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Old 07-15-2012, 01:04 PM
 
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I was having a discussion with a woman about taxes and the middle class. She states that it is far better to make less money with less taxes and get a tax refund. Her household makes 70k per year in Kentucky and states that, even with three dependents, she gets 20k -30k taken away in taxes and feels that a family making 35k/yr is in a better position than her family. I disagreed because the 35k a year family will still walk away with less than the 70k/yr family.

So all in all...is it better to make less and be taxed less or make more and be taxed more? Should there be a flat tax rate?
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Old 07-15-2012, 01:18 PM
 
28,393 posts, read 68,162,690 times
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This attitude does not surprise me at all. There are MANY people with a distinct "blind spot" when it comes to rationally looking at finances and especially taxes.

Fact is that the vast majority of people that get back a "tax refund" are simply having too much money taken out of their paychecks. Stupid. Adjust the withholding so you have more money to spend. I further suspect that any one that really believes they are having 30K out of 70K taken out as taxes has no clue as to either what they truly earn nor what they are supposed to pay in taxes.

As to the feeling that "people that make less are better off" this too is simply a massively faulty way of thinking.

Smartmoney.com has a decent calculator. It uses java -- Marginal Tax Rate Calculator - SmartMoney.com
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Old 07-15-2012, 03:04 PM
 
Location: Vallejo
13,485 posts, read 15,112,814 times
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Depends what you're giving up. If it's a choice between working 50 hours/week at $28 to make $40k net vs working 25 hours a week and netting $35,000 since the gubmint steps in with EIC and you don't pay any income tax... I'd rather work 25 fewer hours if the difference were just $5,000. That's not really realistic, more realistic would be netting $50k vs $30. Would you rather work twice as many hours for 2/3rds more pay?
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Old 07-15-2012, 05:03 PM
 
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If you can find a way to live on less that may be better But many took out huge mortgages due to "tax advantages" that turned out to be less than expected.
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Old 07-15-2012, 05:57 PM
 
Location: Vallejo
13,485 posts, read 15,112,814 times
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The tax advantages are still the same... they're just paying $400,000 for a house that's worth less than $200,000. Pretty damm expensive way to save yourself some taxes.
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Old 07-16-2012, 07:22 AM
 
2,401 posts, read 3,817,786 times
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Quote:
Originally Posted by TiltheEndofTime View Post
I was having a discussion with a woman about taxes and the middle class. She states that it is far better to make less money with less taxes and get a tax refund. Her household makes 70k per year in Kentucky and states that, even with three dependents, she gets 20k -30k taken away in taxes and feels that a family making 35k/yr is in a better position than her family. I disagreed because the 35k a year family will still walk away with less than the 70k/yr family.

So all in all...is it better to make less and be taxed less or make more and be taxed more? Should there be a flat tax rate?
Oh yeah...
And ever heard of some employees not wanting more hours so they do not have to go over that limit to continue getting certain government goodies (free government milk)???

Dealt with a ton of those "people"... now how's that for "quality" productive work?

Just encouraging "laziness" & "dependency" in people who should not be taking away work from another (more qualified through higher productivity) who is willing to work hard for their money & unafraid to put in the hours required by their company.

BUT..

Only in America...
In any other countries... like many SEAsian country like my own, Hong Kong & even China...
these people would have starved & never have / achieve anything.
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Old 07-16-2012, 11:30 AM
 
Location: Somewhere in northern Alabama
16,908 posts, read 51,505,945 times
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Quote:
Originally Posted by TiltheEndofTime View Post
I was having a discussion with a woman about taxes and the middle class. She states that it is far better to make less money with less taxes and get a tax refund. Her household makes 70k per year in Kentucky and states that, even with three dependents, she gets 20k -30k taken away in taxes and feels that a family making 35k/yr is in a better position than her family. I disagreed because the 35k a year family will still walk away with less than the 70k/yr family.

So all in all...is it better to make less and be taxed less or make more and be taxed more? Should there be a flat tax rate?
I'm quoting your original post to avoid the spin of subsequent posters.

If she gets $30K taken out, she has $40K. $40K is more than $35K pre-tax. So to directly answer your question, she has some faulty reasoning going on if all else is equal.

There is an underlying issue though. There was a period where I worked for an employer that demanded a lot. After a few 80 hour weeks, and my own evaluation of my performance showing that it wasn't effective, I flat out told my boss that above 55 hours per week he was losing more than gaining. He dropped my hours - and those of people in similar jobs to about that level. At the time, I had zero social life, and was just as happy working, so that was a fair assessment of the situation. If I had been involved in a family or had to take college courses or had other projects, that amount of work would have been excessive.

There IS a balance between time and money that is important. In some cases, a family earning $35K IS better off than one earning $70K - especially if the $70K family has fallen into the consumer trap or the "Better than the Jones" ego trap.

As for taxes, that is a whole separate issue. If your taxes support a great school for your kids, or create a great community for you, or protect you in ways you can't protect yourself, then there is value received. If you have more, the need for all of that is more. Personally, the idea of taxing individuals at all makes less sense to me than taxing based on tariffs, but I'm old school and not in favor of globalization.
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Old 07-16-2012, 11:49 AM
 
833 posts, read 1,420,557 times
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a few thoughts-------------the HR person where I used to work said he learned one thing in the many years he held that position.

He said the lesson was that the more desperate a person was for a job ( gotta feed the family, gonna lose my house, etc )...............the more loudly he complained when overtime work or overtime ( Saturday ) was posted.

He stated after 2 paychecks, the guy became the biggest whiner employed there.
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Old 07-16-2012, 11:52 AM
 
833 posts, read 1,420,557 times
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we also had a foreman ( he got a good wage and his wife was in a high paid profession ) who stated-----------" when I am complaining about the high income tax we pay, that means I'm sitting pretty damn good ! "

Lots of truith there !
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Old 07-16-2012, 02:58 PM
 
Location: Keosauqua, Iowa
8,881 posts, read 15,698,141 times
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If she's paying $20K+ in federal income tax on a $70K salary with three dependents she needs to find a new accountant.

Either that or she's just talking about payroll withholding and is leaving the big, fat refund check she probably gets each year out of the equation.
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