The Dirty Secret of How Income Taxes Really Work

For the sake of this argument, let's divide the population into three groups.  The first group consists of children, dependents, retirees, and those who manage to live off government handouts like disability, food stamps, etc.  This group does not earn enough income to contribute to income taxes. The second group consists of people with regular employment, either with employers or in their own businesses.  They earn enough income to pay taxes, but they generally compete for interchangeable jobs in a transparent, free job market.  As a result, individually, they do not have a lot of influence over the level of income their jobs generate.  Also, due to their large number, if they manage to increase income through collective bargaining, any increases are immediately absorbed by inflation in the prices of the goods and services they purchase from each other. The third group consists of people with a specialized skill or education.  These individuals...(Read Full Article)

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