[emphasis added by OP]

The Income Tax System is Broken

43 Percent Of Americans Pay No Federal Income Tax, A Sign That Something's Wrong, Writes Declan McCullagh

April 15, 2009 | by Declan McCullagh

(CBS) On April 15, don't be surprised if the line at your local post office is a bit shorter than usual. That's because your neighbors may not be paying any income taxes this year.

An astonishing 43.4 percent of Americans now pay zero or negative federal income taxes. The number of single or jointly-filing "taxpayers" - the word must be applied sparingly - who pay no taxes or receive government handouts has reached 65.6 million, out of a total of 151 million.

Those numbers come from an analysis published yesterday by the Tax Policy Center, a joint project of the Urban Institute and Brookings Institution. Neither is a low-tax or conservative advocacy group; the Urban Institute was created under the Johnson administration during the Great Society era, and it receives most of its funding from the federal government.

"You've got a larger and larger share of people paying less and less for the services provided by the federal government," says Roberton Williams, a senior fellow at the Tax Policy Center. "The concern is that the majority can say, 'Let's have more benefits, spend more,' if they're not paying for it. It's 'free.' That's not a good thing to have."

By historic standards, today's situation is an aberration. Between 1950 and 1990, the number of owe-no-money federal tax returns averaged 21 percent, dipping to 18 percent in 1986, according to Tax Foundation data. In the 1990s, the owe-no-money percentage hovered around 25 percent of taxpayers.

But then politicians began another round of tinkering with the tax code, adding reams of new pages to an already incomprehensible set of rules that even the guy overseeing the IRS can't seem to figure out.

Democrats wanted to lower taxes on the least affluent, while Republicans wanted to lower taxes on everyone. The result was bipartisan enthusiasm for tax credits aimed at everything from children (1997) and college students (1997) to hybrid cars (2005) and homebuyers (2009). Many of these credits dole out cash to people even if they report no income, making them mere government handouts.

"There's no difference at all in terms of the effects on the federal deficit," says Williams of the Tax Policy Center. "It's perfectly equivalent. It's just easier to say, 'I cut your taxes' as opposed to 'I created a new federal program to send money to people.'"

I'm talking here about federal income taxes, not other taxes like Social Security, Medicare, state income taxes, sales taxes, or car registration taxes, some of which are extracted through payroll deductions. The owe-no-money crowd tends to get hit by at least some of those.

The perils of today's situation should be obvious. The United States is close to a tipping point - where most people can skip the post office run on April 15 to mail a check because they're expecting one from the government instead.

"It is somewhat odd that you have a decreasing number of folks paying into the federal income tax system, a decreasing number of folks who have a stake in what the government pays for," says Matt Moon of the non-partisan Tax Foundation in Washington, D.C.

It then becomes tempting to vote for politicians promising more and more handouts, paid for by money forcibly extracted from an ever-shrinking number of their neighbors. In addition to being immoral, it's poor public policy: people who pay no taxes but nevertheless get benefits are less likely to be careful overseers of their elected representatives.

"At some point people become less and less invested in making sure their government is accountable and frugal," says Peter Sepp, vice president for policy and communications at the National Taxpayers Union, a lower-tax advocacy group. "If you pay very little for getting all kinds of government benefits, you might view those programs as a bargain, even though they may waste tens of billions of dollars a year."

As a candidate, President Obama promised still more tax credits, including ones aimed at child care, "clean cars," and savings accounts. As the Wall Street Journal explained at the time: "You can receive these checks even if you have no income-tax liability. In other words, they are an income transfer - a federal check - from taxpayers to nontaxpayers. Once upon a time we called this 'welfare,' or in George McGovern's 1972 campaign a 'Demogrant.'"

A recession, the stimulus, and innumerable bailouts have placed Mr. Obama's plans on hold. But the expiration of the Bush tax cuts at midnight on December 31, 2010 will renew interest in a tax law rewrite.

That will be an opportunity to gut the current system and replace it with something simpler and fairer. After all, if government is important enough to force most of us to work until April 13 to pay its bills, why shouldn't everyone share the pain?

Declan McCullagh is the chief political correspondent for CNET and a CBS News EconWatch contributor. Previously, he was Wired's Washington bureau chief and a reporter for Time.com and Time magazine in Washington, D.C. He has taught journalism, public policy, and First Amendment law. He is an occasional programmer, avid analog and digital photographer, and lives with his wife in the San Francisco Bay area.

By Delcan McCullagh

© MMIX, CBS Interactive Inc. All Rights Reserved.

The thing about economics is you typically don't know much about whether something's going to work until you try it and it does or it doesn't. It's not an exact science due to all the variables that are at stake here -- one of which is simple human nature.

That seems to me to be the most level-headed thing I've seen you post, Beth.

Stocks drop on economy worries - Stocks & economy- msnbc.com

Been there, saw that. What's your point? I don't really understand how that relates to what I've been lambasted for. But maybe, unlike Beth, the economy is not all about me.

You mean like how a certain someone still has not proven he was born in this country?

So the State of Hawaii lied in the news conference that his birth certificate was on file?

The thing about economics is you typically don't know much about whether something's going to work until you try it and it does or it doesn't. It's not an exact science due to all the variables that are at stake here -- one of which is simple human nature.

That seems to me to be the most level-headed thing I've seen you post, Beth.

Thanks -- I think...

So the State of Hawaii lied in the news conference that his birth certificate was on file?

It's possible, yes.

Stocks drop on economy worries - Stocks & economy- msnbc.com

Been there, saw that. What's your point? I don't really understand how that relates to what I've been lambasted for. But maybe, unlike Beth, the economy is not all about me.

Wait, what?

It's possible, yes.

Are you making your kool aid with Splenda? We all know about liquid calories.

Are you making your kool aid with Splenda? We all know about liquid calories.

Hehehe.

In all honesty, did he prove it in a way that was acceptable to me? No, not really. There were a lot of questions over the legitimacy of the documents that were scanned -- some with a seal, some without, some with different dates of birth showing that he wasn't really born here but his mother obtained documentation when he was a week or two old.

Could it be simple conspiracy theorism? Sure, as much as the "did Bush steal the election" scenario was. The legitimacy of Obama's citizenry can be as serious or as silly as people choose to make the "Bush stealing the election" case.

Ever heard the term "Drive it like you stole it?" that is exactly what the last 8 years was like.

Stocks drop on economy worries - Stocks & economy- msnbc.com

Been there, saw that. What's your point? I don't really understand how that relates to what I've been lambasted for.

I don't think I've "lambasted" you. But to answer your question, I found an economist on the extremely liberal MSNBC that wasn't very optimistic on the economy. Remember the "Most credible economists agree Obama's plan is good" thing?

It was actually the 2nd thing that Google pulled up. The first was someting in a conservative paper, so I didn't even bother posting that one for ya.

Why don't we focus here on Beth's assertion that Obama wasn't born in the U.S.A.?

And she compares it to the election steal? Weren't you able to read or listen during the first Bush election, Beth? Had your head in the sand or something?

Have you ever known anyone who has been born out of your state? Do you understand how citizenship things work? Do you know what a naturalized citizen is? Do you know how many states we have?

You're just mad because the Democrats were able to prevent the Republicans from pulling the same bullshite in the last election that they did in the previous two. I know you're disappointed, but if I were you I don't think I'd go around claiming that those elections relate in any way to president Obama's birth certificate. Of course, I'm not you. And that's a good thing, right?

"There's no amount of evidence or data that will change somebody's mind," says Michael Shermer, who is the publisher of Skeptic magazine and a columnist for Scientific American, and who holds an undergraduate and a master's degree in psychology. "The more data you present a person, the more they doubt it ... Once you're committed, especially behaviorally committed or financially committed, the more impossible it becomes to change your mind."

Any inconvenient facts are irrelevant. People who believe in a conspiracy theory "develop a selective perception, their mind refuses to accept contrary evidence," Chip Berlet, a senior analyst with Political Research Associates who studies such theories, says. "As soon as you criticize a conspiracy theory, you become part of the conspiracy."

Evan Harrington, a social psychologist who is an associate professor at the Chicago School of Professional Psychology, agrees. "One of the tendencies of the conspiracy notion, the whole appeal, is that a lot of the information the believer has is secret or special," Harrington says. "The real evidence is out there, [and] you can give them all this evidence, but they'll have convenient ways to discredit [it]."

Whatever can't be ignored can be twisted to fit into the narrative; every new disclosure of something that should, by rights, end the controversy only opens up new questions, identifies new plotters.

That is a great post, terridoogle.

The old "the president is a socialist" conspiracy theory is a prime example of how irrelevant the truth is to that claim.

The election process of 2000 is not a "theory" however. There is plenty of factual data that has been made public from the night of the election into the years that followed.

But I do think what you posted is a theory that might explain why people like to debate theories here on LBT. And might also tell us why those who oppose the beliefs and ideas of a poster, would insist repeatedly that the poster "prove" their beliefs and ideas.

And it would also explain why those who share common beliefs, ideas or theories would not ask for proof from each other. They use each others' posts to become even more "behaviorally committed" and "the more impossible it becomes to change your [their] mind."

Hells yeah, I'd like a toddy. But I won't drink your kool-aide without some 101 proof vodka.

I noticed there was no...

re:Iraq war cost

but I will take some kool-aid. With the exception of Jean everyone else in this thread seems to be doing a lot of indulging.