But when almost half (and depending on how you calculate it, or at least if the trend continues) possibly over half don't have to pay that seem rather problematic in the context of the existence of a large middle class (so its not like your not taxing people because they are poor), and more importantly in the context of high rates for the wealthy and massive government spending.
It seems strange indeed, and a dangerous trend. I'm not necessarily trying to defend it, though, but I can think of two possible reasons (they certainly apply here in the UK, not so sure about the US):
- a substantial shift to indirect taxes, principally sales taxes (here including VAT, fuel tax, 'sin' taxes such as alcohol & tobacco, etc). Largely though not entirely pushed by the RW, to cut headline tax. These taxes tend to be far less progressive - the rich earn more in greater proportion than they spend more, and are also far more prone to saving and to spending overseas - so would probably account for much of the 'missing' taxation on the poorer 50%.
- increasing inequality in earnings meaning that the median moves further and further behind the mean wage. Hence taxation aimed at the mean will actually miss an increasing portion of the population. Again, such inequality is greatest in the UK and US (though I think Mexico topped a table posted somewhere today), with wealthy children most likely to have come from wealthy families, and the Nordic countries were the most egalitarian and the most likely to show successive generations bettering themselves. |
