The Problem with Taxes and the "Fair Tax"

That's what's great about the rich daddy. You don't have to be the best.

Thanks, but I prefer to get advice from folks I find trustworthy.

 

Iriemon, and almost every accounting of total taxes paid by Americans show a total tax rate easily over 50%.

Of course that includes sales tax, local real estate taxes and state and city income taxes among other usually unseen taxes like gas taxes and esoteric stuff like registration taxes, water taxes, hotel taxes, air taxes(jk) but there are ALOT of stuff we get taxed on every day which we might not realize or want to realize.

 

We could probably fix some of that by capping deductions more firmly.

 

*shrugs* Well, we'll see if that translates into smaller government in legislation.

A lot of so-called small government Tea Party types definitely aren't small government when it comes to war and drug policy.

 

What are you referring to? Are you in jail or answering from some lock up facility with internet access? Just wondering how you didn't comprehend my post which you quoted? No problem, good luck to you and to your dependents................................

Okay.... sorry you don't think I would give your kids good advice.
Makes me wonder about you if you think that about me just because we might disagree politically? That is just sorry... and now we know we can't trust you even when you agree with us.

If you change your mind or if one of your kids changes theirs, I have a boocoo of great help to give them to get into the college they might want at as little cost as possible.

Good luck to you and yours!!!

 

The progressive tax system is not the reason people paying $30k pay no taxes. That is the result of the childcare deductions and refundable credits.

 

I have already debunked the idea of a "Fair Tax" twice in this Forum. The basic idea sounds great but it would never ever work in practice. Its net effect would be to move taxes from the rich to the poor and from the wealthier middle class to the poorer middle class. Since the Great Divergence which started in 1979 has seen the rising gap in real wealth inequality in the USA, this suggestion goes precisely opposite from what is really needed.

 

I'm not actually talking about them they're neocons in different suits, by and large.

 

2007 per CBO.gov data:

Category - % paid by top 10% - Revenues - Paid by top 10%
Income taxes... 72.7% 1,163 845.8
SS taxes.......... 25.6% 869.6 222.6
Excise............. 20.7% 65.1 13.5
Estate............. 100% 26.0 26.0

Total taxes paid by top 10%: 1,108.0
Total revenues: 2,567.7
Percentage of total revenues paid by top 10%: 43%.

Meanwhile, the top 10% took 40.9% of the nation's total income.

So what we are seeing, after years of "trickle down" policies favoring the rich, is that as a group, they barely pay more in overall taxes than what they take in income. A tax system that is basically flat for the richest 10%.

Source data:
http://cbo.gov/publication/42911
http://www.cbo.gov/sites/default/files/cbofiles/attachments/43373-Supplemental_Tables_Final.xls

The chart shows that percentage of taxes paid by the top 10% in a revenue category, total revenues for that category, then the amount of revenues paid by the top 10% per category.

As the data proves, the assertion that "The top 10% pays 90% of the taxes" which has been often repeated by our conservative friends (though Phoebe is not) is simply propaganda. The actual rate is about half that, as I stated.

Now we shall see what kind of evidence merc posts to support his claim.

Or maybe we won't.

 

Rich spend much less of their income on consumption than poor people.

 

I presented it more as a starting point of conversation because I see the extreme wealthy getting away with enough deductions and loopholes to pay virtually nothing, an agitated lower middle class seeing the difference of $1k between not paying and paying, and a class war on the horizon.

Those making between $100k and $700k are not "rich" (although those over half a mil are almost there) but represent the upper middle class the upper 10% of people paying the majority of our tax. These are the would be entrepreneurs stifled by Big Business and crippled by taxes. They are spending less than ever and they need to be set free.

How do we do that?

Let us be honest. Big Business will not bring back jobs from China. We cannot ever compete with $00.85 an hour as far as labor costs nor their 15 hour work day. So we need to focus on the upper middle class and provide some sense of security of finance so they will start business and spend more.

What is your idea?

 

Thanks. But I asked you to back up your assertion. Not just spout what you may have seen in the right wing propaganda.

 

What do you mean by entitlement spending? Like social security, food stamps or welfare? Because I believe these are necessary because I don't want poor people and old people dying. Though you might be referring to something else.

 

Simple. Elect people who will remove that loopholes, deductions, and restore the tax code to where it was before Bush took office. Or better yet, before the Republicans took Congress in 1995.

If you like the status quo and want more tax loopholes and privileges for the uber rich, continue to elect those who have sworn allegiance to Grover Norquist to never raise them.

 

I don't think that is good enough. Between federal, state, and local you still only have at best half your paycheck. I just don't see this as a fair system.

 

I don't think that is good enough. Between federal, state, and local you still only have at best half your paycheck. I just don't see this as a fair system.

 

I've heard this "1/2 a paycheck" claim over and over. But every time I ask, no one can substantiate it.

So I'll ask you. Please explain how you pay 1/2 your paycheck.

 

In the mid 1940's the Federal Reserve people told Congress that taxes are not needed to fund the government. It can all be handled through the sovereign credit of the United States.

While it is easy to blame Congress for choosing war and taxes, we have to really blame the US people who prefer lies, war and taxes.

America could have created Heaven on Earth, but we chose to make hell on Earth. We could be the most beautiful and prestigious people, instead we chose to be ugly, hoodwinked, shamed and collectively insane.

 

Well, I use "paycheck" loosely. How about half of what I make? I pay income tax at the 1% bracket which is between 33% and 35% each year. State tax rates is at 7.85%. I also would have to pay a property tax that makes the mortgage income tax deduction not worth it should I purchase real estate. I'll leave off sales, gas, etc. and my licensing fees. I'm still at about 45% of what I earn gone to programs over half of which I disagree with.

 

I gotta say, there are a whole lotta people who think making $700k would be pretty (*)(*)(*)(*) rich, or $500k, or $259k, or even $100k. With a median houseld income of about $60k, meaning half make less than that, scores of millions think $100k would be pretty rich indeed.

 

Compare it to people making 2 million a year and more. Would "less rich" sound better?

 

First of all, if you are in the 33% or 35% tax bracket, you are making at least $178,650 AGI if you are single, or $388,350 to get to be in the 35% tax bracket. In which case you are not middle class. If you are married or head of household, you are making even more than that.

Second, those are marginal rates. That 33-35% is not taxed on every dollar you make, but only on rates marginally above the incomes I cited above. You are still only paying 10% on the first 17k, 15% on the next 53k, 25% on the next $72k etc.

And then you don't pay these tax rates on *all* your income. You only pay them on your Adjusted Gross Income. Which means the standard deduction, personal exemption, deductions for kids, and 401k savings are out. If you own a home your interest payments are out, as are a whole host of other deductions.

So the income you actually pay that tax on is somewhat, and might be a lot less, than your total income.

And then there are special lower rates for investment income, so if your income is largely from investments (like Mitt Romney) you only pay a top marginal rate of 15%.

All of which means the actual amount of your paycheck taken out by federal taxes is probably closer to the 20% range than 35% range even if you are in those income ranges.

Same applies for state income taxes.

After paying federal and state taxes, you are a long way from being out 50% of your income in taxes, and while there are other taxes, they aren't going to get you anywhere near 50%.

 

People who make $2 million or more aren't average but in the top fractions of one percent.

Sure you can always make a relative assessment. But when we talk about "middle class" we aren't talking about folks making millions a year.

 

You honestly believe that what's fair is for the poor to be poorer and the rich to be richer? Yes, I think that would be a difficult sell.

 

We can line by line it down, certainly, but the general point is the same and that is that by the end of the year an overly-significant portion of what I make goes to a government that does not know how to contain itself or to efficiently run the programs that it has either adopted or pushed on the American populace.

I didn't inherit money. I had zero help outside of scholarships. I am where I am today because I studied hard, had no social life, held my tongue when I wanted to call people (*)(*)(*)(*)ers, fought harder than my male colleagues, etc. Why shouldn't I want to see the fruits of my labor?