[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.

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.

As is the "Bush stole the election" conspiracy theory.

Beth are you just intentionally being silly about the election or do you really not know what went down? There sure is a lot of information readily available about all the improprieties that went on. Perhaps you didn't live in a state where the election was stolen. Many of us did and we know the reality of what happened. It isn't a theory. It's not something we had to go somewhere and research like you must need to do. We lived through it, watched it happen right before our eyes. We've had this discussion on LBT many times, specifics were cited, questions were asked and answered. Guess you weren't around then.

Anyway, there are probably some valid instances you can use to accuse people of "drinking the kool-aide" but you really should let the election one go. I'm not saying you have to of course, but just making a suggestion because I care so much about you and the image you project.

Beth are you just intentionally being silly about the election or do you really not know what went down? There sure is a lot of information readily available about all the improprieties that went on. Perhaps you didn't live in a state where the election was stolen. Many of us did and we know the reality of what happened. It isn't a theory. It's not something we had to go somewhere and research like you must need to do. We lived through it, watched it happen right before our eyes. We've had this discussion on LBT many times, specifics were cited, questions were asked and answered. Guess you weren't around then.

Anyway, there are probably some valid instances you can use to accuse people of "drinking the kool-aide" but you really should let the election one go. I'm not saying you have to of course, but just making a suggestion because I care so much about you and the image you project.

BJean, for every story you have that the election was stolen by the republicans, I probably have five that talk about the improprieties of the democrats -- dead people voting, people voting in multiple counties, etc. Whatever you accuse the right of doing was simply learned because those on the left have been doing it so long. They're just pissed that their tricks may have been used against them.

Do I believe the election was "stolen"? No, I do not. I believe it was ATTEMPTED to be stolen by the left and they can't believe it didn't go down.

Y'know ya'll.... none of us can really know "what went on" unless we were in the freakin' room while it was going on!!! Keep that in mind.

Y'know ya'll.... none of us can really know "what went on" unless we were in the freakin' room while it was going on!!! Keep that in mind.

Regardless, I think there are tricks going on on both sides. We do NOT have an election process that keeps crap from happening.

Terridoodozle, I WAS in the room.

It is hilarious to read Beth's post. The left didn't attempt to steal anything in the 2000 election. In fact, they were stunned by the stuff the Republicans pulled off. We all were. And you should have been watching instead of drinking the kool-aide.

This time, our man did win, or hadn't you noticed? We went to task on the two former elections and since Bush had blocked every attempt to have a ligitimate election process, the Dems got real busy. Paybacks are hell, eh?

Terridoodozle, I WAS in the room.

It is hilarious to read Beth's post. The left didn't attempt to steal anything in the 2000 election. In fact, they were stunned by the stuff the Republicans pulled off. We all were. And you should have been watching instead of drinking the kool-aide.

This time, our man did win, or hadn't you noticed? We went to task on the two former elections and since Bush had blocked every attempt to have a ligitimate election process, the Dems got real busy. Paybacks are hell, eh?

Wow, you really believe this crap you spew, don'tcha?

No more than you, dear.

And jack.

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?

I think she was trying to show the kind of stuff that passes for "debate" when we don't deal in facts.....when we say stuff like "There's PLENTY of information out there"....when we accuse the opposite postion of having their head in the sand or of being purposely obtuse....stuff like that.

Do I believe Obama is a natural - born citizen? Yes. Do I believe Bush "stole" his election? No.

In the age of Bush = Satan, if anybody had any hint of illegality, every single news organization in the world would be blasting it 24/7. I get that you think it's a conspiracy thing, but honestly....do you think a secret that big could be buried?

I think she was trying to show the kind of stuff that passes for "debate" when we don't deal in facts.....when we say stuff like "There's PLENTY of information out there"....when we accuse the opposite postion of having their head in the sand or of being purposely obtuse....stuff like that.

Do I believe Obama is a natural - born citizen? Yes. Do I believe Bush "stole" his election? No.

In the age of Bush = Satan, if anybody had any hint of illegality, every single news organization in the world would be blasting it 24/7. I get that you think it's a conspiracy thing, but honestly....do you think a secret that big could be buried?

Give Plain a cee-gar. He gets it.

Beth, you crack me up. Let's have a glass of wine sometime.

plain gets what?

plain, the information about the illegal things that went on in the first election were all over the news 24/7 and are still being discussed. I can't imagine that you said what you did about it. That fisco was the furthest thing from a "conspiricy theory". Just because you didn't experience it, didn't read about it and KNOW the truth from your own experience, doesn't mean it didn't happen and that it is a "theory."

You people really ARE good at trying to re-write history. Amazing, simply amazing.

Please do go have some more wine and pickle your brains further.

The fact that the left-wing media ran with a BS story does not make it fact, BJean.

Left wing media had nothing at all to do with what happened that election night. It was reported everywhere. Except perhaps that Fox News might have done everything in their power to use smoke and mirrors to make their viewers think it was simply a "conspiracy theory." Suckers.

Ya just keep tossing FOX out there, don'tcha? Funny, it's the ONLY one you seem to have issues with. Why? Because you know all the others are left-wing numbnuts.

And for the umpteenth time, I don't have cable so I'm not "brainwashed" by FOX as you are by all the left-wing media. Talk about suckas! :purplebananna: