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Yeah -- -- didn't say that relate but -- concern about the roughly half of all American households pay no federal income taxes.
Is spreading to institutions like the Tax Foundation which just issued a report.
On the deeper consequences of this trend according of that report quote the concerning yeah.
That what people perceive the cost of government to be cheaper than -- really is.
They're gonna demand ever more government benefits because they either don't feel the cost directly or they think that others will be paying those -- with us now.
Is David Williams he's one of the authors of -- taxpayers' protection a wise and Curtis debate senior tax policy analyst at The Heritage Foundation will McBride.
He is one of the co authors of that report well I'm gonna go to you first I'm guessing it.
That it makes it easier for politicians to propose stuff that can't be paid for -- when when folks don't feel the cost of -- because they're not paying -- and.
That's correct that's the end that these so called -- -- 7% or roughly half the population that does not pay any federal income tax.
And so that -- costs it.
Of the basic that's the basic cost of government.
Which is funded through the personal income tax is the largest source of revenue for the federal government.
So it's very simple if you went into.
Wal-Mart they said hey guess what everything's free today.
Well what happened you would suddenly have a much bigger appetite for -- -- artist -- So this -- become a major driver behind the unsustainable growth -- particularly entitlement spending.
But we -- actually there's a a very strong statistical connection between these two things well.
David Williams of course even -- half the country may not be paying -- in terms of their income tax.
Eventually is Maggie -- -- -- run out of other people's money so you were close to running out of other people's money.
So it's gonna hit the fan no matter what happens whether half the country feels that are not.
Well absolutely and we see the debt ceiling -- be increased.
In December or January.
And then the fact of the matter is that you know a lot of people don't trust the government to spend their money so they look for ways not to pay whether it's income tax or other taxes so.
This is just sort of rational behavior.
By people is that when they see they sixteen trillion dollar debt and ridiculous projects being funded they say wait a second.
You know there's a way that I don't have to pay taxes and send my money you know -- -- wanna find that way.
Curtis the top 10% of murders in this country.
Of all the income tax that that's simply not sustainable.
And and we've gotten as much out of them as -- and yet.
How in the lord's name are we gonna eventually pay for all -- Well -- get spending down there's no doubt about it spending is growing rapidly in the last couple years and it will continue spending rapidly.
It's ridiculous to get more people bought into you reduce this as a government.
This all -- about the 47% who don't pay -- comes down to the growing dependency when you have half people not paying for.
National defense Homeland Security.
Welfare food and drug.
National parks they have no incentive to say no -- people here watch -- wanna expand spending on those issues.
Bigger government means more dependency our index of government dependency shows that more people are coming on a patent.
We come to depend on the government that's bad for the nations' -- -- -- is bad for individuals because dependency erodes your dignity.
And David the fact is is that when you when you focus all of that income collection that income tax collection on such a small percentage of the population.
10% paying for 71% you wonder whether income tax itself is just becoming a wealth tax and we tried wealth taxes before and they don't work.
Well we've tried wealth taxes before.
And they're talking about wealth taxes again to increase the burden.
On on the media -- -- -- my point is it's already a wealth tax when you have 10%.
Of our population -- 71% of the income tax.
It is a well tax it is attacks specifically focus on the top.
And it's -- pure redistribution I mean that's -- we have in this country Israel redistribution from the top.
Down to the bottom and the other points that were made -- are are are right on because we have the growing dependency we have through stands at an increased.
If for 32 million people to 46 million households now over the last 45 years so he had had gentleman from -- was actually right it's a culture of growing dependency.
All right so well McBride what do we do.
Well I think it's it's clear thinking here in our study.
One key element required to get us back into.
Sort of they have a sustainable.
Balance of government spending and revenue that is close the deficit.
We have to get the consumer if you will the voter.
Engaged in the process they feel the cost of these programs that means.
-- broadening the tax base that means making the tax code less progressive.
And shifting some of that tax burden.
Down the income scale David a sounds -- sounds like -- Simpson deserts of -- let me just get rid of all of these tax credits all these tax deductions for everybody along the line.
Lower tax rates -- get closer to a flat rate.
Write that I one can't -- out here is I don't wanna see taxes increased.
On the on the middle class or -- the lower middle class I think.
That could be a problem if we see this tax increases so.
While I agree in principle.
What we might see is really -- may be detrimental to the economy.
David Williams -- -- -- William McBride thank you gentlemen appreciate it.
Thank you list.