Sen.Cruz and others propose change to tax law

[Monahorns]

18% of GDP from all sources of taxation. Not just income tax.

 

[Mr. Deez]

That's reasonable, but right now even the 7.5% (or 15% if they venture into entrepreneurship) is nigh crippling - and it's rough on the lower end of the middle class too, for that matter. Although part of that issue is other government policies that drive up housing costs and insurance costs, property taxes, sales taxes, etc.

I recognize that. As I mentioned, I'd get rid of that tax. However, many would also point out that they get much and sometimes all of the FICA taxes refunded through the EIC. I don't bring that up, because the EIC doesn't benefit the poor very much. They get the check, but the employer reaps the benefit by paying them garbage wages that they'd otherwise be unable to pay.

 

[Mr. Deez]

It's curious that other taxes like sales tax, licensing fees, etc. are left out when claiming the poor don't pay any taxes. Focusing only on federal income tax for the poor is akin to focusing on the budget deficit and neglecting entitlement programs in the discussion.

I left those out because we were talking about federal taxes. These are state and local taxes, and things are different at the state and local levels. The poor pay quite a bit at those levels. They pay sales taxes and indirectly pay property taxes, and in states like Texas where property taxes are ridiculously high, that can be pretty substantial.