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Graduated Income Taxes Are Unfair and Under-Regulated

Welcome to the middle-class.  According to a Pew Research study 52% of Americans are now part of the middle-class.  It’s wonderful news until you think about all the expenses that come with that.  As this great news spreads across the political spectrum don’t think politicians aren’t already thinking of ways to tax your prosperity.  Two important aspects of the middle-class lifestyle that need to be included in any tax system are defining graduated income tax earnings and direct policy initiative surplus and taxing multiple jobs. If the tax is for all the people of the state, demographics are an important piece of the puzzle.     

Political pundits all agree graduated income taxes in 32 states are increasing their state coiffeurs but who is losing for this to occur?  We the People have spoken and insisted that the rich must pay more but we do too.  Under a graduated income tax, those making $100,000 and $250,000 a year pay $3500-$10,000 more in taxes.  Graduated income taxes should stipulate that if taxes decrease the amount of total income to under either of these structured incomes, then the taxes for the lower bracket of income are enforced.  That only seems fair. 

We must enforce through state ballot initiatives a zero-sum budget for our states.  We all know the more money a state receives, the more it spends on frivolous “needs”.  California’s graduated income tax is the highest at 13.3%.  What do the people receive in return?  Not as much as companies.  A study in California found sales taxes were returned to companies for having businesses within the state.  For example, if you buy something online in California the tax is distributed to the county where it was purchased.  That county has deals with companies that they can receive part of the sales tax back as an incentive-up to 45% for some business tax deals.   

Illinois will soon have a graduated income tax but where will it go?  Surplus taxes from any new tax increases must have a direct enterprise fund for specific policy initiatives.  Maybe, Illinois could use the graduated income tax to fund roads or increase education funding.  State politicians must be held to specific economic goals-it’s not spending money.  

Many of us have held a second job.  Sometimes, it’s just to save and shop for the holidays, other times it’s to shore up household expenses for a stay at home mom but some of us always have a second job.  The BLS claims 5% of Americans hold these but it has three different subsections to define second jobs.  As the gig economy booms, our taxes on extra income shouldn’t. If a second job helps us cross the threshold into the middle-class, it needs to be taxed as a separate income. A part-time job at $10,000 a year or even two part-time jobs needs to be taxed separately at the tax bracket of the state’s income tax.  This is especially important for graduated income tax states.  As an example, one person’s full-time job is $75,000 a year and their part-time is $25,000 a year.  Under Illinois’s graduated income tax, collectively this person would pay the second rate for their income, 4.9%.  If separately, then the full-time job is taxed at 4.90% and part-time at 4.75%.  If we want to help all Americans pull up their bootstraps, then dual working Americans should also receive a break. 

The old saying that the only things Americans have to do are pay taxes and die must change.  We must live fully prosperous lives that aren’t depleted by ramshackle tax structures.  If we the people don’t prosper neither will our states. 

*Image by Gerd Altmann from Pixabay.

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