A Quote by John Cornyn
Why is it that half of the households in America pay zero income tax? We need some real tax reform.
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The most pernicious of his [Obama] proposals will be the massive Make Work Pay refundable tax credit. Dressed up as a tax cut, it will be a national welfare program, guaranteeing a majority of American households an annual check to 'refund' taxes they never paid. And it will eliminate the need for about 20% of American households to pay income taxes, lifting the proportion that need not do so to a majority of the voting population.
If you look at the performance of the zero-income-tax-rate states and the highest-income-tax-rate states, I believe a large amount of their difference is due to taxes. Not only is it true of the last decade, but I took these numbers back 50 years. And, there's not one year in the last 50 where the zero-income-tax-rate states have not outperformed the highest-income-tax-rate states.
There are people who enjoy the life in England but don't pay a penny in tax, whereas my footballers pay more than half their income in tax.
Let's take the nine states that have no income tax and compare them with the nine states with the highest income tax rates in the nation. If you look at the economic metrics over the last decade for both groups, the zero-income-tax-rate states outperform the highest-income-tax-rate states by a fairly sizable amount.
If I'm owed money, but I say, 'Don't pay me, pay my cousin. Don't pay me, pay my charity,' you can do that, but then the IRS requires that you pay income tax on that. It's your income if you earned it and you directed where it went. If you exercised control over where the money went, you have to pay income tax on that.
Millions and millions of people don't pay an income tax, because they don't earn enough to pay on one, but you pay a land tax whether it ever did or ever will earn you a penny. You should pay on things that you buy outside of bare necessities. I think this sales tax is the best tax we have had in years.
I think we should have basically the same tax policy that Germany, Japan, the U.K., everybody else has, which is a tax rate in the mid-20s and no loopholes. Zero. The U.S. has the most antiquated tax system. And that means some people are going to pay more taxes, and some people are going to pay less.
The billionaires pay an effective tax rate lower than nurses or truck drivers. That makes no sense at all. There has to be real tax reform, and the wealthiest and large corporations will pay.
We need real tax reform which makes the rich and profitable corporations begin to pay their fair share of taxes. We need a tax system which is fair and progressive. Children should not go hungry in this country while profitable corporations and the wealthy avoid their tax responsibilities by stashing their money in the Cayman Islands.
The zero-income-tax-rate states have far faster growth in tax revenues than did the states with highest income tax rate over this period.
Tax reform for the 21st century means rewarding hardworking families by closing unfair loopholes, lowering tax rates across the board, and simplifying the tax code dramatically. It demands reducing the tax burden on American businesses of all sizes so they can keep more of their income to invest in our communities.
I support both a Fair Tax and a Flat Tax plan that would dramatically streamline the tax system. A Fair Tax would replace all federal taxes on personal and corporate income with a single national tax on retail sales, while a Flat Tax would apply the same tax rate to all income with few if any deductions or exemptions.
It makes no difference to a widow with her savings in a 5 percent passbook account whether she pays 100 percent income tax on her interest income during a period of zero inflation or pays no income tax during years of 5 percent inflation. Either way, she is 'taxed' in a manner that leaves her no real income whatsoever. Any money she spends comes right out of capital. She would find outrageous a 100 percent income tax but doesn't seem to notice that 5 percent inflation is the economic equivalent.
Now, the president would like to do tax reform, which would obviously lower rates for most people in America and make the tax code fair and get rid of loopholes and special treatment. But absent tax reform, the president believes the right way to get our fiscal house in order is ask the wealthy to pay their fair share.
There are many people who think we should have zero tax on capital gains, interest and dividends for everybody, as - the very, very wealthy. But recognize that means that Bill Gates and Warren Buffett would pay no income tax at all. And some people say, 'Well, that's a good thing for growth of the economy.'
When you say the tax system benefits the rich, there are a lot of people who respond, "That can't be true, look at the rate of tax. The people who are rich pay a higher rate than you or I." Well, yeah, but if you don't have to pay taxes on a lot of your income, then your real tax rate is a lot lower. And if you're allowed to pay your taxes thirty years from now instead of today then you're a lot better off. People need to have a sophisticated understanding of how the system works to appreciate that the posted tax rate really has very little to do with the taxes people pay.
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