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The problem with this country's tax code is that it's out of date and unrealistic. To qualify as being poor in some state one has to file income below $25k, which is absurd because people who make that much might as well just not work and collect welfare. Today, if you make below $40k for a family then you are poor but you can't qualify for many of the tax rebates and assistances!!
You have too many people that make more than the state/fed assistance limit, so all they can do is work for cash so they can cheat the system.
The tax code does not address qualifications for public assistance.
Or states could reduce spending and reduce tax breaks. Homeowners in Michigan get a billion-dollar tax break simply by owning their home. Is this a great country or what?
However most of the ideas for this from the right or even far right want to get rid of the IRS and make it no credit, they just give you a preemptive rebate or prebate. This is what is considered the Fair Tax, a dollar inclusive sales tax proposal on goods and services at 23 cents on the dollar included in the price to replace all income and payroll taxes. The good news is you get a prebate of $209 per person in your family each month. The downside is there is no exception to goods so long as they are new are taxed no matter if it is needs like food, clothing and medicine OR DVDs, TVs and new houses, as well as everyone including the rich get the prebate and a tax cut whether it is given back to the community or not.
Sounds like a good idea, replace most federal withholding, no paperwork, the IRS is off your back, taxes decrease if you make more than an effective 23%. But here's the issue. The budget will need to be cut drastically. Now instead of having specific taxes for social security and medicare, they come out of the general fund as does the prebate. A family of four has $10k in prebate every year no matter if they are rich or poor and that comes from somewhere, your neighbor's taxes. If you and your spouse make 90,000 a year with a family of 4 spending 80% of your income, you effectively pay for your neighbor with a family of 4 with your $16.5K tax liability, leaving 6.5K for everything else that your taxes paid for before as well as what was covered in payroll taxes.
I created an Excel Table, and added it as an attachment to show you. You can play around with it but remember, your taxes may increase (especially on the lower end) but only to cover your neighbors. This don't fix spending problems, this just creates problem bringing in tax revenue to cover spending.
I'm not opposed to the Fair Tax in theory, but IMO it will never happen.
The old cliche about the Golden Rule ("He who has the gold makes the rules") is alive and well in the US tax system. The whole system is Of, By, and For the rich. Tax rates for the very wealthy have plummeted in the last decade, yet we continually hear how the wealthy are being "taxed to death".
What were the tax rates on the rich a decade ago, and what are they now? By how much have they "plummeted?"
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I recall reading a story several years ago where Warren Buffett was talking about how much higher the tax rate was for his $40k earning secretary than it was for himself, and how ridiculous it was.
Do you have link that supports that $40,000 number, That is very different that what is commonly reported.
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Since then, it's just become more ridiculous. I'd love to pay that 16%-ish rate that the top 400 pay.
You pay the exact same rate on the same type and quantity of income as every other person in this country. If you either don't believe or understand that, you don't really understand how our tax system works.
What were the tax rates on the rich a decade ago, and what are they now? By how much have they "plummeted?"
Do you have link that supports that $40,000 number, That is very different that what is commonly reported.
You pay the exact same rate on the same type and quantity of income as every other person in this country. If you either don't believe or understand that, you don't really understand how our tax system works.
and there are the operative words.... the system is rigged so that different types of income are taxed differently.... allowing someone with the means to earn that kind of income a way to pay lower or no taxes on it..... where the person whose income comes solely from the sweat of his or her brow pays the full rate on ALL of his or her income.....
all thanks to the legislators bought and paid for by those who can afford them.....
and there are the operative words.... the system is rigged so that different types of income are taxed differently.... allowing someone with the means to earn that kind of income a way to pay lower or no taxes on it..... where the person whose income comes solely from the sweat of his or her brow pays the full rate on ALL of his or her income.....
all thanks to the legislators bought and paid for by those who can afford them.....
In other words, don't miss the forest for the trees.
and there are the operative words.... the system is rigged so that different types of income are taxed differently.... allowing someone with the means to earn that kind of income a way to pay lower or no taxes on it..... where the person whose income comes solely from the sweat of his or her brow pays the full rate on ALL of his or her income.....
all thanks to the legislators bought and paid for by those who can afford them.....
The poster he was responding to was talking of wishing he could pay 16%. My wife and I made in excess of 200k last year or normal income nothing special in terms of tax treatment and our effective federal rate is less than 14%
Political reality is stopping them from doing so now. Repealing the billion-dollar tax break for homeowners would be political suicide for legislators.
Nah. Some people prefer to rent. Commercial real estate is more lucrative than residential real estate anyway.
Very few people prefer to rent for an entire lifetime. Approx 85 percent of baby boomers have bought a home at some point in their lives.
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