Tax cuts!

Discussion in 'Politics, Religion, Social Issues' started by G4scott, Sep 11, 2003.

  1. G4scott macrumors 68020

    G4scott

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    #1
    You know, 96% of the taxes collected in this country are paid for by the top 50% of income earning people. So do you think a tax cut for the people who pay 4% of our nation's taxes is going to help them all that much? Heck, why don't we make it so that if you're not in the top 50% of income earners in the US, you don't have to pay taxes!

    Just thought.
     
  2. Inu macrumors newbie

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    #2
    Re: Tax cuts!

    Hm. Somehow i doubt your numbers. At least in switzerland (wich got a reputation as rich land) the big tax bag comes from the middle class, wich isnt top 50% (what does that mean anyway? that half of the pop that does earn more than the national average?). Anyway - no citizen should be free of tax. Makes no sense at all, especially when you have a big deficit (as you aparently do).
     
  3. mactastic macrumors 68040

    mactastic

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    #3
    I sense a blizzard of facts from mcrain coming soon.... batten down the hatches!
     
  4. mcrain macrumors 68000

    mcrain

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    #4
    You have no idea how the taxing system works. No idea at all. You are totally and completely brainwashed by the morons in Washington. They have NO tax education for the most part, and most have never practiced tax law in their lives.

    Instead of dropping a "blizzard" of tax knowledge on you, why don't I suggest a new thought, maybe two, and you can go look them up.

    1. Federal income taxes are not the only taxes collected.

    2. If you look at all taxes collected, as a percentage of income, everyone (even people who pay NO federal income taxes) pays a nearly equal percentage of their income in taxes.

    Oh, one more...

    3. Making the federal income tax less progressive makes the overall tax system regressive.
     
  5. G4scott thread starter macrumors 68020

    G4scott

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    #5
    Maybe I said that wrong... I meant income taxes 96.09% of income taxes are paid by the top 50% of wage earners.

    IRS Figures

    Here's another page that shows some facts that are hard to argue with.
     
  6. mactastic macrumors 68040

    mactastic

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    #6
    Well, if the top 50% of earners made most of the income, wouldn't it seem fair that they pay most of the income taxes?

    And are you talking mean income? 'Cause that's not necessarily the best way of looking at statistical data. GWB's tax cutting crowd went around telling everyone that the average tax savings under the new plan would be over $1100. But when you looked closer, the median was around $400. The mean was only as high as it was because the people at the top were getting huge tax breaks, while those at the bottom got next to nothing. In other words, the standard deviation of the mean was quite large. You present an incomplete, and disingenuous, picture of the tax structure.
     
  7. mcrain macrumors 68000

    mcrain

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    #7
    Another page that's hard to argue with? You've got to be kidding me right?

    Did you not read what I said? Of course Rush is going to spout on and on about how only the rich pay "income" taxes. Why? Because IT IS TRUE! But, like I said, and you seemed to have forgotten, those are NOT THE ONLY TAXES.

    Real estate, state income, excise, gas, sin, SS, FICA, Medicare, Medicaid, sales, etc, etc, etc...

    All of those taxes are regressive, and paid primarily by the lower classes.

    So, feel free to keep reading Rush and believing everything he says, but he is VERY EASY TO ARGUE WITH if you have any tax education at all.
     
  8. mcrain macrumors 68000

    mcrain

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    #8
    Oh, and don't forget that the majority of these very wealthy people who pay "most of the taxes" own the large corporations in this country. Why is that important? Because these same people who are getting huge tax cuts from Jr. are also getting even larger tax cuts and corporate welfare handouts for their companies.

    That just makes them even wealthier without the need for any taxes whatsoever. How fair is that?

    How fair is it that a librarian who makes $34,000 per year pays more of her income in taxes than some of the wealthiest people in this country?
     
  9. Sayhey macrumors 68000

    Sayhey

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    #9
    When I go to the store and there is a sliding scale for the price of bread, maybe then I'll be concerned about the "poor" folks with incomes in the $100,000+ range who have to pay so much in income tax. We all make a financial contribution to our government, for those with limited incomes that contribution comes from the bone.
     
  10. mcrain macrumors 68000

    mcrain

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    #10
    There is a sliding scale, but it slides the wrong way. Lots of very wealthy people own companies that have exemptions from sales taxes for things they buy to resell.

    I can't tell you how many people use those exemptions to buy things for their own personal use and consumption.

    I've prosecuted people who've done that, and it's widespread.
     
  11. Sayhey macrumors 68000

    Sayhey

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    #11
    Very good point, mcrain. I stand corrected. I think you would agree with the general point I was trying to make about the impact of taxes on lower income individuals.

    There is an old line about which animal makes the greatest contribution to breakfast the chicken or the pig. At the risk of calling people like myself pigs, I have to say the proportion of income tax paid, after the necessities of life are figured in, for lower income individuals shows a greater contribution.
     
  12. Desertrat macrumors newbie

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    #12
    Still got your 1040 book around? Take a range of arbitrary gross incomes, say by 10s from $20K on up to $100K or whatever. Knock off the standard deductions. Figure the tax. Makes it easy to see who pays what.

    Even without a progressive rate, rich folks pay a lot more than poor folks. Ad valorem taxes on property are the most obvious, particularly for schools. They buy more and fancier cars and clothes, which is a bunch more in sales taxes.

    I'm still stuck with the feeling that it's just flat-out unfair to make a guy who works smarter, longer and harder than others in order to make more money, pay a higher percentage of that money as income tax. All my working life, I put in for overtime work, or did stuff at home from five to midnight or worked on weekends. Other folks were sitting on their dead butts watching TV. Why is it fair to charge me a higher RATE on my income?

    'Rat
     
  13. mactastic macrumors 68040

    mactastic

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    #13
    Because all the other taxes affect you less the more you make. That is my understanding of regressive taxes. When you look at overall tax burden, not just income taxes, you find that the tax burden is spread pretty evenly IMHO.
     
  14. mcrain macrumors 68000

    mcrain

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    #14
    If you do a search on these political boards about taxes, you'll find a lot of discussions in which I, and others, have discussed the nature of the different taxes. In fact, there are one or two examples comparing two people, one who makes a little, and one who makes a lot, and on average, they pay about the same amount as a percentage of income in taxes. The very, very wealthy generally pay less (not more as a percengate of income) as do the extremely poor. There are exceptions, but in general, that's the way it works.

    You can do research on the internet if you'd like, or you can do like I did, take every tax class offered in a good law school, and learn your tax policy from a guy asked by Reagan to be his SecTreas.

    (edit) Oh, I almost forgot... you can practice tax law for over 5 years, 2 of which with a taxing agency.
     
  15. Waluigi macrumors 6502

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    #15
    Whoa, I'm completely lost here. Just a quick question for mcrain: where did you learn so much about our tax system? Do they even teach that in college level economics classes? I'm not trying to second-guess you; I'm just taken aback at your in-depth knowledge on taxes.

    It is pretty sad too, because most voting Americans have strong opinions about taxes, and they, like me, would be lost in this thread. It really should be taught in our k-12 curriculum somewhere so we can prepare our children to become more informed when they vote.

    --Waluigi

    EDIT: Well, looks like you answered my question as I was writing it!
     
  16. mcrain macrumors 68000

    mcrain

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    #16
    I really don't mean to sound cocky, but the fact of the matter is that I really do know a lot about taxes. In fact, I know a lot more about taxes than 99% of the politicians in Washington.

    In 1996, there was a debate between the top democrat on taxes and the top republican on taxes. During the argument, they argued back and forth on some issue like capital gains taxes. What they were saying made no sense to me, and both sides seemed wrong.

    I went to my professor (big time republican), and asked him if he had seen the debate, and asked whether I was nuts in thinking that both sides were wrong. His response was that with ONE year of tax law under my belt, that I already had more tax education than both of them. (He knew both personally).

    Since that time, I have taken 6 or 7 more law school tax courses and worked in tax law for 5+ years.

    Yes, I just bashed the premise of this thread and the Republican spin on tax policy. But, you may not know that while I can say that I really do know how the tax system works, I can not, and will not, say that the Democrats are right. They aren't. They are as blinded by the Washington spin as most everyone else is.

    There is a fair way to apportion taxes in this country, but it WILL NEVER be adopted because NO ONE would support it. Way too much political losses for both sides if it were used.
     
  17. Taft macrumors 65816

    Taft

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    #17
    Why??? WHY???? Because...I mean...I just...

    Oh, heck. I GIVE UP!

    If people can't be bothered to read the intelligent and experienced posts of a tax professional on a thread you are posting before RESTATING THE SAME DANG QUESTIONS FOR THE UMPTEENTH TIME, whats the freakin' point? Search the boards for taxes and read mccrains various posts. I have, and I learned a lot from them.

    You can't come into a conversation midway through and start saying things which have been answered and refuted a billion times on the board. Its just not fair.

    Taft
     
  18. G4scott thread starter macrumors 68020

    G4scott

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    #18
    mcrain for secretary of treasury (or something like that)!

    eh... It hurts to live in the most liberal part of Texas, but I can deal with it!!!

    That's one thing I have noticed, is that there is way too much politics involved in, well, politics...

    Of course, I don't think taxing the top 1% more is going to help very much...

    I still think that America has turned into the land of opportunity for the smart, and the land of welfare for the lazy...
     
  19. mcrain macrumors 68000

    mcrain

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    #19
    1. No way.
    2. Who said anything about taxing the top 1% more? It's the Republicans who are insisting that we tax them less. Big, big difference.
    3. That's absolutely pathetic. You need to read and maybe go talk to some people who are homeless/jobless/on welfare before you make that sort of statement. Let me ask you a question. When you imagine someone on Welfare, what does that person in your mind look like?
     
  20. Desertrat macrumors newbie

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    #20
    Save the arrogance, please, Taft. I read every post in the thread, which is why I asked the question. When folks support a progressive tax rate as earned incomes rise, I question the fairness. I'm no "tax professional", but I've been dealing with the IRS for some fifty years, now--and I ain't totally iggerant.

    McCrain asked, "When you imagine someone on Welfare, what does that person in your mind look like?" :) For me, it varies all over the place. A better question might be, "What percentage of those receiving governmental assistance are truly deserving?" There, I'd have to say, "Most."

    The problem is that the eligibility requirements have been loosened away from the "safety net" concept to--for too many--a way of life. For instance, "children having children" and AFDC. I don't really have any answer for correcting it, however.

    A few years back, I ran the numbers for my once-upon-a-time situation, had I stayed gainfully employed in the formal world in Austintatious. Wife, couple of kids, $50K a year. The total of all taxes and governmental fees ran somewhere around 42 percent.

    I'm dubious that somebody trying to live off of a $20K/yr gross income lays out $8,000 in total taxes.

    'Rat
     
  21. Taft macrumors 65816

    Taft

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    #21
    The question you asked is:

    Boiled down, what you are really asking is "why is it fair to charge people who make more money a higher rate of taxes?"

    From McCrain's earlier post:

    Boiled down that basically means, "wealthy people pay more on their income tax because if they paid less in income tax they would be paying less in overall taxes.

    Thats the point. By only considering income taxes, you can't possibly make an assertion as to the fairness of the tax system in this country. Income tax is only a small fraction of the total taxes collected in this country. If you take total taxes into account, the system is more fair than you obviously think it is.

    Sorry to be pissy, but it seems like people just blantantly ignore information on these boards when they make their points. You might not believe what mccrain said, but he answered your question a few posts before you asked it. If you've got information that refutes the theory, lets hear it.

    It wasn't arrogance, it was frustration.

    Taft
     
  22. Taft macrumors 65816

    Taft

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    #22
    And about this:

    I'm sorry, but between you and a tax professional, I'm going to believe the tax professional.

    You save money, right? I mean, you probably don't spend all of your after income tax money every month.

    But lets pretend make third of what you currently do. Now a much higher percentage of your paycheck would have to be spent on your daily necessities.

    Now consider that everything you buy, and most services you use have some sort of tax on them. So if most poor people are able to save/invest less and must spend more of their money, the following equation should hold:


    (total $$ spent) * (avg tax rate)
    ---------------------------------------
    (total income)


    is less than


    (total income) * (avg tax rate)
    ------------------------------------
    (total income)


    So the more of your income spent each year, the higher your tax rate would be. If you spent all of your income every year, your total tax rate would be higher than if you only spent 75% of your income (assuming you invest or save the extra 25%). This assumes the tax rate on all products and services is equal, which is untrue, but should drastically effect the equation above.

    Also, depending on your method of investment, you might be offered temporary tax exemption on some of that income (through IRA's or what-have-you). A poor person who had no extra income every month would have a hard time investing their money that way. And if you are really wealthy, you can probably afford really good accountants that will be able to wriggle out of a few more taxes, bringing your rate down even further.

    Based off of mccrain's explanations here is how I envision it looking:

    Code:
    
    income  + |
    tax       |                   ..
    as a      |                ...
    % of      |            ....
    income    |       .....
              |   .... 
              |...
            - |_______________________
                -    total income    +
    
    
    other   + |
    tax       |...                   
    as a      |   ....            
    % of      |       .....           
    income    |            .....
              |                 ... 
              |                    ..
            - |_______________________
                -    total income   +
    
    
            
    total   + |
    tax       |                   
    as a      |                     
    % of      |   . . . . . . . .
    income    |...                ....
              |     
              | 
            - |_______________________
                -    total income   +
    
    Taft
     
  23. Desertrat macrumors newbie

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    #23
    Well, let's see, here, Taft. You said, "If you look at all taxes collected, as a percentage of income, everyone (even people who pay NO federal income taxes) pays a nearly equal percentage of their income in taxes."

    I'll use my mother as an example, although she's representative of quite a few LOLs that I know. (Florida and Arizona have millions like her.)

    She lives in a paid-for house with modest ad valorem taxes. Her paid-for car is driven some 1,200 miles per year. Other than insurance, her overhead for food, utilities and "stuff" is maybe $600 a month. IOW, she ain't much of a consumer.

    The great majority of her income is tax-free coupon clipping.

    Her taxes to all grabbers totals out maybe 10% of her income. That's income, ad valorem, sales, gasoline, tariffs, excise, you name it...

    The "hidden" taxes that account for some 60% (?) of federal income don't directly affect folks' decision-making on their spending. Generally. What does affect economic decision-making is the tax rate on one's income. It can move a person from an earned-income category to efforts at capital gains or other "unearned" income. Tax rates have pushed a goodly number of people into "off the books" business activity. (Aside from legal but unreported sales, there is the world of "controlled substances" where I really doubt there is much reporting of income.)

    So I really doubt this notion of equality...

    'Rat
     
  24. Taft macrumors 65816

    Taft

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    #24
    I can see from your profile that you're around 70. That would put your mother at around lets say 90. I take it she probably doesn't work at that age, nor should she. So she probably doesn't have much of an income, rather living off of savings/social security/retirement funds. If she does, I'm envisioning interest/earnings on investments. Is that close?

    You said "The great majority of her income is tax-free coupon clipping." but that isn't really income. She isn't being paid to do it, nor is there any transfer of wealth taking place. Thats bargain hunting. I would very much like to see the items you listed in the credit column of your calculations for your mother's income. Did you figure out coupon clipping into your year end income? Somehow I don't think you are using the legal definition of the word income.

    So you are comparing yourself to a 90 year old woman, making very little money and saying what exactly? That she should be taxed more? That you should be taxed equally to her?

    I'm talking about people who work at jobs and have real incomes. Familes of four where the father works at a factory for 25 grand a year and the mother brings in another 10. People who spend every dollar feeding/clothing/schooling their children and trying to give them the best life possible. Or the families where the father can't get work or the factory closed down.

    Theres a big difference.

    Taft
     
  25. Desertrat macrumors newbie

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    #25
    Hokay. It's a "define your terms" thing. No biggie.

    She'll be 93 come October 20th. Coupon clipping is worth maybe $40K a year, mas o menos. Retirement fund income, roughly $12K a year...

    I've used "income" per IRS: Earned income, as in salary and wages; unearned income as in capital gains, dividends and suchlike.

    Age makes no difference, nor does occupation, when one looks at taxes per se. Age does bring some advantages insofar as exemptions, but one is not entirely off the hook.

    :) I discovered Schedule C back around 1968, and decided IRS had given me a license to steal. Been legal and laughing, ever since.

    :D, 'Rat
     

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