[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.

Jack, you're a little different breed. You still have a slam dunk right wing outlook, but you at least try to appear to have given opposing viewpoints a little serious consideration. Mind you I'm not sure that you really have, but at least you are aware how of how your credibility suffers if you don't appear to be open to other ideas from time to time.

There's just no talking to some people. They know it all.

How well we know, BJean. We've been saying it about your kind for some time now. :frown:

Hee, hee, hee. I'm glad that you're keeping your delightful sense of humor, Jack. I know that for me, it isn't always easy.

You're right about Pelosi's senior moments of course. And I have to confess to a few of my own *she says in disgust*.

And I do know that the Democratic party has slid a little - particularly in opposition to the extreme sliding that the Republican party has done. However the Democratic party has always championed the little guy, the environment, education for our children, unemployment and all those things that the Republicans seem to think will take care of themselves. At least they have "always" had those concerns since I've been aware of Democratic platforms.

My parents were politically active in their community and my dad ran for public office on two occasions. He served in the state senate for a while and as a child of that household, I was exposed to a lot of politics in general. So I come by my "leanings" honestly (inherited/endoctrinated) and they are deeply ingrained in my soul.

As an adult under my own steam (located in a completely different State in fact), I also became involved directly in politics from time to time and nothing ever managed to sway me in the least to the other side - that of big business interests and the "no tax, no spend" theory and the "all government is bad" viewpoint. In fact, the more exposure I've had to the people on the other side of the fence, the more convinced I became that my parents were right.

As for today, I think we are suffering from the pendulum swing effect where over the past 15 years or so, the pendulum rose higher and higher on the right side. Now it is beginning to lower itself and we should probably get ready for a swing that goes too far to the left. I would be happy if someday I could actually live in a time when it settled in the middle and became as fair to everyone as possible.

In the meantime, I find it very unfair that President Obama is being called a socialist and other ridiculous things because if we have ever had a president who is actually more centered, I believe it is him. He has some serious work to do to get the pendulum drifting downward again, but I do not believe that he is the socialist that some like to accuse him of being. I think he is as conservative as a Democrat can be. In fact, due to my left leanings, some of his decisions scare me a little. But I have to admit that I believe that he is not a dishonest man and that he is going to ultimately be good for this country.

That is one reason why this particular thread is so annoying to me. The second being that what people here are suggesting as a solution to our fiscal problems has already been tried and shown that has never worked to the advantage of the average American. And the average American citizen is my concern. As a Democrat.

You, as opposed to me, are concentrated on a line by line criticism and dissection of every move every Democrat makes. I have to look at the bigger picture because I kow that the nitty gritty can make you crazy. I am already crazy enough for the both of us. So you keep up what you're doing and I will continue to be who I am. End of story, I think.

Takes one to know one, Beth.

That's silly of course, but your posts make me want to resort to playground tactics because they are so completely infantile. And I mean that in only the most complimentary way. :frown:

Takes one to know one, Beth.

That's silly of course, but your posts make me want to resort to playground tactics because they are so completely infantile. And I mean that in only the most complimentary way. :frown:

You mean I made ya do it? :thumbup:

So what is it, I have that much power or you have that little self control? :thumbup:

The list in post #123 is an example I'd like you to simply point out....WHERE is it wrong in assertion of facts relating to appointees? All those facts were in the news over a period of weeks, yet....lets pretend they don't mean anything, is that the game plan?

Apparently only for some on the left. If those things were listed about anybody on the right, you know dang well she would be all up in arms -- and THEN the printed word would be a viable source of information!

Duuudes, I can't tell you how many times I helpfully listed all of Bush's transgressions, in fact I even helped out by listing some of Bush I's, but you all booed and hissed and said I was all wet. Interesting how it feels when the shoe's on the other foot, eh?

Btw, I really didn't give a rat's patootie about Clinton's transgressions or who gave him a b.j., but when it came to involving an intern in the White House, even I had to draw the line. I will never forgive that rat for that. And I still don't feel too great about the little missus either.

As a side note, my feelings had nothing to do with the religious inappropriateness of Clinton's behavior, or the fact that he made a mockery of his wedding vows, it had to do with compromising the office of the president of the United States and the way it could have jepordized the safety of this country.

Duuudes, I can't tell you how many times I helpfully listed all of Bush's transgressions, in fact I even helped out by listing some of Bush I's, but you all booed and hissed and said I was all wet. Interesting how it feels when the shoe's on the other foot, eh?

I wasn't here then.

But again, it shows that even YOU hold dear to things you find in print -- but only if they are anti-Bush. And you say that we have issues looking at all the information presented us?? Hell, I was ALSO riding Bush for many of the decisions he made and things he did. Yet you apparently don't have the ability to speak TRUTH if that truth goes against your messiah. That's a true shame, and it shows your inability to see what's really going on.

Btw, I really didn't give a rat's patootie about Clinton's transgressions or who gave him a b.j., but when it came to involving an intern in the White House, even I had to draw the line. I will never forgive that rat for that. And I still don't feel too great about the little missus either.

As a side note, my feelings had nothing to do with the religious inappropriateness of Clinton's behavior, or the fact that he made a mockery of his wedding vows, it had to do with compromising the office of the president of the United States and the way it could have jepordized the safety of this country.

Fair enough.

We'll see. We'll see.

re: "we'll pay it off the same way we will pay off the astronomical debt of the Iraq war and the Bush administration debacle:

I'm all for getting this out in front of us: to date the Iraqi War has not cost as much as AIG all by itself was recently GIVEN just last month.

Now, let's all get credible.

THANK YOU, Jack! Omg, I missed this. I guess it's because I just can't stomach to thoroughly read a lot of what she says.

This guy spent more in the first 60 DAYS in office than ALL PRIOR PRESIDENTS did COMBINED. But I guess she would only read and utilize this information if Bush pulled the criminal antics that the Bama is.

I think he is as conservative as a Democrat can be.

What? Seriously? Because that would explain a LOT of your debating points to me.

Jack, how much money has been spent on the Iraq war to date?

Yup plain, that's right. Pretty obvious that our brains do not allow us all to perceive things in exactly the same way, eh?