The working poor pay more then twice as much in taxes as the rich (generations, brainwashing)
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Good try, no cigar, especially since the working poor qualify for the EITC.
BTW, with respect to that cap on wages subject to the SS tax....let's remember that the benefit is capped, too. If the policy is changed, and tax is ever imposed on an increased amount of earnings, the benefit should be, too.
I agree. I'm just correcting the false impression previously stated that payroll taxes were regressive. They are not. SS benefits are progressively structured so that lower income earners get a higher return on their SS taxes (ins. premiums) than everyone else. The SSA admits such. Medicare is progressive because some earners pay MUCH higher taxes (ins. premiums) than others, only to receive the exact same benefits as everyone else.
Bingo. A lot of people (incorrectly) think that Bob making 50k a year only gets 1/2 the retirement benefit of Pete making 100k a year. In reality, Bob probably get's closer to 3/4 of what Pete gets.
You are entirely correct about the medicare piece as well. I hit the SS pay cap every year and I will get the same medicare benefit that my cousin making 30k/year will get.
I have no beef with this. I just don't like people torturing numbers and pushing false information because they have some sort of agenda.
An honest discussion is IMO non-negotiable, I may not agree with someone on the topic but it helps no one to not have an honest base to the discussion.
I agree. I'm just correcting the false impression previously stated that payroll taxes were regressive. They are not.
SS benefits are progressively structured so that lower income earners get a higher return on their SS taxes (ins. premiums) than everyone else. The SSA admits such.
i generally agree that social security is progressive ... but in some cases it isn't.
one problem is that someone making $100,000 / year is having to give a larger % of their income to the poor than someone who is making $100 million / year (who can opt most income out).
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Medicare is progressive because some earners pay MUCH higher taxes (ins. premiums) than others, only to receive the exact same benefits as everyone else.
This isn't so simple, either. Only 13% of Medicare revenue comes from premiums. 38% comes from payroll taxes... and the other 40% comes from the general revenue fund. (which, since the general fund is supported by borrowing, basically means that Medicare cost overruns are funded directly by borrowing.)
i generally agree that social security is progressive ... but in some cases it isn't.
one problem is that someone making $100,000 / year is having to give a larger % of their income to the poor than someone who is making $100 million / year (who can opt most income out).
That's because the benefits are capped. Given what is paid, and the benefits received, SS is indeed progressive in all cases.
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This isn't so simple, either. Only 13% of Medicare revenue comes from premiums. 38% comes from payroll taxes... and the other 40% comes from the general revenue fund. (which, since the general fund is supported by borrowing, basically means that Medicare cost overruns are funded directly by borrowing.)
And who bears the brunt of those costs, while not getting anymore benefits than anyone else? Hint: it's NOT the middle class, which isn't even pulling their own weight, federal expense-wise.
When people say that the rich pay a far greater percent of their income in taxes, that is in the context of income taxes and proposals to change the income tax system so that the rich pay their fair share. The rich pay more than their fair share in income taxes. Other taxes are not levied on income, they are levied on sales, usage, etc. so I believe these should be counted as a percentage of what they are taxing rather than on income. However, considered as a percentage of income they are for the most part regressive, considering the average person's habits in each income bracket.
Flat income taxes by definition are proportional, seeing as every person pays the same percentage of their income; you could argue that the impact on the poor would be more severe given a proportional tax, but that's an argument for a progressive tax system where the poor pay a smaller percentage of their income. Anyway, if you pair a flat tax rate with exempting the first $25 000 or so from taxation, it renders that whole issue moot while adding very little complexity to the system. This is the opposite of the payroll tax system, which only taxes the first $110 000 or so. Both are proportional taxes on the income they are taxing, but on the whole the former is progressive and the latter is regressive.
That's why an EITC is needed, or an exemption.
The best bet is a flat tax with an EITC guarenteed to everyone (called the "negative income tax"). That is naturally progressive.
If move to implement 5% national consumption (sales) tax that can ease some of the income tax burden for folks as well. That's the best way to exempt essential purchases such as food and clothing. That is "most fair."
I live in New York.. where sales tax is very high (8.75% combined state and local), but there is no state sales tax on clothing, and absolutely no tax on food. New York's report card for fair taxation ranks extremely high (top 5 least regressive, according to ITEP).
Tax payer money is all BS. When the government bails out corporations or state / local governments, the money is printed. Taxpayers don't fund a cent of it. All government expenditures are printed money. Bailouts especially because that printed money ends up in bank vaults clearing up balance sheets that were left in the red. It has literally no effect on the money being circulated (or the taxpayers you claim it came from).
Really? Then what does the government do with all of the tax revenues if they print money to cover 100% of their spending?
Yup. It also depends on how you define what is a tax. As a prior poster went on at length about the eitc amounts and blah blah blah......Of course if we used 60% of income is lost in taxes, we would instantly blow mirceas whole argument out of the water. But hey details.
Too bad you cannot provide details for your fantasy hallucinations.
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Originally Posted by hoffdano
Why do you include the 6.3% paid by the employer? The taxpayer doesn't pay it.
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Originally Posted by greywar
Because its part of the compensation package. When the employer doesnt pay it, and instead you work on a contract then YOU pay the 12.6%. This isnt that complicated.
That's kind of quibbling.
Sometimes the distinction between tax-payers and consumers gets blurred.
The tax-payer per se doesn't pay it since it doesn't come out of the General Fund, but the consumer does.
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Originally Posted by InformedConsent
We need a flat tax so that everyone pays their fair share.
But you contradicted yourself.
If a Flat Tax is imposed by the pseudo-federal government, then everyone will not be paying their fair share. A Flat Tax would certainly be fair for people of the sprawling Empire of Iceland where the Cost-of-Living is the same for all 479,000 people, but not in the US where you have 1,539 separately functioning economies.
You could levy a different Flat Tax rate for each of 1,539 separate economies in the US, relative to the Cost-of-Living.
Or you could just levy the fairest tax of all, a Value Added Tax.
Imposting...
If a Flat Tax is imposed by the pseudo-federal government, then everyone will not be paying their fair share. A Flat Tax would certainly be fair for people of the sprawling Empire of Iceland where the Cost-of-Living is the same for all 479,000 people, but not in the US where you have 1,539 separately functioning economies.
What does cost of living have to do with one's share of federal government expenditures?
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