LEARN THE TAX CODE.
Let’s face it: Nothing gets Americans fired up like taxes—except maybe the nagging suspicion that the richest among us aren’t playing by the same rules. Every April, we roll up our sleeves, pop some ibuprofen, and dive into receipts while billionaires seem to find clever ways to avoid paying their “fair share.” But what’s fact, what’s fiction, and what do the comments really get right (or wrong) about our tax system?
Let’s break down some of the common arguments and arm you with real facts—because if there’s one thing more powerful than anger, it’s understanding the tax code yourself.
1. “It’s called income tax, not worth tax.”
That’s correct—the U.S. taxes income, not total wealth. This is why someone like Warren Buffett, whose net worth is mostly in stocks, may pay a lower tax rate on realized gains than a middle-class worker pays on a W-2 salary. There is no “billionaire tax” on their entire net worth—only on what they actually sell or earn.
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2. “It’s knowing what they are doing with my money, for me.”
A totally fair frustration! Once your taxes are paid, the federal government spends your money on a wide array of things—including defense, Social Security, Medicare, interest on national debt, and many, many government programs. Want a breakdown? Check out the official numbers.
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3. “Rich and poor are the same. They get theirs off the backs of us who actually go to work.”
This one’s partially true, partially myth. Yes, everyone tries to minimize taxes, but the wealthy have access to better accountants, lawyers, and lobbyists who write loopholes—think “carried interest” and offshore shell corporations. The average person can’t take advantage of these strategies, so the playing field isn’t level.
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4. “I think they pay their fair share but how about IRS employees that don’t pay theirs! That should be of more concern because it’s real and not media propaganda.”
The IRS does have issues with some of its own employees failing to pay taxes (as does every large organization). But the IRS does track this and has discipline in place. However, the scale of this is minuscule compared to the billions in legal tax avoidance by major corporations and billionaires.
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5. “The top 50% pay 97% of the taxes!”
This is a favorite talking point—and it’s technically true, but it’s also misleading. The top 50% earn the vast majority of income, so naturally they pay most of the income tax. But the top 1% owns more wealth than the entire bottom 90% combined (Federal Reserve, 2023). They’re not paying more out of generosity—they’re paying more because they own and earn more.
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6. “Low income people don’t pay anything. They get money back!”
Partially true. Many low-income workers receive credits like the Earned Income Tax Credit (EITC), which can result in a refund. But they still pay payroll taxes (Social Security, Medicare) and sales taxes, which eat up a bigger chunk of their income than for the wealthy. If you count all taxes, the U.S. system is less progressive than it seems.
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7. “Instead of blaming billionaires for exploiting the system, eliminate the system. Everyone uses tax breaks. Go for a flat or consumption tax.”
This is a hot debate:
- A flat tax sounds fair, but it tends to shift the burden onto lower and middle income earners while letting the richest off easier.
- A consumption tax (like a national sales tax) also hits the poor harder, because they spend more of their income on essentials.
Every system has winners and losers—what we have now is a patchwork of loopholes, credits, and deductions that only the truly wealthy can fully exploit.
Reference:
- Tax Policy Center: Flat Tax vs. Progressive Tax
- Brookings: The Pros and Cons of a National Sales Tax
8. “What about all these crypto/forex guru comments?”
These are mostly scam bots and fake testimonials. No real financial expert will DM you for crypto investments or offer overnight riches. The IRS is also very interested in crypto gains and requires you to report them—no loopholes there!
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So What’s the Truth?
Yes, billionaires pay taxes—but they pay less, on average, as a percent of their wealth than you do.
- They use legal strategies like “buy, borrow, die,” real estate depreciation, and offshore entities to minimize what counts as income.
- Many Fortune 500 companies have years where they pay $0 in federal income tax.
- Most Americans do take every deduction they can, but the average person’s options are tiny compared to the billionaire toolbox.
If this feels unfair—it’s because the system was built that way. Want change? Learn the tax code, get involved, and push for reform.
Resources to Learn More
- ProPublica: How the Ultrawealthy Avoid Taxes
- Robert Reich: The Truth About Taxes (YouTube)
- Tax Foundation: Taxes and the Rich
- IRS: Understanding Taxes
- ITEP: Fairness Matters in State Tax Systems
Bottom line:
Filing taxes is exhausting—but it’s nothing compared to fighting a system that was designed to benefit the few. Educate yourself, advocate for change, and don’t fall for the noise (or the crypto comment bots).
The more you know, the less tiring it feels—until next April, at least.
If you found this helpful, share it! Have a tax myth you want busted? Drop it in the comments. Let’s learn the tax code—together.
A.L. Childers
Published Author, Advocate, and Your Partner in Thyroid Health
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