Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The linked article is hidden behind the WSJ paywall. However, the article is discussed here by Michael Tennant on thenewamerican.com.
The issue with the WSJ article is that follow the conservative propaganda that only income taxes matter, while ignoring all other taxes. Per Michael Tennant:
Quote:
Adding payroll taxes to income taxes, therefore, naturally increases lower-income Americans’ share of federal taxes paid and decreases higher-income Americans’ share. In fact, including payroll taxes lifts the bottom 40 percent of earners out of the red; they now contribute almost five percent of all taxes. The top quintile, meanwhile, goes from paying 84 percent of all taxes to kicking in “only” 67 percent — still significantly higher than their share of national income (51.3 percent).
So the lower income earners aren't "freeloaders", they're actually paying federal taxes. In addition to payroll taxes, Summers is also ignoring the other taxes at the federal, state, and local levels. Taking all taxes into account, the total tax burden looks like this:
Now a true conservative might look at this chart and exclaim that the bottom 60% are still not paying enough!
The flaw with that observation is that in our progressive tax system, we expect those with more disposable income to pay more in taxes: someone who makes $30K per year is paying nearly all of their income on food, clothing, and shelter, but someone who makes $300K per year is paying only a fraction of their income on such items. Those who make more money are able to shoulder the tax burden better than those whose income is only just enough to get by.
The linked article is hidden behind the WSJ paywall. However, the article is discussed here by Michael Tennant on thenewamerican.com.
The issue with the WSJ article is that follow the conservative propaganda that only income taxes matter, while ignoring all other taxes. Per Michael Tennant:
So the lower income earners aren't "freeloaders", they're actually paying federal taxes. In addition to payroll taxes, Summers is also ignoring the other taxes at the federal, state, and local levels. Taking all taxes into account, the total tax burden looks like this:
Now a true conservative might look at this chart and exclaim that the bottom 60% are still not paying enough!
The flaw with that observation is that in our progressive tax system, we expect those with more disposable income to pay more in taxes: someone who makes $30K per year is paying nearly all of their income on food, clothing, and shelter, but someone who makes $300K per year is paying only a fraction of their income on such items. Those who make more money are able to shoulder the tax burden better than those whose income is only just enough to get by.
True, but it is the lower earning rate payers most likely to need and who benefit most from Medicare and Social Security (funded by payroll taxes).
As current system stands Social Security payments are weighted to give lower income persons more for their contributions than those at the higher end.
So in theory the "poor" or whatever you want to call them are paying decent amounts in total federal taxes, they also need and benefit from them the most.
"Fair tax"?? As Knight Kiplinger once wrote, the only fair tax is the tax someone else is paying.
This.
Define fair.
Requiring those who make more money to contribute more to the running of the government isn't "fair" by any definition of the word. Even a flat (percentage) tax is unfair to higher income taxpayers. However, practically speaking, it's probably a necessary evil. The word "fair" should never be used in the context of a tax discussion.
True, but it is the lower earning rate payers most likely to need and who benefit most from Medicare and Social Security (funded by payroll taxes).
As current system stands Social Security payments are weighted to give lower income persons more for their contributions than those at the higher end.
So in theory the "poor" or whatever you want to call them are paying decent amounts in total federal taxes, they also need and benefit from them the most.
Weighted payments are useless to low earners who have shorter longevity and lower marriage rates than the rest of us; those who don't make it to retirement age get no retirement benefits.
Not long ago some conservatives were discussing how black men get a particularly poor deal from Social Security due to their shorter life expectancy.
Requiring those who make more money to contribute more to the running of the government isn't "fair" by any definition of the word. Even a flat (percentage) tax is unfair to higher income taxpayers. However, practically speaking, it's probably a necessary evil. The word "fair" should never be used in the context of a tax discussion.
"Marginal utility" is the term by which some assert it is fair.
Weighted payments are useless to low earners who have shorter longevity and lower marriage rates than the rest of us; those who don't make it to retirement age get no retirement benefits.
Not long ago some conservatives were discussing how black men get a particularly poor deal from Social Security due to their shorter life expectancy.
I have some news for you. Social Security is actually built around the concept that not everyone is going to live to be old enough to collect their benefits. If everyone did collect benefits at some point than taxes would have to be much higher. I have several friends who died in the last couple of years in their mid-fifties. They were not poor. They will not be drawing benefits.
Low earning people may--on the average--have shorter life spans than those with higher incomes do. However, many people with low earnings do live long enough to collect Social Security. Geography plays a role too. A poor man living in Minnesota, Wisconsin, or Vermont may have a longer life expectancy than someone in the upper middle class who lives in Mississippi or Alabama. One big reason many low income die at younger ages has to do with the choice to smoke tobacco. Rates of smoking are higher among the working class and those with less education.
In the end, we can't have a Social Security system that provides for every conceivable deviation from the averages because it would be hopelessly complicated and unaffordable. All we can do is set up a system that is straightforward and based on averages. Than the details of that system will hopefully become common knowledge. Perhaps, not being able to collect benefits until a certain age is an incentive to some groups to curtail risky behavior like smoking and excessive alcohol consumption.
With respect to the OP's topic about enactment of a "fair tax", I submit there is no such a thing. There are simply taxes that benefit one group more than another group. Frankly, I get tired of the whole topic of tax reform. IMO, its simply a pseudonym for changing taxes to be "the way that I want them".
The idea funding the size of government we have in the USA purely through a national sales tax is a joke. Perhaps, the size of government should be reduced, but that is a topic that should be spoken independently of taxation. We should first agree on how large a government we want. Than, we use the taxation mechanism to pay for that government.
Perhaps, all of us would benefit the most if we just left the existing tax structure entirely alone for a few years.
This lifecycle of homeownership has important consequences when examining other differences between homeowners and renters. For example, because homeowners as a group tend to be older, they also have higher incomes. The data reveal that the median household income of renters was $31,888 in 2012, compared to $65,514 for homeowners. A considerable part of this income difference is due to age.
We've already seen - the post you quoted - that Zillow says renters spend 30.2% of income on housing and homeowners spend about 15%.
$31,888 * .302 = $9,630
$65,514 * .15 = $9,827
Pretty close, and the numbers fluctuate from year to year.
And the average homeowner enjoys LAND plus considerably more interior space than do renters, so the homeowner's dollar provides greater value than does the renter's dollar.
So you've been proven wrong, and decide to move the goalpost?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
