Which taxes are the fairest?
A recent letter argued that eliminating the earned income tax and increasing real estate tax to offset the loss would be fairer for taxpayers. My question is, “fairer” for whom?
Since there were some terms recklessly thrown about in that letter, let’s start by defining a few of those terms. A progressive tax is one that the tax rate — the percentage of the thing being taxed — increases as the value of the thing being taxed increases. A flat tax is a tax that the rate or percentage of the thing being taxed stays the same, even as the value of the thing being taxed goes up. The writer claims that Pennsylvania has several regressive taxes. But for a tax to be regressive, the percentage of the thing being taxed would have to go down as the value of the thing being taxed goes up. All of the examples used in that letter referred to as regressive are, in fact, flat taxes. At one point the letter states that “the flat rate PA personal income and sales tax are examples of regressive taxes.” How can a tax be both flat and regressive at the same time? He states that this income tax is “regressive” because the burden falls mainly on lower- and middle-income taxpayers. What is he talking about — 3 percent of a $30,000 income is $900 and 3 percent of a $90,000 income is $2,700, so who shares the larger burden?
It could even be argued that the state income tax is progressive because of the PA Tax Forgiveness Program for lower-income households that, according to the Department of Revenue’s website, nearly one in five households qualify for.
He states that the “regressive” earned income tax is levied only on the “working class,” as if people who make higher incomes don’t pay it. Of course, they do, and they pay a lot more because their incomes are higher.
Now as for property taxes, they are not even close to being progressive, as the writer seems to think. The rate is flat, i.e. the same rate is applied to all properties, and the only reason more valuable properties are taxed higher is because there is more to tax. How is that any fairer than flat-rate income taxes?
The plain fact is, in my opinion, if the fairest taxes are those based on ability to pay, which he says he advocates for, then the income tax is fairer than real estate taxes. How can you argue that one who makes $90,000 doesn’t have a greater ability to pay than the one who makes $30,000? But just because someone lives in a $150,000 home doesn’t mean that they have a greater ability to pay than someone who lives in a $75,000 home. How about the couple who’ve worked hard all their lives so that they could have a nice home to spend their golden years in but are living on Social Security checks? Should they be forced to sell their home and live who knows where so that people who want everything for free can cannibalize their house?
How about the guy living in government-subsidized housing, getting every government benefit he can get, and thinks is due him, and making $30,000 a year? Should he not have to pay his fair share?
How about the two families who live in the same town, bringing in exactly the same income. One lives in a $300,000 home and a puts the lions share of their time and money into their home, making it an asset to the neighborhood. The other lives in an $80,000 home and chooses to put little into their home because they would rather take long vacations and eat out every night. What gives you the right to reward the latter and punish the former through the tax system?
The writer should look up the definition of “fair.” Like the words, “progressive,” “flat,” and “regressive,” he’s not using them correctly.
When he says “fair,” I believe what he really means to say is what is most advantageous to him.
Submitted via Virtual Newsroom