Taxes Flatten but Deep Pockets Still Bulge

Discussion in 'Politics, Religion, Social Issues' started by IJ Reilly, Apr 17, 2006.

  1. IJ Reilly macrumors P6

    IJ Reilly

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    #1
    http://www.latimes.com/news/nationworld/nation/la-na-taxday17apr17,1,6526314.story
     
  2. Thanatoast macrumors 6502a

    Thanatoast

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    #2
    I blame the freedom-hating terrorists.

    No, seriously, Bush has used them to jsutify every piece of crackpot legislation or rights-reducing policy he could think up for five years. The second round of cuts was justified by needing economic stimulus in the aftermath of 9-11, as I recall.

    My question is, can we turn around our country after Bush is booted from office? Can we not become a paranoid, authoritarian, two-class society?
     
  3. jadam macrumors 6502a

    jadam

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    #3
    Yes lets start with taxing 90% of what the rich make!!! Anything above 200k a year gets taxed 90%!!!

    Great idea for the masses right?
     
  4. Nickygoat macrumors 6502a

    Nickygoat

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    #4
    I know it's not an official policy but isn't a flat rate tax meant to avoid exemptions? So the Payroll Tax only applies to the first $90000, and the top rate after $326450 :)eek: - a huge figure - someone show Gordon :D ), would be removed if it became policy, thus negating those points.
    A true flat rate means that all money earned is taxed at the same rate, regardless of whether you earn $1000 or $1,000,000. Is there a compelling economic argument for higher taxes at higher earning levels? I haven't seen one. I know there is a social argument for it but not economic.
    My 2¢ (taxed at 22% plus NI).
     
  5. IJ Reilly thread starter macrumors P6

    IJ Reilly

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    #5
    That depends on who you ask. The overall federal tax rates are nearly flat now, but not because they don't include exemptions, but because they tax passive income (capital gains, dividends) at a far lower rate than earned income, and passive income is what makes wealthy people wealthy. Then you have the payroll tax, which is regressive by design. Throw on top of that state and local taxes (especially sales and property tax), and you have a tax system which is flat at best, and in many cases, net regressive.
     
  6. Thomas Veil macrumors 68020

    Thomas Veil

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    Actually, that's not quite as outlandish as people might think.

    From 1932 all the way to 1981, the top marginal tax rate was at least 63%, and from 1951-1963 -- generally agreed to be biggest boom years in the economy -- it averaged a whopping 91%.

    Somehow we managed to not only survive, but thrive -- and it wasn't only the rich, it was the middle class as well.

    Similarly, under Clinton the top tax rate was raised modestly, from 31% to 39%, and look what happened: another boom.

    The flat-taxers are wrong, and they belong in the same looney bin as the flat-Earthers.

    Top marginal tax rates, 1913-2003
     
  7. miloblithe macrumors 68020

    miloblithe

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    #7
    A flat tax has been good for Russia, but basically only because it's easier to administer and better avoids corruption--reasons that don't apply on the same scale to the US.
     
  8. pseudobrit macrumors 68040

    pseudobrit

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    #8
    I sat down and crunched numbers a few years back (on these very forums) on one of my tax returns from around 1999.

    I figured out my effective tax rate, including sales, FICA, state, local, etc.

    The tax rate on my disposable income (the money I made above the poverty line for my state) was 63%.

    I made less than $20,000 that year working full time.

    So cry me a ****ing river about how the rich were paying too much at 39% on their post-$300k income. Excuse me while I vomit.
     
  9. tristan macrumors 6502a

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    #9
    Great idea. I guess I'll stay home from work today, given that 90% of what I make will have to be forked over to your ilk, and the other 10% won't cover my lunch & gas. Or maybe I'll just move to a more reasonable country.

    The quoted tax rates are B.S. 28% federal + 7.75% state/local + 15.2% self-employment + 5% sales tax. Nothing like paying a tax bill large enough to put a kid through college and getting absolutely no services in return.
     
  10. iGary Guest

    iGary

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  11. miloblithe macrumors 68020

    miloblithe

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    #11
    What government services are you not getting?
     
  12. tristan macrumors 6502a

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    #12
    What services am I getting? I pay for my health insurance. I paid for my graduate degree out of pocket. I don't have any kids in school. I went to private school. I was out of work for months and never got a dime in welfare (because I'm self-employed). Etc etc. The gap between what my wife and I pay in taxes and the services we get is truly vast.
     
  13. pseudobrit macrumors 68040

    pseudobrit

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    #13
    You'll be glad to know the bulk of your tax bill these past few years has gone to pay Halliburton, Lockheed Martin and other defence contractors to protect America from Saddam's weapons of mass destruction.

    Which would have killed you and your wife if you weren't paying for the services of these important contributors to society.
     
  14. pseudobrit macrumors 68040

    pseudobrit

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    #14
    Do you think it would jumpstart our economy if we discouraged people from spending money?

    I think sales taxes and all other regressive taxes are the most rotten trick ever played upon the American people.
     
  15. iGary Guest

    iGary

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    #15
    Catches everyone, no need for huge bureaucratic IRS, fair, and yeah, when people actually get close to what they acually get paid, they will probably spend it, I think.

    I think income taxes are a pretty rotten trick myself.
     
  16. tristan macrumors 6502a

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    #16
  17. pseudobrit macrumors 68040

    pseudobrit

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    It catches everyone all right, but regressive taxes are never fair because they include no deduction for levels of income below the poverty line or cost-of-living.

    They are when the standard deduction stops at least $5,000 below the cost of living. If they could fix that it'd be a nice step forward.
     
  18. miloblithe macrumors 68020

    miloblithe

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    #18
    Sure would be nice if we could just kill all those old people.
     
  19. IJ Reilly thread starter macrumors P6

    IJ Reilly

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    #19
    The real suckers in this system are the people who make the mistake of working for a living, especially if they work for themselves. Thanks to the Bush tax cuts, the tax system is now heavily biased towards investment income -- a dollar earned through self employment is taxed at roughly three times the rate of a dollar made in capital gains.
     
  20. tristan macrumors 6502a

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    #20
    Exactly... Sometimes I think the tax code is written by people who flip real estate for a living. Since I rent, the only real tax break I get is the SEP. (Like a super 401k). Doesn't really eliminate taxes, just defers them until I retire.
     
  21. IJ Reilly thread starter macrumors P6

    IJ Reilly

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    #21
    Close enough. It's effectively written by corporations, who see the tax codes only as a method of encouraging the movement of capital. Labor, they don't care about. Once again, we see the manifestations of a legislative process dominated by corporate interests.

    At least we've got the SEP. I fund mine to the maximum allowable nearly every year. Even so, my effective federal tax rate was 38% last year.
     

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