People get so extreme on the concept of taxation-- believing that ANY tax cut is beautiful, and ANY tax increse is satan spawn. In order to for our country to exist as we know it, some sort of taxation needs to happen, the issue becomes to some extent HOW MUCH, but also just HOW --- in the most economically efficient and socially optimal manner.
Yes, the bottom 50% of the population only provide about 3.3% of the fedral income tax receipts, of course the also only receive abut 12% of the income--- I don't think its that unreasonable that the people with very little income actually pay a smaller proportionate share..... furtheremore, that is just FEDERAL INCOME taxes, when you add in payroll taxes (that disappear above something like $90k) and sales taxes (which the poor pay a disporpotianatly HIGH share, because they generally don't have much left over for savings and consume almost all of their income) the bottom 50% pays a higher share (but still les than their % of income).
Efficiency of taxation has two main aspects, in my opinion. First you want to minimize the friction it places on efficient markets (you want to continue to encourage entrepeneurialship) but second you want to increase social mobility. If we truly do have a society that encourages individual achievement (and THAT is where economic growth for ALL comes from), then we should have a society that allows bright industrious people to move up the income chain, and daft lazy people to move down it.
THere is lots of attention these days to the incentive compatability of assistance to the poor-- and there SHOULD be. Assistance is supposed to be a safety net, not a permanent feeding tube to let you sit on your ass doing no good for yourself or anyone else. BUT what about the incentive compatability of wealth maintenance?
Through a series of odd quirks, while not rich myself I live in a very rich area ("GOPtopia, according to the "new republic"
http://www.tnr.com/user/nregi.mhtml?...=crowley091106) You meet people who are the 4th generation of the Dow familily, or just the kids of the guy that invented the old styrofoam bigmac holder, and they, well, don't do much. THey are set. Whatever entrepenuerial get-up-and-go ability they potentially had is largely disipated by a lack of need to bother. THere is a cost to this as well. America USED to be the most socially mobile society inthe history of the globe. Now we are less socially mobile that the majority of other OECD countries. THat is a huge loss.
Personally I think the US's tax structureis idiotic.
First, It taxes companies (corporations) WAY too much (both directly, and the implied taxation of exessive regulation and unfunded mandates) and taxes individuals too little--- ESPECIALLY inheritance taxes.
Second, Its also too damn complicated. THere are loopholes for everything. I thnk it should be a straight graduated tax rate (nearly a flat tax, but with gradations, but I think a very low rate for the everyone's first 20k or so is appropriate) with ZERO deductions, except for family (since income is then spread out across more indiciduals). If you want to have incentives (for charitable giving, or home ownership, or whateverthefuck) then make it a direct subsidy, so it has to actually be accounted for on the books... the number of THOSE that people will accept the legislature approving will be much lower. If there were fewer tax-breaks, then you wouldn't NEED much gradation. As it stands the very rich have the incentive to pay tax attorneys to squeeze the most out of all possible deductions and loopholes, but the middle class do not. Also , all the payroll taxes and whatnot should be absorbed into one efficient tax structure. Finally, there should be a much larger inheritance tax.
anyhoo, my rambling lunchtime ideas.