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The dreaded 47 percent

According to some sources, as many as 47 percent of American households will pay no federal income tax this year.

A recent encounter involved a conversation with a person who was at Defcon 5 concerning this report. That person was aghast, fueled by a cable news slant on reports that were issued in 2009, based on statistics compiled, in some cases, several years before that. For many commentators, the topic has become the new, hyper-charged issue now that healthcare has seemingly passed its prime.

Once the political veneer is stripped away, this tax situation sheds light on a problem that is particularly pertinent here in Pagosa Country. But, it is not the problem on which the above-mentioned person was fixated.

According to him, the core horror reflected by the statistic is that “fifty-three percent of us pay for all the rest. That’s socialism.” Attempts to guide the conversation to the true problem at the heart of the matter were useless.

Yes, if the stats are correct, 53 percent of American households will pay the nation’s income tax (ad valorem taxes continue to be shared by all who make purchases). But, is “socialism” the real concern?

We believe this statistic shows something much more alarming about the state of the nation — it reveals a situation that, left untended, will provide the fertile ground for a genuine, and massive change in the American way of life — a change already happening.

The alleged 47 percent of households that will not pay income tax this year, for the most part, do not comprise freeloaders or welfare state parasites eager to take an unpaid ride on the government bus. They are, rather, people out of work or working for less than in the past, seniors on fixed incomes, single parents raising families. Some are louts, yes, but not most.

The worrisome truth is that as many as 47 percent of American households do not meet the income requirements that require them to pay the tax. This does not mean people want to be poor; there is no joy in not having sufficient funds to get by.

The statistic, if true, represents what many of us have known for quite a while: The middle class in America is shrinking; a far greater percentage of the nation’s wealth is increasingly concentrated in a small percentage of the population. The gap between the “haves” and the “have nots” is growing wider. Whether this is by design, or not, cannot be determined. What is certain is that the situation creates a perilous economic and social climate.

If anything will lead to the dreaded “socialism” and “communism” loudly trumpeted by the fright-mongers, it is this gap and the stresses and tensions it produces.

At the same time, where is the horror when statistics concerning corporate income tax payments are studied? No problems here, eh?

A recent Supreme Court decision determined that corporations have the same status as individual citizens when it comes to contributions to political campaigns. Why not make it clear the privilege extends to the payment of income taxes as well? If the corporation shows profit, that’s income. Policies allowing an American corporation to shelter profits offshore and avoid the U.S. tax burden should be examined, and corrected.

Here in Pagosa this year, there will be many households that do not pay federal income tax. Many local workers are without jobs, many are underemployed. The trick to moving more people on to the tax roles here is to provide jobs, to bolster small business, to stimulate business relocation, to conceive of innovative ways to broaden and strengthen the local economic base. The creation of a Community Development Corporation and the impending selection of an executive director should be a step in the right direction.

Granted, it’s not socialism, but it could shrink our share of the 47 percent.