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The problem with tax reform is that it would slaughter too many people's and organizations' sacred cows. How do you think the tax code got that big and convoluted in first place?
If you find paying tax is stressful, you are not along. We need a simplify the tax code. Why do we need a tax professional just to pay the tax?
On PBS this morning, a person making $274K {only $66K pay} was taxed at 14% and had deductions. Compared to another person who earned $84K {pay}, he was taxed at 18%, he had no deductions, and was not eligible to take any.
On PBS this morning, a person making $274K {only $66K pay} was taxed at 14% and had deductions. Compared to another person who earned $84K {pay}, he was taxed at 18%, he had no deductions, and was not eligible to take any.
Is this fair?
This is not an issue about fairness. It's about complexity of the tax code.
For the person making $274k, I bet most income are either from passive (capital gain, rental, royalty, etc). Passive incomes require a person to sacrifice first, like you have to SAVE first before spending. Unfortunate, most people do exactly the opposite. They spend first, not only they spend their income, they go into debt and then blame the people who save for their failure.
I agree completely. Maybe we need to show this to people going into college and advise them to become tax accountants!
Regardless of the change, moving to a clean starting point would do wonders.
Quote:
Originally Posted by NoJiveMan
On PBS this morning, a person making $274K {only $66K pay} was taxed at 14% and had deductions. Compared to another person who earned $84K {pay}, he was taxed at 18%, he had no deductions, and was not eligible to take any.
Is this fair?
And because I can't resist...Instead of going off of two specific individuals, let's look at national statistics. The lower/middle class pays dramatically less in taxes than the average wealthy person. If someone makes $84k and pays 18%, then that person needs to hire a new accountant.
This is not an issue about fairness. It's about complexity of the tax code.
For the person making $274k, I bet most income are either from passive (capital gain, rental, royalty, etc). Passive incomes require a person to sacrifice first, like you have to SAVE first before spending. Unfortunate, most people do exactly the opposite. They spend first, not only they spend their income, they go into debt and then blame the people who save for their failure.
The problem I see is the one making $274K had a higher pay intake than the other, but was still taxed at a lower rate. The person earning a loer amount of pay was taxed higher.
and yes, the person making the $274K had capital gains, etc..
I'm making it an issue about "fairness".
Quote:
Originally Posted by hnsq
I agree completely. Maybe we need to show this to people going into college and advise them to become tax accountants!
Regardless of the change, moving to a clean starting point would do wonders.
And because I can't resist...Instead of going off of two specific individuals, let's look at national statistics. The lower/middle class pays dramatically less in taxes than the average wealthy person. If someone makes $84k and pays 18%, then that person needs to hire a new accountant.
I can't resist either, the person making $84K has no deductions, he owns no home, he has no children, he has no investments for a capital gains deduction, he has nothing the one making $274K a year does.
New accountant? I doubt it.
The problem I see is the one making $274K had a higher pay intake than the other, but was still taxed at a lower rate. The person earning a loer amount of pay was taxed higher.
and yes, the person making the $274K had capital gains, etc..
I'm making it an issue about "fairness".
I can't resist either, the person making $84K has no deductions, he owns no home, he has no children, he has no investments for a capital gains deduction, he has nothing the one making $274K a year does.
New accountant? I doubt it.
Listen, if he is making 84k and have no investment, then there is a problem. I am making less than 84k and can afford a home, then he should have an home plus a rental. How did I do it? I save for many years. I live with my parents until I can afford my own place. I didn't own a car until my 2nd child. I only buy what necessities. I get free coffee at the office instead of starbucks, etc.
Listen, if he is making 84k and have no investment, then there is a problem. I am making less than 84k and can afford a home, then he should have an home plus a rental. How did I do it? I save for many years. I live with my parents until I can afford my own place. I didn't own a car until my 2nd child. I only buy what necessities. I get free coffee at the office instead of starbucks, etc.
I think it depends on where a person chooses to live too. A person making only $84K a year out east, as NYC, isn't going to see their pay go very far at all.
$84K a year in the Chicago area is a drop in the bucket by modern day standards too. Rent, food, transportation and everyday living expenses are greater too than let's say a person living in Louisville, KY or cities in Missouri, Oklahoma, and so forth.
But some people end up where ever they can find good steady employment opportunities. My spouse's grandparents moved 17 times in their life times seeking employment.
I agree completely. Maybe we need to show this to people going into college and advise them to become tax accountants!
Regardless of the change, moving to a clean starting point would do wonders.
And because I can't resist...Instead of going off of two specific individuals, let's look at national statistics. The lower/middle class pays dramatically less in taxes than the average wealthy person. If someone makes $84k and pays 18%, then that person needs to hire a new accountant.
That chart isn't exactly accurate on the high end because you have the super rich mooching off the lesser rich to make it look like they pay a higher rate. Basically if you are lesser rich chances are a lot of that is earned income and if you are super rich chances are a lot of that is carried interest, dividends or capital gains. In fact, if you are wealthy enough and singleminded in not paying taxes it is very possible to have an income of 1,000,000+ and 0 federal tax liability.
When you break the 1,000,000+ category down more you start to see a steady decline the further up you go.
Last edited by Randomstudent; 01-14-2013 at 03:55 PM..
I think it depends on where a person chooses to live too. A person making only $84K a year out east, as NYC, isn't going to see their pay go very far at all.
$84K a year in the Chicago area is a drop in the bucket by modern day standards too. Rent, food, transportation and everyday living expenses are greater too than let's say a person living in Louisville, KY or cities in Missouri, Oklahoma, and so forth.
But some people end up where ever they can find good steady employment opportunities. My spouse's grandparents moved 17 times in their life times seeking employment.
I lived in NYC all my lif. If a person cannot survive with 63k (18% + 7.65 fica) net income, he has a problem.
Anyway, the thread complexity of the tax code. I person think the whole tax code need to be trashed and replace with a consumption tax. Not 30%, not 20%, but single digits like 4 to 7%. 1% goes to the federal, 2% go to the state, 4% go to local county/town.
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