“Skin in the Game” : The Federal Tax System, Tax Reform and Poor Families
In recent years, it has been argued that the federal income tax system is flawed because a significant percentage of people do not have “skin in the game,” that is, they do not pay federal income taxes. It is true that a significant percentage of Americans do not pay federal income taxes, and that the percentage rose sharply, to slightly more than 50 percent, in 2008 and 2009 (but has fallen since). However, this does not necessarily reflect a flaw in the income tax system; instead, it can be seen as reflecting economic conditions, fundamental principles embedded in the income tax system, and a series of policy choices designed to help poor families improve their economic circumstances.
To make sure low-income families are not forgotten in the tax debates, the Foundation hosted in 2012, two panel discussions with some of the leading tax policy analysts and researchers in the country. A panel was held in Washington, D.C. in July and the other in New Mexico in October.
Here is the full transcript of the panel discussion in New Mexico on October 17.