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Marksmu

Tipping Point

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According to the Yahoo news story (http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1) almost half of America no longer pays anything at all in Taxes. Even worse "The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment"

It makes me sick to think the government is actually PAYING people our money without requiring them to do some kind of work for it. So my questions to everyone else here, are these:

1. Have we crossed the tipping point? Are there now more people riding the cart than helping to pull it? And why are so many riding?

2. What incentive do the these people who are actually making money for doing nothing, have to improve their position, when they will just have to work harder and pay taxes to get to the same place they are now?

Clearly the country is in dire straits - the Federal Deficit is skyrocketing and we have the new administration making even more unfunded promises and entitlements. Where is the money going to come from? We only have half of the US contributing, and that half is constantly being spoken down to by this president for having to much, and needing to pay more....Why should I continue to pay $450 in social security per month, when it is already guaranteed that when I am old enough to receive it, it wont even exist?

I bring the topic up again, because it is timely...with taxes due next week, how many people are truly fed up? How many people are looking at their tax return and actually seeing what they paid this year and wanting to break something? Turn on the TV and watch the news and all you see is people with their hands out, asking where is my free health care? Where is my new car voucher? Where is my new appliance voucher? It is sickening...half the country is officially now leaching off the other half, and all the President seems to wants to do is make them MORE dependent on the government, not less.

When is enough enough? I think we are reaching the tipping point...the point where the half who are actually doing something stand up and say - no, I'm just not going to do that. Where is the tipping point and how close are we?

Personally I think the tipping point is 2012. If there is not a new president and congress elected then, I feel alot of working people in this country will just say were not going to take it any longer.

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I'm not too mad because I know these people who aren't paying taxes own the corporations that generate jobs for us working folk.

The bottom 40% of earners own these corporations?

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1. Have we crossed the tipping point? Are there now more people riding the cart than helping to pull it? And why are so many riding?

2. What incentive do the these people who are actually making money for doing nothing, have to improve their position, when they will just have to work harder and pay taxes to get to the same place they are now?

Since no tax laws have changed recently, there are no new formulas allowing more people to avoid paying taxes. There are a couple of blatantly obvious reasons for this increasing percentage for those who are truly curious, as opposed to the self-centered and greedy. One, the number of wage earners has plummeted. In December 2009, the labor force was 137 million, exactly the same size as it was in January 2001, even though the US population has increased from 281 million to 309 million during that period. The adult population has increased by approximately 22 million. With so many more people not earning an income, the percentage of people not paying taxes on earned income naturally increases. Even someone as angry as yourself ought to be able to figure out that rising unemployment makes for fewer taxpayers.

Secondly, the earnings gap between the richest and poorest Americans is growing ever wider. The average wage indexed to inflation has actually been falling. This concentrates more wealth in the hands of fewer taxpayers. That group that actually HAS earnings will naturally pay more taxes than the growing group with little or no earnings. Most economists are alarmed at this phenomenon, as a growing class of poor people do not have money to eat, provide shelter, see a doctor or contribute to the economy in any way, much less pay taxes on their meager or non-wages. Yet, some like yourself appear angry at the poor for being poor.

There may indeed be a tipping point. However, it will not be the point at which the pampered elites rebel at paying taxes. Instead, it will be the day when the poor rebel against a system that allows so few to amass so much wealth on the backs of so many. A quick glance through history reveals that there has never been a revolt by the rich, but many revolts by the poor.

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Personally I think the tipping point is 2012. If there is not a new president and congress elected then, I feel alot of working people in this country will just say were not going to take it any longer.

Yeah, I've got an uncle from Alabama that thinks the same way as you and feels that we're headed for revolution. He was all set to move to the Maldives and renounce his citizenship after Obama won the presidency, but then he concluded that it was too close to Africa, "the mother ship". So he called it off and is now planning to move to Tonga instead...if things don't go his way in November. "Geographically speaking, you can't get any further away from the ---- than you can by living in Tonga." Never mind that it's basically a hereditary monarchy; his dissatisfaction was never really about politics anyways. I suspect that you'd probably like it in Tonga, too.

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A quick glance through history reveals that there has never been a revolt by the rich, but many revolts by the poor.

...led by the rich (or those otherwise destined for riches if not a noose).

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...led by the rich (or those otherwise destined for riches if not a noose).

No doubt. Someone has to organize the anarchy!

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According to the Yahoo news story (http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1) almost half of America no longer pays anything at all in Taxes. Even worse "The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment"

You have a way of bringing things alive, Mark.rolleyes.gif

To which credits do you specifically object? Please also state what you feel would be better alternatives to the general intentions of said credits.

· Foreign tax credit

· Credit for child care and dependent care expenses

· Credit for the elderly or disabled

· Education credits

· Retirement savings contribution credit

· Child tax credit

· Adoption tax credit

· Earned Income Credit (EIC)

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You have a way of bringing things alive, Mark.rolleyes.gif

To which credits do you specifically object? Please also state what you feel would be better alternatives to the general intentions of said credits.

· Foreign tax credit

· Credit for child care and dependent care expenses

· Credit for the elderly or disabled

· Education credits

· Retirement savings contribution credit

· Child tax credit

· Adoption tax credit

· Earned Income Credit (EIC)

I object to all of them. The goverment shouldn't be controlling our behaviour by bribing us. You may like the things they are encouraing now but giving them this control over us also allows them to control you in ways you don't like. Someday there will be a tax credit for something you hate. Would Obama supporters want George Bush to have this power over them and vice versa? Getting rid of complexities in the tax code could also make it more difficult for rich people to avoid paying taxes.

Also, anyone who thinks rich people get away with not paying taxes should ask Wesley Snipes and Willie Nelson about it.

The article says that families of four making $50k a year or less can pay no taxes. I'd have to say that's OK with me. If you're trying to support a family of four on that income you need some help. Lowering their tax rate to 0% and getting rid of their deductions would make it more clear who pays the taxes in this country.

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Also, anyone who thinks rich people get away with not paying taxes should ask Wesley Snipes and Willie Nelson about it.

The article says that families of four making $50k a year or less can pay no taxes. I'd have to say that's OK with me. If you're trying to support a family of four on that income you need some help. Lowering their tax rate to 0% and getting rid of their deductions would make it more clear who pays the taxes in this country.

The statement that a family of four pays no taxes is also untrue. The example given showed how a combination of lower tax rates, deductions and credits allowed the hypothetical family to receive $31 from the government. What is left out of the equation is the 7.65% taken from the $50,000 paycheck for Social Security and Medicare. That hypothetical family that Marksmu railed against paid $3825 in payroll taxes that is not eligible for any deductions or credits, making their net PAYMENT to the government $3,794. Additionally, they paid state and local sales taxes, and property taxes, if they own a home. The IRS sales tax calculator estimates that a Houston family of 4 making $50,000 would have paid $1,096 in state and local sales tax.

So, this deadbeat family that Marksmu is organizing a revolt against actually has paid at least $4,921 in taxes, or nearly 10% of their wages. By way of comparison, the 400 richest Americans paid only 17.2% of their income in taxes, a DROP from 22.9% in 2001. In other words, they got to keep over $87 BILLION of their $105.3 Billion in earnings.

http://articles.latimes.com/2009/jan/31/business/fi-richtaxes31

Pardon me while I shed a tear.

By the way, does anyone remember the argument given for lowering the tax rates and capital gains rates? The argument goes that by lowering taxes, these hard working Americans will be able to make even MORE money, thereby increasing the total amount of taxes they pay, even though the percentage is less. Will someone PLEASE explain to me why Marksmu is now threatening a revolt for things working out EXACTLY the way his hero George Bush promised?

Edited by RedScare
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Will someone PLEASE explain to me why Marksmu is now threatening a revolt for things working out EXACTLY the way his hero George Bush promised?

Marksmu's dissatisfaction was never really about politics anyways.

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According to the Yahoo news story (http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1) almost half of America no longer pays anything at all in Taxes. Even worse "The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment"

It makes me sick to think the government is actually PAYING people our money without requiring them to do some kind of work for it. So my questions to everyone else here, are these:

1. Have we crossed the tipping point? Are there now more people riding the cart than helping to pull it? And why are so many riding?

2. What incentive do the these people who are actually making money for doing nothing, have to improve their position, when they will just have to work harder and pay taxes to get to the same place they are now?

Clearly the country is in dire straits - the Federal Deficit is skyrocketing and we have the new administration making even more unfunded promises and entitlements. Where is the money going to come from? We only have half of the US contributing, and that half is constantly being spoken down to by this president for having to much, and needing to pay more....Why should I continue to pay $450 in social security per month, when it is already guaranteed that when I am old enough to receive it, it wont even exist?

I bring the topic up again, because it is timely...with taxes due next week, how many people are truly fed up? How many people are looking at their tax return and actually seeing what they paid this year and wanting to break something? Turn on the TV and watch the news and all you see is people with their hands out, asking where is my free health care? Where is my new car voucher? Where is my new appliance voucher? It is sickening...half the country is officially now leaching off the other half, and all the President seems to wants to do is make them MORE dependent on the government, not less.

When is enough enough? I think we are reaching the tipping point...the point where the half who are actually doing something stand up and say - no, I'm just not going to do that. Where is the tipping point and how close are we?

Personally I think the tipping point is 2012. If there is not a new president and congress elected then, I feel alot of working people in this country will just say were not going to take it any longer.

So what you're saying is you're so fed up with how much taxes you pay, you don't want to pay any more, and you want to be one of the people being pulled and not pulling? Join RedScare's revolution!!

Taxes have been around way longer than all the whiners who complain about them. If you are half decent at math, you don't end up paying anything come April 15th, and if you are conservative with your math you actually get a refund. I know it's more complex if you are self employed, but it still comes down to planning. If you somehow get it in your head that your gross pay is all yours, yeah, you will end up pissed. But wake up, it's not all yours, and it never was. This country rocks, and yes you have to pay to live here. I'd rather pay to live here and be free to buy all the animal parts and beer that I want, then smoke the animals in my backyard while I drink my freedom beer, that's way better than the alternative of having to fight or hunt for my animals, wood, and beer.

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I object to all of them. The goverment shouldn't be controlling our behaviour by bribing us. You may like the things they are encouraing now but giving them this control over us also allows them to control you in ways you don't like. Someday there will be a tax credit for something you hate. Would Obama supporters want George Bush to have this power over them and vice versa? Getting rid of complexities in the tax code could also make it more difficult for rich people to avoid paying taxes.

Also, anyone who thinks rich people get away with not paying taxes should ask Wesley Snipes and Willie Nelson about it.

The article says that families of four making $50k a year or less can pay no taxes. I'd have to say that's OK with me. If you're trying to support a family of four on that income you need some help. Lowering their tax rate to 0% and getting rid of their deductions would make it more clear who pays the taxes in this country.

I'd agree with you that there are better ways to carry out policy than with the tax code. For example, I think that incentives to procreate and raise/educate kids should be carried out in a similar fashion to the social security system. Most people just aren't programmed to respond to incentives that modify their tax bills in ways that they have difficulty grasping as much as they are to seek out direct payment. Immediate and easily quantifiable gratification is more effective at cultivating the desired behaviors and are more fiscally transparent.

But I do think that there's good reason for certain incentives to exist. How are we supposed to maintain our superpower status and global economic and cultural hegemony if we have declining fertility rates, accept fewer and fewer immigrants, are losing our edge with respect to the productivity of labor, and yet are transitioning to a service-based economy requiring relatively little investment into the capital stock. We must preserve and strengthen our factors of production or else risk diminished relevance.

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The foreign tax credit is reasonable, as the only way to get it is to pay taxes to a foreign government. The credit ensures you don't pay more tax than whichever country has the highest rate. It would be patently unfair to make $100, pay $40 in foreign tax and another $28 in US taxes. With the credit, you owuld owe nothing for US tax, as the foreign rate is higher.

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The foreign tax credit is reasonable, as the only way to get it is to pay taxes to a foreign government. The credit ensures you don't pay more tax than whichever country has the highest rate. It would be patently unfair to make $100, pay $40 in foreign tax and another $28 in US taxes. With the credit, you owuld owe nothing for US tax, as the foreign rate is higher.

True. The other part of the Foreign Tax Credit is that it only applies to countries that we've got a treaty with so that they're doing the same thing on their end. The way it works out, we don't just unilaterally sacrifice potential tax revenues.

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Yeah, I've got an uncle from Alabama that thinks the same way as you and feels that we're headed for revolution. He was all set to move to the Maldives and renounce his citizenship after Obama won the presidency, but then he concluded that it was too close to Africa, "the mother ship". So he called it off and is now planning to move to Tonga instead...if things don't go his way in November. "Geographically speaking, you can't get any further away from the ------ than you can by living in Tonga." Never mind that it's basically a hereditary monarchy; his dissatisfaction was never really about politics anyways. I suspect that you'd probably like it in Tonga, too.

Niche, your pathetic response is worthless again...You think by somehow by turning it into a race issue you will shut those people up who think they are paying too much? It's a shameful tactic and one I have seen way too many times by way too many people to give any credence to at all. It has absolutely nothing to do with race at all....I dont care what color the person in the white house is, or what letter follows his name...The race card is way over played, and the people who play it constantly never have any worthwhile arguments to make...I dont hate Obama b/c he is black, I hate where I see him leading this country. I hate the way he wants to reward his cronies and union bosses for getting him elected...I dont hate him b/c he is black, I hate him because he is a terrible president. I dont care what color he is. You can take your race baiting somewhere else, b/c it does not bother me at all.

To Red's actually valid point...if each individual voter had to write an actual check at the end of every year to the government for their taxes the crooks in Washington would be run out in completely in 4 years.....that $50,000 family of four in Red's example may be much more pissed off and actually get involved and start holding politicans accountable if they had to write the check for $3825 in payroll taxes. But its another one of their ways to hide the real cost...ya its on your pay stub, but Americans have very short memories and all they ever look at is the amount of the check...if it was never actually theirs they dont care....They need to see what they could have had if the crooks up in Washington actually cared about how much of your money they spent and gave away.

And I am sick of the argument that its the elites who reap all the advantages....I dont think a family of 3 with 2 working parents making $200,000 by any way qualifies a person as an elite...yet they pay a huge sum of taxes....Nearly $70,000 in income tax alone. Drop in some property tax, sales tax, tax on gas, tax on soft drinks, tax on alcohol, increases in capital gains taxes, etc, etc, etc....that family of 3 is now paying close to 55% of their total income in taxes...that does not leave that much for spending when you also figure that the family is also likely trying to save for retirement knowing the Social Security wont be around...Lets not forget that couple, likely has 4-9 years of student loans to repay...that $100,000 isnt going to just disappear, but they dont qualify for that deduction as well as many many others.

Do the Super rich reap advantages in the current tax code? Yes, they do....but the 200K family of 3 is not reaping any of these advantages, they are just being raked over the coals, and taxed to the breaking point. I complain b/c I see it....I see it quarterly in estimated taxes, I see it annually when compiling the reports....and being good at math and not owing taxes at the end of the year has absolutely nothing to do with not having paid them.

I dont mind paying to live in this great country - Its still the greatest country in the world...I mind paying for everyone else to live in this great country. Living here costs money, I understand that...we just need a more transparent tax code that takes out the unevenness built into the current system. I dont want to pay more, but I would stomach it better if everyone actually paid something.

And Im not whining, I'm making my observations...hopefully others are out there adding up their taxes too and thinking to themselves, we need to change directions. If you are content giving your money to others that think they can spend it better than you fine...that is your right, keep on voting the cronies into office....Personally I would rather decide how I spend my money. I would like a simple tax system that does not have any deductions, I dont want some rich person paying a lesser percentage than me, and I dont want some poor person paying nothing at all. Almost any system would be better than what we have now.

If a person has nothing invested, they have nothing to lose and no reason to change their habits.

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You think by somehow by turning it into a race issue you will shut those people up who think they are paying too much?

Nope, by pointing out the obvious I anticipate getting a lengthy, carefully crafted, politically correct response...a veritable admission of guilt.

It's a shameful tactic and one I have seen way too many times by way too many people to give any credence to at all.

I count 907 keystrokes worth of credence.

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And I am sick of the argument that its the elites who reap all the advantages....I dont think a family of 3 with 2 working parents making $200,000 by any way qualifies a person as an elite...yet they pay a huge sum of taxes....Nearly $70,000 in income tax alone. Drop in some property tax, sales tax, tax on gas, tax on soft drinks, tax on alcohol, increases in capital gains taxes, etc, etc, etc....that family of 3 is now paying close to 55% of their total income in taxes...that does not leave that much for spending when you also figure that the family is also likely trying to save for retirement knowing the Social Security wont be around...Lets not forget that couple, likely has 4-9 years of student loans to repay...that $100,000 isnt going to just disappear, but they dont qualify for that deduction as well as many many others.

I was going to post an intelligent rebuttal to your argument, pointing out that your anger is misdirected at the poor and lower middle class instead of the wealthy. But, then I saw the above quoted section. A family paying $70,000 in income tax on $200,000 in income is either an idiot or a liar. The base tax on $200,000 with NO deductions is only $44,000. With deductions and exemptions, it is only $38,000. Even adding Social Security/Medicare and assuming that both spouses make $100,000 only raises the taxes to $59,500. As a self-employed SINGLE person (13.3% self employment tax), I only paid $44,000 on slightly less than $200,000 a few years back. If a family of 3 cannot find the deductions and credits laying under their nose, and further, pays $10,000 to $25,000 MORE than the IRS requires, then they should have their multiple college degrees unceremoniously taken from them. They also should not be allowed to breed.

Edited by RedScare
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almost half of America no longer pays anything at all in Taxes.

consumption tax

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Nope, by pointing out the obvious I anticipate getting a lengthy, carefully crafted, politically correct response...a veritable admission of guilt.

My reply to you was short - you are a race baiter and everything you post on this site is forever tainted by your pathetic rhetoric. I pay no attention to you anymore...Your posts used to be well thought out and intelligible, but now they are nothing more than pathetic.

The rest of the "credence" was aimed at people actually having a discussion about taxes....Red. I was not in any way trying to be 100% accurate with my family of 3 making 200,000...I simply took 200,000 and multiplied it by (33%)...I did not go through looking for deductions, and every possible way the family could reduce their burden....I guess I should have said $208,850 to get to the 33% bracket, but again I was just typing quickly without spending time looking up brackets and deductions.

The main point is that people do not ever see the amount of money that they pay in taxes, and so they never really realize how much the government is taking. If that family of four had to write the check instead of having it taken out of their check automatically they would be much more involved in how the government spends our money.

I have a huge problem with the amount of waste the government is involved in....I have a huge problem with the increasing entitlement programs...somebody has to fund them. We are in an economic downturn...the private sector is freezing or reducing pay, and cutting jobs, but the government is giving raises, and adding tens of thousands of jobs. Last time I checked the government did not make any money...each raise and each new government job, costs those of us who are paying taxes money and adds to the deficit.

The path we are on is wrong. Everything I see makes me think the government is intentionally trying to make more Americans dependent upon them for everything. I do not think people need to expect the government to provide for them...the government should be a last resort...It is not a last resort though for many people, they expect it. The expectations of people in this country are changing, and everything Obama says appears to be an intentional act to create class envy so that he can continue to raise taxes. He has not done it yet, but the months of talking about it are usually done to numb everyone to the actual act of doing it.

More taxes for people working are coming...and its not taxes levied against the super rich...they are going to affect everyone who is actually working.

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Heh. The rallying cry of the new revolution:

"You can take my life, but you can't take my caridgan sweateeeeeeeeeeeeeerrrrrrrr!!"

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I have a huge problem with the amount of waste the government is involved in....

I think we all have a problem with the amount of waste the government is involved in. The big disagreement is about what constitutes waste. A program you see as wasteful I see as beneficial, and vice versa. Resolve that, and then we'll all be happy as clams.

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Flat tax. No deductions, no loopholes. So easy, so fair, but for some reason so hard for congress to enact. 

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I think we all have a problem with the amount of waste the government is involved in. The big disagreement is about what constitutes waste. A program you see as wasteful I see as beneficial, and vice versa. Resolve that, and then we'll all be happy as clams.

I think there are lots of areas we can agree on though. I think there are lots of areas that everyone can agree on....we just are so caught up in R or D labels, that we can no longer play nice together.

Fringe - I personally like the flat tax, and I like a national sales tax...I think a combination of the two with no tax on food is a big winner. I especially like a national sales tax b/c it forces those who do not pay taxes or are here illegally, to pay taxes everytime they buy something other than food.

I do not think you should be able to buy luxury goods if you are receiving government assistance.

At least with a flat tax and a sales tax people do not feel that they are being cheated constantly and paying more than their fair share while others pay nothing.

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My reply to you was short - you are a race baiter and everything you post on this site is forever tainted by your pathetic rhetoric. I pay no attention to you anymore...Your posts used to be well thought out and intelligible, but now they are nothing more than pathetic.

Let the record show that on April 8, 2010 at 8:05AM you posted a response claiming not to pay attention to the person to whom you were replying. We can establish, then, that your claim is categorically false. Furthermore, I can point to a previous instance of claiming a categorical falsehood, establishing a pattern. According to the Marksmu version of argumentative form, I should label you a "perpetrator of implausible arguments" and claim that everything you post on this site (whether internally consistent or not) is forever tainted by your pathetic implausible arguments.

Besides this...you are an ethnocentrist, not a racist. You get huffy in discussions pertaining to behavior patterns typical of particular American subcultures (and not others)...for instance, there's the one which happen to be predominantly comprised of black people and that has roots in African culture...but you never seem to crack jokes or speak down at a subculture best characterized by hippie liberal douchebagery because that's a subculture that you see as being more of an outgrowth of your own, even if you staunchly disagree with their politics. Hrmmm...I can see how you'd accidentally think that I thought that you were a racist.

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Flat tax. No deductions, no loopholes. So easy, so fair, but for some reason so hard for congress to enact.

Fair is subjective. I don't think a flat tax is in the least bit fair. The value of a dollar is relative to the amount of dollars you have available to spend. Not only that, but in order to fund a government at current levels, the flat tax would have to be set so high as to price poor people out of their homes and make it impossible to feed their families. Plus, and again to maintain government funding at current levels, the wealthy would receive little to no tax breaks. Poor people do not now, nor will they ever be able to, contribute much to the general tax base. The poor and middle-class are best left being taxed less than the wealthy, which allows them to outflow their cash into the general economy - thereby stimulating the economy. It's pretty simple. If you tax the poor and middle-class more, they'll spend less, and it provides little substantial value to the government coffers. Close to half of our country's budget is funded from income taxes, and if you were to set those as a flat tax, you'd either inherently cut that portion of income in half or raise the tax burden on the poor and middle class to unmanageable levels. Consider if you will that roughly 80% of the nation's wealth is controlled by 10% of the population. If you put a flat tax on income, you'd have to raise the tax level for the remaining 90% of the population in order to give any cuts to the top 10%. And if you aren't willing to do that, then what's the point of changing from our regressive system? Personally, I think I already pay plenty in taxes considering what I get in return, but it looks to me like you want me and the other 90% of the nation's population who control the bottom 20% of the nation's wealth to pay more. That doesn't sound too fair to me, but what do I know?*

*except basic grade school mathematics...

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consumption tax

We already have this. It's set at 8.25%, remember?

Do you propose we fund all government with this? Or, are we supposed to raise this tax to something like 50% to cover debts? What happens when the economy nosedives and people stop spending as much?

My curiosity is piqued by the concept, but I'd like it to be more fleshed out. My general belief at this point though, is that once you start trying to work through the details of a consumption tax, you'll realize it's untenable as little more than a ideological talking point.

I don't think our tax system is perfect, but it's actually pretty fair as is. The way to make it more fair is to increase the tax burden on the wealthiest ten percent and close a number of corporate loopholes. Other than that, we don't need to reinvent the wheel.

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The rest of the "credence" was aimed at people actually having a discussion about taxes....Red. I was not in any way trying to be 100% accurate with my family of 3 making 200,000...I simply took 200,000 and multiplied it by (33%)...I did not go through looking for deductions, and every possible way the family could reduce their burden....I guess I should have said $208,850 to get to the 33% bracket, but again I was just typing quickly without spending time looking up brackets and deductions.

If you wish to be taken seriously, you must at least make an attempt at accuracy. A family in a 33% tax bracket does not pay 33% on the entire $200,000, only the portion in that bracket. You get the same deductions and credits, and pay the same percentage on the first $50,000 as someone who only made $50,000.

Further, when your anger is based on the "fact" that a family of 3 must pay $70,000 tax on $200,000, when the tax code does not require such a sum to be paid, then you are angry at a myth. It cannot legally happen, yet you are angry anyway. I can't think of a word that adequately describes how stupid one must be to be angry at something that cannot legally occur. Yes, I am speechless at your stupidity.

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I don't think the math works out fairly at all with a flat tax.

I don't see a problem with the deduction system in place right now. Red has given good examples of tax math for $200K and $50K, and both seem to come out fair to me. Who is getting screwed again? I'm not sure what the outrage is about. For poor people, they do end up paying almost nothing because they have almost nothing to pay. They aren't rich for it, they just have money to live on. If they are idiots and spend it on sweet rims (note that idiots of all races waste money on sweet rims) instead of books, so be it. So I'm fine on taxes.

Handouts are a different story. This is such a broad term though, and could mean anything from a welfare check to government funded education. I think all of these programs are run with the best of intentions, but some are no doubt wastefully managed. I'm totally opposed to wasteful management of these programs at any level. However, complaining that someone used their welfare check to buy sweet rims instead of food - can't really get mad at that. The programs provide opportunity, it is up to individuals to be responsible for themselves. Obviously all of them won't, and all the bitching and moaning and law changes in the world isn't going to change that. You have to look at the success of a particular program on a macro level.

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Fair is subjective. I don't think a flat tax is in the least bit fair. The value of a dollar is relative to the amount of dollars you have available to spend. Not only that, but in order to fund a government at current levels, the flat tax would have to be set so high as to price poor people out of their homes and make it impossible to feed their families. Plus, and again to maintain government funding at current levels, the wealthy would receive little to no tax breaks. Poor people do not now, nor will they ever be able to, contribute much to the general tax base. The poor and middle-class are best left being taxed less than the wealthy, which allows them to outflow their cash into the general economy - thereby stimulating the economy. It's pretty simple. If you tax the poor and middle-class more, they'll spend less, and it provides little substantial value to the government coffers. Close to half of our country's budget is funded from income taxes, and if you were to set those as a flat tax, you'd either inherently cut that portion of income in half or raise the tax burden on the poor and middle class to unmanageable levels. Consider if you will that roughly 80% of the nation's wealth is controlled by 10% of the population. If you put a flat tax on income, you'd have to raise the tax level for the remaining 90% of the population in order to give any cuts to the top 10%. And if you aren't willing to do that, then what's the point of changing from our regressive system? Personally, I think I already pay plenty in taxes considering what I get in return, but it looks to me like you want me and the other 90% of the nation's population who control the bottom 20% of the nation's wealth to pay more. That doesn't sound too fair to me, but what do I know?*

It would still be more fair than what we have now. At one time it was estimated a flat tax of 17% would be adequate but that was before the war and Obama's Health Care plan.  

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It would still be more fair than what we have now. At one time it was estimated a flat tax of 17% would be adequate but that was before the war and Obama's Health Care plan.

How? Even if we could fund our government on 17% of all individual income, it still doesn't negate the point that 17% of $20,000 is far more negatively impactful than 17% of $2,000,000. A flat tax, no matter how low you set it, is less fair to the poor and middle-class than a regressive tax. I readily admit the regressive tax is less fair to the rich, but being as they've benefitted the most from our free enterprise system, I consider it a wash.

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How? Even if we could fund our government on 17% of all individual income, it still doesn't negate the point that 17% of $20,000 is far more negatively impactful than 17% of $2,000,000. A flat tax, no matter how low you set it, is less fair to the poor and middle-class than a regressive tax. I readily admit the regressive tax is less fair to the rich, but being as they've benefitted the most from our free enterprise system, I consider it a wash.

I think you meant to say 'progressive tax' on the rich is less fair. The flat tax is regressive and harms the poor.

I should restate that. Income tax is progressive. Flat tax is proportional, but has a regressive effect in that the poor spend virtually all of their income, whereas the rich save much of theirs.

Edited by RedScare
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I readily admit the regressive tax is less fair to the rich, but being as they've benefitted the most from our free enterprise system, I consider it a wash.

As compared to poor people in countries without a stable government or adequately regulated markets, our poor are vastly better off. According to the UN's 2005 Human Development Report, abstracted here, 40% of the world's population live on less than $2 per day (or $730 per year), a level of income that is nearly unfathomable in the United States. The difference between that and what the Census establishes as the poverty line ($9,570 for a single-person household, plus $3,260 for each additional person) is a tremendous one. In addition to being materially better off in very important ways (such as having essentially guaranteed access to food and clean water and typically having access to some form of motorized transportation and some level of professional healthcare), our poor don't have to concern themselves with the same kinds of instability, violence, corruption, or disregard for civil rights that are rampant in many third world countries.

The chronic poverty and recent turmoil in Mexico serves as a very relatable example, yet Mexico also has to deal with veritable chasms between socioeconomic classes that make our issues seem like merely hairline fractures, easily and frequently bridged. But that illustrates another point, that with or without a strong and stable government or adequately-regulated free enterprise system, wealthy individuals will find ways to fortify their position in society. They can, after all, afford to buy their own 'law and order'...however they desire to interpret it. The bottom line gets to be that the wealthy in any country will have an enviable existence (whether their absolute material wealth stacks up with their overseas counterparts or not) but that it is the poor that derive the greatest utility from the stability, effectiveness, and efficiency of governments and accompanying economic systems.

So coming full circle, there's no denying that poor people get the most benefit out of our system of government and our market regulations as they've evolved. All the same, it's obviously impractical to tax the different social classes according to the utility that they have derived from our effective system of government as compared to alternate ineffective systems (or the lack of one altogether, such as in a place like Somalia). Moreover, there is something to be said for the notion that there is a diminishing marginal utility of wealth; the more someone makes, the less each additional dollar matters to them. And that means that a pareto-efficient approach is to effectively implement a tax that is effectively progressive...without being so draconian, of course, that it has the effect of discouraging economic participation by society's most productive individuals.

^ Note that this is the optimized perspective of a fair-minded and level-headed socialist. If you care more about economic efficiency or growth as opposed to equitability, everything changes. It all depends on your priorities and goals...and hey, who says that our superpower status isn't also important for our poor?

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I think you meant to say 'progressive tax' on the rich is less fair. The flat tax is regressive and harms the poor.

I should restate that. Income tax is progressive. Flat tax is proportional, but has a regressive effect in that the poor spend virtually all of their income, whereas the rich save much of theirs.

In a global economy with highly developed financial institutions, savings very efficiently becomes investment. And investment is what allows for the expansion of our capital stock and even for the education that increases our the productivity of labor...all of which feed back into higher per capita wealth the world over. No doubt you'll counter that a disproportionate amount of the new wealth ends up in the hands of the wealthy. But by baking a bigger pie, it matters less how many slices are cut from it...which is to say, we can more easily afford to pay for more entitlements or transfer payments. This is why I like consumption taxes rather than income taxes or capital gains taxes.

I'd also like to point out that the United States is an investment of first resort for governments and wealthy individuals in unstable parts of the world and that by eliminating income taxes, corporate income taxes, and capital gains taxes (or otherwise addressing these issues by way of tax treaties with various countries) we make ourselves an even more attractive target for foreign direct investment...and that's always a good thing!

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I disagree with both of your posts, though I decline to type the reasons again (longtime posters may remember my lengthy retort to these issues).

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I disagree with both of your posts, though I decline to type the reasons again (longtime posters may remember my lengthy retort to these issues).

Nope. I forgot. :)

Edited by TheNiche
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And I am sick of the argument that its the elites who reap all the advantages....I dont think a family of 3 with 2 working parents making $200,000 by any way qualifies a person as an elite...

I don't know what your definition of "elite" is, but a family of 3 making $200k/year is pretty damn well off. They have more than enough to cover all the necessities of life and lots and lots of their desires. If all they have to complain about is taxes, then they're in waaay better shape than most of the rest of the US and the world.

Again, I don't know where the cutoff for "elite" status is, but only 4.2% of US households bring in more than $200k/year. They're better off than 96% of their fellow Americans. If that's not "elite", then it's definitely well into the "upper class".

US Census Data on Household Income

Maybe these upper class families should quit their whining and realize how good they have it.

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I think you meant to say 'progressive tax' on the rich is less fair.

I verified my terminology with the Wall Street Journal. It stands to reason I got it backwards.

So coming full circle, there's no denying that poor people get the most benefit out of our system of government and our market regulations as they've evolved. All the same, it's obviously impractical to tax the different social classes according to the utility that they have derived from our effective system of government as compared to alternate ineffective systems (or the lack of one altogether, such as in a place like Somalia). Moreover, there is something to be said for the notion that there is a diminishing marginal utility of wealth; the more someone makes, the less each additional dollar matters to them. And that means that a pareto-efficient approach is to effectively implement a tax that is effectively progressive...without being so draconian, of course, that it has the effect of discouraging economic participation by society's most productive individuals.

In other words, we agree on this. Your prose was just... less prosaic.

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Maybe these upper class families should quit their whining and realize how good they have it.

But how well off do they have it, really? Surely most of them aren't getting their money for nothing and their kicks for free. They've probably invested a great deal more in their career and are subject to greater financial volatility than the working classes could ever fathom. I'm not about to say that luck has nothing to do with it; but luck can be an ally as a foe.

And of course, we've already discussed the diminishing marginal utility of material income/wealth.

Oh, and if you're going to talk about upper class families, bear in mind that money acts as an industrial-strength solvent. Managing familial entropy gets to be a much more difficult process, also fraught with drama. Witnessing that kind of stuff almost makes me think that humans are somehow programmed to create their own stressors and find ways to limit their happiness, regardless of their material circumstances.

Bottom line, I'm not convinced that wealthier people are necessarily all that much happier. And I think that that gets to be especially true if you start adjusting for factors like age, intelligence, and household composition.

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Bottom line, I'm not convinced that wealthier people are necessarily all that much happier. And I think that that gets to be especially true if you start adjusting for factors like age, intelligence, and household composition.

I definitely agree that money does not equal happiness.

That said, I don't think there's any doubt that raising a family of 3 is easier done on an annual income of $200k than it is on an annual income of $20k...even when you account for the fact that the wealthier family has to give up around $40k in income taxes.

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I disagree with both of your posts, though I decline to type the reasons again (longtime posters may remember my lengthy retort to these issues).

I forgot as well. :)

You should do a cut and paste and keep them on file. It would save you quite a bit of typing.

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I definitely agree that money does not equal happiness.

That said, I don't think there's any doubt that raising a family of 3 is easier done on an annual income of $200k than it is on an annual income of $20k...even when you account for the fact that the wealthier family has to give up around $40k in income taxes.

I don't know about that. Adjusted for demographic factors, intelligence of the parents, etc., I'd almost suspect that rich kids are harder to handle, have more personality disorders, and get into more trouble.

Bear in mind, I grew up in a border town that had the highest unemployment rates and lowest wages in the nation and went to school with folks whose large families survived rather easily on less than that. It's really easy, actually, if that family has reasonable expectations of what they can afford or think that they are entitled to. Bankruptcies and bad credit were endemic, but those kinds of things don't matter so much to people who have no repossessable assets or expectations of having repossessable assets.

Then there's my own personal experience from a few years back when I tried to get serious with a girlfriend. She started laying out her long-term vision, which involved living in a farm house on lots of acreage about two hours outside of Houston most days out of the week, but with a crash pad somewhere in town that was sufficiently large for the family (and her parents, if necessary). She wanted 1.3 kids, to be enrolled at Kinkaid, and a servant to ferry them around when it was inconvenient for us. And the kid(s) couldn't come along until we could secure that lifestyle, because of course they'd know if they'd been raised in an apartment when they were very small and would hold it against us for all the neuroses that they'd ever have later in life. ...I know it sounds like a joke, but she wasn't joking. Needless to say, she and her picky ovaries are long gone. I wouldn't want that lifestyle, and I certainly wouldn't want to pay for it. Living hand-to-mouth would be easier.

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Then there's my own personal experience from a few years back when I tried to get serious with a girlfriend. She started laying out her long-term vision, which involved living in a farm house on lots of acreage about two hours outside of Houston most days out of the week, but with a crash pad somewhere in town that was sufficiently large for the family (and her parents, if necessary). She wanted 1.3 kids, to be enrolled at Kinkaid, and a servant to ferry them around when it was inconvenient for us. And the kid(s) couldn't come along until we could secure that lifestyle, because of course they'd know if they'd been raised in an apartment when they were very small and would hold it against us for all the neuroses that they'd ever have later in life. ...I know it sounds like a joke, but she wasn't joking. Needless to say, she and her picky ovaries are long gone. I wouldn't want that lifestyle, and I certainly wouldn't want to pay for it. Living hand-to-mouth would be easier.

I dated her too... to the same effect.

I don't understand how some people can be so unpragmatic. Don't get me wrong, I like nice things as much as the next guy. I just can't find myself being driven by the attainment of nice things. They're a nice ancillary in this journey we call life, but they're hardly worth living for. Why anyone would be so concerned with crap that truly doesn't matter is beyond me, and being reminded of people like this never fails to make me grateful for the upbringing I had.

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So then, our call to rally against the British was "no taxation without representation", so shouldn't there be "no representation without taxation"? Seems there should be.

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So then, our call to rally against the British was "no taxation without representation", so shouldn't there be "no representation without taxation"? Seems there should be.

Do you know anyone who is not taxed? There are the income taxes, of course, though some low wage earners and unemployed do not pay them. However, every wage earner must pay Social Security and Medicare taxes, as do the self-employed. Anyone who owns a home or land pays property taxes. Even the homeless pay sales taxes on their booze and cigarettes. Do you not think those taxes are sufficient to entitle one to be a citizen and represented?

But, to answer your question, no, I do not believe in no representation without taxation. I do, however, believe that some people in this country are far too selfish and greedy, and that they should spend more time appreciating what they have and less time trying to make everyone else pay for it.

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Anyone who owns a home or land pays property taxes.

I would add that even renters pay property taxes, although they are manifested as a component of their rent without which the return on investment would be insufficient to justify its existence.

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Do you know anyone who is not taxed?

I don't think Ted Kaczynski paid any taxes. (Although he did pay into the federal postal service every time he bought a stamp.)

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 I do, however, believe that some people in this country are far too selfish and greedy, and that they should spend more time appreciating what they have and less time trying to make everyone else pay for it.

I agree but there seems to be far more people that are lazy and think they are entitled to what others have worked so hard to get then the small percentage you are referring to. Thus the unhappiness with our present government and taxes. 

Already wary of the federal government, Americans have grown even more critical, less trusting and even fearful of Uncle Sam since President Barack Obama took office, according to an exhaustive new study being released Monday.

poll

I'm unhappy also but unlike some I blame it on all politicians, not just Democrats. In 2012 we need to clean house with both parties.

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I agree but there seems to be far more people that are lazy and think they are entitled to what others have worked so hard to get then the small percentage you are referring to. Thus the unhappiness with our present government and taxes.

Call it whatever you want, but you really ought to stop using the entitlement label - if only for semantic accuracy. If anyone thinks the bottom of the food chain is a glamorous position to be in, then perhaps we can resurrect the term, but until we find that person, let's retire it.

I'm unhappy also but unlike some I blame it on all politicians, not just Democrats. In 2012 we need to clean house with both parties.

I blame it all on political pundits. Making mountains out of molehills and getting the populace whipped into a frenzy about misrepresented positions may make for good ratings, but it's hell on the morale of the country. Replacing everybody in a position of authority won't do anything but give the commentators someone new to bjtch and moan about. I say we all vote to reform this country by turning off Fox News and MSNBC and turn our radio dials back to music stations. Who's with me?!

Edit: HAIF has now perfected the English language by turning a female dog into a delicate flower.

Edited by AtticaFlinch

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