstitutional, because it is an amendment.
But, the application of that amendment into the USC and the resultant Internal Revenue Code can be unconstitutionally applied.
The 1986 Tax Reform Act also was damaging to the middle class, as well as those in poverty. This is because it took away tax deductions that both classes had used over the years to at least protected some of their money from being taxed. A tax deduc is not like a tax credit, but it helped in paying for their cost of going to work, and reducing their total taxes.
While, people think that the rich are being heavily taxed because of their higher marginal tax rate, they have the advantage of being able to skillfully use the Internal Rev Code to significantly reduce, defer, or even eliminate their tax obligation. In addition, most of the rich are not wage earners, and they make significant income from capital gains, which is only 20%.
Many of the rich hold significant wealth in stocks and until those stocks are sold there is no tax being paid. Yet, they can control stocks and their profits because of it. They also have the ability to wrap their wealth into trust funds and numerous other business wrappings.
Something that the middle and lower tax class can't do.
FICA is a Tax that both of these classes will probably not get any benefit for 50 or more years. The rich don't need any benefits from FICA, and even when they pay it, their total income makes these tax deductions negligible. But for the lower tax people, these are significant amounts out of their check.
A national sales tax like those state sales tax would be beneficial and less discriminatory, as the items of necessity can be excluded. And with the day of the computer and coupon cashing manipulation, these exclusions are easily programmed into the system.
A national flat tax still leaves the IRS and IRC in place.
Even though the codified Income Tax laws should be held unconstitutional as applied, the SCOTUS has refused any attack on it, and there have been many over the years.
So the current Income Tax system hurts the low, and middle class while favoring the rich who can easily use the IRC. And claims that the 1% pay 90% of the taxes while sort of true, doesn't factor in how much they are not paying on their total wealth.
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