Jeff Bezos pointed out that the U.S. tax system is already progressive, meaning that the top wage earners pay more as a percentage of their income than low wage earners. The top 1% pay about 40% of all federal income tax. The bottom 50% pay roughly 3%. He says that we could make our system even more progressive by zeroing out the bottom 50%.
That makes sense to me. I have said that those at or below the poverty level shouldn’t be paying any federal income tax. Bezos is just taking it a step further. Those in the bottom 50% of wage earners shouldn’t be paying any income tax.
Many people claim the billionaires don’t pay enough. While continuing to harp on that claim, they fail to point out a simple way to help people who are at the bottom half of the economic ladder: STOP TAXING THEM!
Detractors of that idea will use the tax tables to say that they are only paying 10% on income up to $11,925 and 12% on income between $11,925 and $48,475. That is $5578.38 for people making the top of that bracket. That’s only $15.28 per day. That’s no big deal. Really? That’s enough for a used car payment. Or a couple of months rent. That could really be helpful.
The next bracket is 22% on income between $48,475 and $103,350. The tax on an income of $75,000 would be $11,413.66. Bezos said that a nurse in Queens making $75,000 shouldn’t be paying $12,000 in taxes. If my math is correct, he rounded up. I agree with him. However the median income for U.S. individuals was $45,140 in 2024. I haven’t seen more recent numbers I would trust. Perhaps the nurse should be paying something, even if the standard deduction was $45,140.
How do we best help those in the bottom half of the income bracket? Many will propose federal programs funded by taxing the wealthy. A problem with that approach is the overhead involved. Many people will be making $100,000 or more annually to implement the program. That is money that doesn’t help anyone except the person receiving the check.
Of course, we also must consider fraud. I’d like to believe that only those who really needed help would benefit. I’m not that naive. Fraud is a reality.
However, a very clean and no cost way to help is to stop taxing them. That would mean instant pay increases for everyone who needs it.
Before we worry about taxing the wealthy for new federal programs, WE MUST STOP TAXING the poor and lower middle class.