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71 million households or 47% will pay no tax

What is your reaction to these numbers? In 2009, roughly 47% of households or 71 million will owe not federal tax, according the Tax Policy Center.

Previous estimates were for 36% to pay no tax, but with the stimulus incentives passed by Congress, the numbers are getting larger.

The vast majority of households making less that $30,000 fall into this category, as do nearly 50% of households making between $30,000 and $40,000 per year.

Continue reading 71 million households or 47% will pay no tax

Is infrastructure investment good for the U.S. economy?

New York Times columnist Thomas Friedman, who perhaps most-accurately conceptualized the revolutionary production shifts implied by globalization in The World Is Flat, has a 'radical' economic prescription for the United States, as it moves toward the second decade in what is quickly becoming the century of change.

Friedman suggests that the United States try nation-building....at home.

Moreover, Friedman makes the case for nation-building as good for U.S. business - - a much-needed shot-in-the-arm for the U.S. economy.

U.S.: inadequate infrastructures for a major power


Friedman's main concern: the U.S.'s inadequate infrastructure (electric grid, roads/bridges/rail network, air travel system, hospitals, among others), which is antiquated compared to the infrastructure of the U.S.'s chief economic rival, China. Friedman has just attended the 2008 Olympics in Beijing and its clear China's public investments - - better airports, roads, parks, to go along with the sports venues - - have impressed him.

It's also clear to Friedman that the U.S.'s period of underinvestment is holding the nation back economically, and that has to change if the U.S. expects to remain commercially competitive on the global stage. Economist David H. Wang told BloggingStocks he agrees, for the most part, with Friedman's analysis, but adds that the journey to a better infrastructure is not a strictly an economic equation.

Continue reading Is infrastructure investment good for the U.S. economy?

Is the U.S. ready for a flat tax?

The rage about the U.S. federal government adopting a "flat tax" system continues on this year, even as the 2006 federal tax fling deadline is now behind us. If you've been involved in your tax filing in the last decade, you probably know how complicated and arcane filing federal taxes can be. For many of us, software products like H&R Block's TaxCut or Intuit's TurboTax makes the process much less painful. For others, a trip to the overworked accountant is generally in order. Very few (I believe) attack their own taxes single-handedly. Maybe if you are an IRS auditor you feel comfortable doing this. I won't even touch corporate taxation here.

Growing economies may even need to look at a flat tax structure according to the CATO Institute. This seems appropriately timed I think. But, it would take (and is taking, probably) an army of Ph.D. economists to make a case for or against the transition to a flat tax in the U.S. After all, those pork barrel projects, wars, social programs and other live and die on the backs of federally-collected taxes, right? Any hiccup that would harm the revenue planning of the U.S. federal government just won't cut it. But is a flat tax fair to everyone?

Would the U.S. see problems with citizens being taxed on consumption and at the same marginal tax rate? There are some the believe that expansion and general economic development of Eastern Europe (former Soviet Union areas) is being assisted greatly by the adoption of a flat tax. While it's hard to compare an advanced economy like the U.S. has to parts of Eastern Europe, an adoption of the flat tax is still being considered by many in power these days (along with being popular in many circles). Will the U.S. see it some year soon? Let's get out our crystal balls, shall we?

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Last updated: November 27, 2009: 08:06 AM

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