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Can someone explain to me why someone making 250k a year think that have anything in common with someone who makes 250mil year? Better yet why do people who earn 40k on their jobs defend multi-millionaires? Multi-millionaires have armies of accountants to look for any and every tax loop hole that the average american only dreams about.
There is a persistent fiction in this country that even if you are dirt poor, someday you, too, might become a multimillionaire.
As the fallacy of this fantasy becomes more evident, state lotteries prop up the concept.
Better luck next time ace. The government and banksters love you. You're a docile serf!
Docile serf living well off a modest amount of money and putting away for his future, or bitter angry guy who hates the man and spends everything he makes because he thinks a nice apartment, eating out, and blowing money on bars/clubs on the weekends will make him happy.
Hmm. Where do I sign up for the docile serf line again?
The Brookings Instituted, which is about as far left as you can get, is about as credible as a dead shellfish.
Quote:
Originally Posted by jimhcom
Of all Federal revenue 45% is derived from income tax, 55% from payroll and other taxes paid by EVERYONE.
That's an excellent example of Brookings-Speak.
Everyone pays the same percentage for FICA/Medicare, but benefit disbursement is disproportionate.
The maximum benefit one can receive is $2391.50, but someone else can pay in 1/3 less and get $1,177 per month.
It claims that 45% of federal revenues are derived from income tax, but it doesn't say who pays those taxes.
Quote:
Originally Posted by jimhcom
Of all State revenues on average 18% is derived from income tax, and the remainder from sales and other taxes paid by EVERYONE.
The top percentage do not pay 50% of the debt/taxes.
That would be an erroneously conclusion, because they facts you presented from the Brookings idiots do not support such a conclusion.
Quote:
Originally Posted by Philip T
Jim just called you wrong on this just one post above?
Once you count all the taxes and all the people, of course the masses pay the most.
No, they don't. As I've proven before, they pay no taxes. With the Earned Income Credit not only do they pay no federal taxes, but the taxpayers actually pay them with a gift of money.
Someone with an adjusted gross income of $17,000 (that means they've already taken exemptions and deductions) and one child pays $0 in federal taxes and the taxpayers give them a cash gift of $2,865.
Assuming the entire $17,000 is 100% disposable and assuming every single thing they purchase is taxable at a rate 5.5% Sales Tax they would have paid $935 in Sales Taxes.
The taxpayer gift of $2,864 would negate their Sales Taxes.
The city earnings tax workers pay here is 2.1% of income (and not refundable) so that would be $357 on $17,000
$935 + $357 = $1,292
Plus the generous gift from taxpayers of $2,865 - $1,292 = a surplus of
$1,573
So....the story so far is that the poor pay ZERO TAXES OF ANY KIND and that would be about 47% of taxpayers who qualify for the EIC.
Even if they drive and paid State and federal excise tax on gasoline, that $1,573 would buy 312 tax-free gallons of gasoline per month, which is about 78 gallons per week.
Quote:
Originally Posted by freemkt
I propose a flat tax on all disposable income.
How can any reasonable conservative oppose a flat tax on all disposable income?
Because it is manifestly unfair.
Who is "richer" or "wealthier" the person in Los Angeles earning $50,000 per year, or the person in Cincinnati earning $25,000 per year?
Like most people on this forum, you look at the numbers and say $50,000 is more than $25,000 so the person in Los Angeles is wealthier.
You'd be wrong. $25,000 in Cincinnati equals $60,000 in Los Angeles.
Why? Cost of living.
A federal sales tax would be fair to all. It encourages saving, since you're not taxed on income, but rather what you spend. Unfortunately, saving is anathema to your economy, since you live in a consumer economy and even that wouldn't be so bad except that you have a consumer service economy instead of a consumer product economy.
2% per year for 7 years until the VAT reaches 14%. That gives 7 years for tax attorneys, tax accounts and other leaches to transition to a new job skill, and the IRS can be reduced by attrition and the remaining employees transferred or terminated.
Shrinking your government at both the federal and State levels is the only way the States and federal government will ever be able to approach anything even remotely resembling a balanced budget, so the sooner you start doing that, the better off you'll be in the long term.
Unfortunately, income taxes and a tax bureaucracy with the power to penalize and imprison is one of the things governments use to maintain control over the population, so they aren't going to give it up with a fight.
Quote:
Originally Posted by freemkt
Currently, a childless worker with a full time minimum wage job pays federal income taxes and payroll taxes. If these people are not paying enough tax for you, how much tax do you propose they pay?
You're wrong. See my previous evidence demonstrating that not only would such a person pay ZERO TAXES AT ANY LEVEL they would actually get a free gift of tax payer money.
Currently, a childless worker with a full time minimum wage job pays federal income taxes and payroll taxes. If these people are not paying enough tax for you, how much tax do you propose they pay?
Someone earning the Federal Minimum Wage working 40 hours a week, 52 weeks a year, and with no special deductions, credits, or exemptions would pay $173 federal income tax. When/if the universal "Making Work Pay" credit is gone, the same person would pay $573. I would suggest that everyone's taxes have a floor of 5% of their gross income. No matter what deductions and credits you have, you must pay at least 5%. That would be $754 for the minimum wage example. For the bottom 15 or 20% of society that will still be nothing because they live on non-taxable subsidies. For those in the 20th-50th percentiles it will be an adjustment. I would advocate a gradual ramp-up so the adjustment won't be excessively abrupt.
Why do I advocate this? Because I believe that every earner's gotta have some skin in the game; enough skin in to give a crap what the federal government does with OUR tax money. Right now we're dangerously close to a situation where the voting majority has no vested interest in federal spending (outside of social security and medicare) because it doesn't directly cost them anything.
Conversely, we need to flatten the top out too. The uber-wealthy, whose primary sources of income are capital gains and dividends, are paying less than half the marginal rate of many high-income employees and small business owner who earn considerably less. We need to re-think what "long term" capital gains are incentive-worthy. I can't for the life of me understand why if you buy an existing share of stock in a company, hold it for 366 days, then sell it at a profit it somehow benefits society so much we should reduce the tax burden by half or more. Can't we somehow differentiate between gains from speculating on the future value of existing assets and gains from true "new capital" investments? If we're concerned about the rich all paying their fair share, the answer is not a higher marginal rate. In fact, we should LOWER the top marginal rate substantially, while phasing out most deductions and credits and taxing capital gains on existing assets as ordinary income. Dividends should be taxed as regular income too, but the reciprocal is that there should be no corporate income tax.
As for SS and Medicare taxes, those are insurance programs. Most everyone puts in, most everyone gets something out of it. We all still have an obligation to pay for actual government functions.
Docile serf living well off a modest amount of money and putting away for his future, or bitter angry guy who hates the man and spends everything he makes because he thinks a nice apartment, eating out, and blowing money on bars/clubs on the weekends will make him happy.
Hmm. Where do I sign up for the docile serf line again?
Takes money to be a docile serf. I live on a poverty level income and I'm a bitter angry guy...and I *don't* think a nice apartment, eating out, and blowing money on bars/clubs (none of which I can afford, anyway) will make me happy.
So I'm in neither of the two positions you describe.
If I run a 2-man truck hauling operation (which I do), and earn $120K, and DW works in an office making say, $60K, that is a combined income of $180K. Getting awfully close to the 'golden' $200K there! We pay a TON of taxes! Forget the taxes - we pay a TON to our accountant just to prepare the taxes!
So...are we "rich" or not??? Would you have the IRS tax us even more? Are we in Warren Buffet's class? Somehow it is difficult for me to wrap my mind around the fact that the lowest 47% income group gets money BACK from the IRS, after having paid NO tax. Which bright light bulb figured that one out? If they owe no taxes, fine...but don't give 'em a refund on top of that!!!
You happen to fall into the group that gets slammed the hardest. You pay a ton of taxes because you earn money the peon way...by working for it. On the one hand there just isn't a lot of money to be gleaned by the bottom 47%. They make 30K and often have dependants so they often avoid income tax . On the other hand people who are really rich earn their money through capital gains. They simply live off interest and investment. These people tend to be the very rich who can make serious money off stuff like dividends. Their tax rate is very low, because that is how the Republicans set it up.
Here are marginal tax rates on earned income for married folks (the peon tax rate)
This is why you get squeezed...its not because you are "rich" its because you work for a living. Republican tax rates really only help you if you earn your money off your money.
There is a persistent fiction in this country that even if you are dirt poor, someday you, too, might become a multimillionaire.
Yeah, it's hardly worth trying to get there. You might only get half way and end up upper-middle class. Or a third of the way and end up solidly middle class. No, best to throw up your hands and capitulate to perpetual poverty if you can't be guaranteed the ultimate outcome.
The Brookings Instituted, which is about as far left as you can get, is about as credible as a dead shellfish.
If you want to dispute the figures, I will be glad to look at any other figures you supply, but to say the figures are incorrect because you do not agree with the political views of the supplier is not a valid argument. It is simply political rhetoric.
Quote:
Originally Posted by Mircea
Everyone pays the same percentage for FICA/Medicare, but benefit disbursement is disproportionate.
Actually they don't. The wealthy have a cap that ensures they pay a lower portion of their income.
Quote:
Originally Posted by Mircea
The maximum benefit one can receive is $2391.50, but someone else can pay in 1/3 less and get $1,177 per month.
Ummm... If you read what you just wrote, you said someone can pay 1/3 less and receive 49% less in benefits.....
Quote:
Originally Posted by Mircea
It claims that 45% of federal revenues are derived from income tax, but it doesn't say who pays those taxes.
The point is, 55% (the majority) of the federal revenues are derived from taxes other than income tax. Who are paid by everyone.
Quote:
Originally Posted by Mircea
No, they don't. As I've proven before, they pay no taxes. With the Earned Income Credit not only do they pay no federal taxes, but the taxpayers actually pay them with a gift of money.
You really need to think this one through. You are only viewing this on a very superficial level and not taking into consideration how taxes are structured, hidden, and not recognized.
Take the payroll taxes, Social Security, Medicare, Unemployment, etc. Most people say that much of those taxes are born by the employer, but in reality those costs are taken into consideration when the employer is figuring employee compensation.
So tell me who is really paying the employers part of those taxes? The working stiff who is receiving lower wages to compensate for the "employers share" of his payroll deductions.
The same can be said for the people who argue that renters pay no property tax. I had rental properties for years and I can tell you property taxes are figured into calculations of rents prominently.
Now take the wealthy who receive the majority of their pay in stock options and lucrative benefits.
They pay regular rates on the "salary portion" of their compensation which is usually a very small percentage of their overall compensation.
They pay 15% on the stock options, (deferred) which is the majority of their pay and 0% on the benefits.
Now take corporations into the equation, the large ones base themselves offshore and pay single digit tax rates. That is the ones who pay at all, many just refuse to pay and then cut a deal for "corporate amnesty".
Quote:
Originally Posted by Mircea
A federal sales tax would be fair to all. It encourages saving, since you're not taxed on income, but rather what you spend. Unfortunately, saving is anathema to your economy, since you live in a consumer economy and even that wouldn't be so bad except that you have a consumer service economy instead of a consumer product economy.
This is the most sensible thing you have said, and I agree with you 100%, but it is not going to happen.
Not because it would not be the best thing for the country, but because it would be detrimental to the wealthy.
It is the wealthy and corporations who have paid to have the current tax codes written the way they are, and they are not going to support a tax system that puts them on a level playing field with the common person.
There is a reason why the rich are getting richer, and the middle class is disappearing,
There is a persistent fiction in this country that even if you are dirt poor, someday you, too, might become a multimillionaire.
As the fallacy of this fantasy becomes more evident, state lotteries prop up the concept.
It feeds into the tax system, since the wealthy do not play the lottery and the poor (most of them) do not have the financial knowledge to build off of it, so many of them end up further in debt than when they started
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