Taxes on the rise, the time is soon!

Discussion in 'Community' started by wdlove, Dec 16, 2002.

  1. wdlove macrumors P6

    wdlove

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    Oct 20, 2002
    #1
    The lower 50% of American wage earners pay 4% of the nations taxes. The upper 50% of American wage earners pay 96% of the nations taxes, that's a combined family income of >$30,000/year, source Jay Severin.

    If both parties don't do something soon it will get worse for the upper 50%.

    http://moneycentral.msn.com/articles/tax/basics/10812.asp
     
  2. Backtothemac macrumors 601

    Backtothemac

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    #2
    Yes, is that a fair tax system?

    Sounds very democrat if you ask me.
     
  3. medea macrumors 68030

    medea

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    #3
    hmm, the only reason I clicked on this thread was because I thought it read "Texas on the rise, the time is soon!" which I thought was funny, but taxes are always on the rise when there is a republican in the office.......and that's not funny. Oh and I belive you meant to say democratic not very democrat.
     
  4. wwworry macrumors regular

    Joined:
    Mar 23, 2002
    #4
    Re: Taxes on the rise, the time is soon!

    That's weird. That figure you quoted was not in that article, probably becasue it is wrong. But I did get a real quote from the article:

    "Remember the Bush tax cuts? They made the problem worse, cutting lifetime taxes for older people but raising them for new taxpayers. The Bush tax cuts mean that newborn taxpayers will pay a lifetime rate of 18.65% (up from 17.7%)."

    Or I could do a wdlove:
    The Lower Class Will Eat Rich People's Babies
    http://entertainment.msn.com/news/article.aspx?news=109831
     
  5. Taft macrumors 65816

    Taft

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    #5
    There's always another side.

    Statistically that COULD be true, but statiistics can often be misleading.

    Lets say that the richest 25% of Americans make 75% of yearly income (that figure could be under-exaggerated...I'm relaying this from a NYTimes article I read a month or two ago...I can't get to their site to find it now :( ). Lets assume thats true.

    That means the bottom 75% of Americans only make 25% of the income every year. Lets assume a flat tax rate of 20% all Americans (unrealistic, I know, but go with it for a sec.). That works out to the bottom 75% of americans paying a quarter of the tax burden while only making a fifth of the income. Hmmmm.

    If we assume more realistic figures (like NO flat tax), the amount the lesser-off people pay comes down. But the underlying principle remains: the people at the bottom might pay less of total taxes BECAUSE THEY MAKE LESS OF THE MONEY!

    Edit(BTW-This post illustrates a couple principles...First, it shows how dumb assumptions can lead to dumb conclusions. Assume a 33% flat tax rate above, and my argument is blown. Second, a majority of people in this country do make far less money than a small minority. This fact is becoming more true rather than less. Many people, such as myself think this is a problem. My writing is becoming more confusing by the second. Time for bed.)

    Taft
     
  6. wwworry macrumors regular

    Joined:
    Mar 23, 2002
    #6
    Here's a quote I found on Jay Severin

    The name of Jay Severin's show, "Extreme Games," defines his politics. Jay is far right on virtually every issue not connected to getting laid. When it comes to getting laid, he is a libertarian. Jay is right-wing radio's answer to Wilt Chamberlain. No, not the basketball player, the self-aggrandizing stud.

    wdlove:
    Crap goes in.
    Crap comes out.
     
  7. jefhatfield Retired

    jefhatfield

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    #7
    oh, how the rich suffer so

    enter: violins

    i feel so sorry for them:rolleyes:
     
  8. Chad4Mac macrumors 6502

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    #8
    Re: Taxes on the rise, the time is soon!

    They contribute 4% of the total tax income but consume greater than 4% of the federal benefit generated by taxes (federal and state). Vise versa on the other fifty percent.

    To me this seems like a problem.

    I'll ask a question:

    What would happen if the 50% of the population that pays the 75% of the total amount of taxes got fed up with this. Say they stopped working. Rebelled. All the lawyers, vice presidents, controllers, ceo's, cfo's...where would this country be?

    How would the lower fifty benefit?

    Just a question, and actually there is a book that wrote about the elite players in the american economy quiting work. Forget what it is called.

    I think the country would sink like a stone...

    Chad4Mac
     
  9. jefhatfield Retired

    jefhatfield

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    #9
    Re: Re: Taxes on the rise, the time is soon!

    interesting scenario

    it kind of reminds me what i thought would happen to the former soviet union when they dropped communism

    i thought, for one, their olympic team would fall apart and they would no longer get medals since i thought a lot of their earlier success was due to a soviet state funding them

    as it turns out, the russians, even minus the separate nations that sprung off of them, still rock in the olympics
     
  10. 3rdpath macrumors 68000

    3rdpath

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    #10
    Re: Taxes on the rise, the time is soon!

    if i'm reading this correctly it states that those families with a combined income of 30k and above are in the upper 50% income bracket and pay 96% of taxes....

    if so, .....are you suggesting shifting more of the tax burden to those families barely surviving on 30k? i'm just not sure what the problem is here. the people who have more income should pay more taxes...pretty simple.

    the linked article really discusses any entirely different issue...nothing new, just that the government has limited financial resources to pay the expanding costs of future social programs. today's answer is to expand future tax rates..tomorrow's more practical answer will be to change the nature of the social programs and redesign the government's spending patterns. everyone who screams that social security will collapse hasn't dealt with the reality that every politician is scared ****less of the incredibly harsh reaction from the graying masses...can you imagine telling millions and millions of people that the money they paid into SS during their entire working life is no longer available to them? DC would be burned and looted within days. i'm not saying the future is pretty, i'm just saying it'll get worked out. too bad there isn't a proactive and preemptive brain in washington for things non-militery.
     
  11. jefhatfield Retired

    jefhatfield

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    #11
    Re: Re: Taxes on the rise, the time is soon!

    kind of scary that bush lost two financially related cabinet members recently

    the dems will get bush in two years with the same phrase, "it's the economy, stupid"

    when will the gop learn?
     
  12. 3rdpath macrumors 68000

    3rdpath

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    #12
    Re: Re: Taxes on the rise, the time is soon!

    of course the lower 4% consumes more of the social programs....they NEED the social programs...think about it.

    the answer to your rhetorical question is...let 'em quit...they'd find out just like everyone else how easily they can be replaced...its just safer and easier to bitch and moan.
     
  13. mcrain macrumors 68000

    mcrain

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    #13
    Hey, a topic a know a little about...

    Rather than getting into too much of a debate, let me just point out one thing. Every discussion about taxes invariably has conservatives lamenting the over-taxation of the so called "wealthy." They talk about how unfair it is that the "wealthy" pay so much more of the tax burden than the "poor."

    I don't want to get into the policy behind taxation in general, but what I would like to point out is that there is one BIG BIG point that the conservative argument never points out.

    They are ONLY talking about FEDERAL INCOME TAX. Yes, when you only look at federal income tax, the wealthy pay a larger share than the poor. The federal income tax system is a tiered progressive taxation scheme. (As a side note, don't forget that when you are uber wealthy, you can control when and how much income you receive annually)

    So grasshopper, do you want to know why is that important?

    It is important because:

    Social Security taxes, FICA, etc... all have a cap. As such, overall, those taxes are regressive.

    Excise taxes are by the very nature regressive. There are only so many cigarettes or booze that a person can consume.

    Sales taxes are also regressive for the same reason. Certainly, the wealthy can afford more and better tv's, cars, etc..., however, as a percentage of income, the amounts paid in sales taxes by the wealthy are a smaller percentage than the amounts paid by the poor.

    Lottery tickets are a source of revenue for the various states. They are sold primarily to the poor. That's another regressive tax.

    Property taxes, when the amounts paid are examined as percentage of income, are also regressive.

    Finally, the poor's income is primarily wages. Wages require SS, FICA, etc... withholding, and on top of that, are taxed as ordinary income. The wealthy often have capital gains, primarily long term. These gains are taxed at lower rates. These gains can be timed and can be offset by losses, and witholding isn't required.

    When you really look at the percentage of income paid in taxes paid by everyone in the US, what you find is that the amounts of taxes paid are relatively flat across the spectrum of income ranges (there are bumps and dips).

    So grasshopper, whenever you hear democrats talking about how the rich need to pay more, or the republicans talking about how unfair the tax system is, just remember that the talking heads for both parties are generally idiots when it comes to taxes.

    (I watched a debate between the two leading tax policy people for both parties when I was in law school. I was shocked at the things they were saying that were just patently wrong. I asked my professor the next day, and his response was that after having had one semester of tax law, I was more of a tax expert than the "professionals" on TV.)
     
  14. Chad4Mac macrumors 6502

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    Los Angeles
    #14
    Re: Re: Re: Taxes on the rise, the time is soon!

    Replaced by who? The working class citizen (not being negative toward a working class person, just a question)? Can you place a hard working iron worker or other working class citizens in the desk of a CPA, CEO, CFO, Wall Street Analysis, or consultant's desk. Working class citizens don't specialize in this line of work.

    Where would "96%" of federal taxes come from? The social programs that the lower 50% would need could not survive. The country would be face with serious problems; replacement wouldn't be as easy as one would think.

    Chad4Mac
     
  15. rainman::|:| macrumors 603

    rainman::|:|

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    iowa
    #15
    thank god no one votes libertarian, we'd be in danger of having taxes done away with and replaced with per-use user fees on everything, and foreign aid would be privately funded... its almost like the government would be fair... we should stick to the same antequated parties because they're very old and we're all afraid of change...

    :)
    pnw
     
  16. mcrain macrumors 68000

    mcrain

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    Illinois
    #16
    While I'm not against the idea of taking a closer look at the per-use idea, everything I've seen so far shows that sort of proposal to be extremely regressive where the lions share of the tax burden would fall on the lower-middle classes. If there is a way to make it fair and even, then hey, I'll vote for a libertarian who can convince me of its fairness.
     
  17. peter2002 macrumors 6502

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  18. wdlove thread starter macrumors P6

    wdlove

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    #18
    Jay Severin believes in the Constitiution, would hope all Americans would. The perversion of the Constitiution is why we are in trouble today.
     
  19. drastik macrumors 6502a

    drastik

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    #19
    Sorry, this is a long one.

    The problem with higher taxation on higher incme is that it creates a penalty for being rich. Working hard and thinking of the future are what get you rich in the first place. A graduted tax, as it works now, is a penalty for success.

    Think of the death tax. Everyone is expempt from estate tax up to a million dollars. Therefore only the rich get hit with this tax, which is something like 49%, ectremely high anyway. But guess what, the rich have already paid taxes on this money, probably more than once. First there is income tax, then capitol gains tax, in states like Tennessee you have a local capital gaines tax that isn't deductable. So you've paid taxes on this money three times. Then you have the nerve to die. Guess what, they are going to take aou half of whats left. And of course, your children will have to pay taxes on any money you might have left.

    Ridiculous.

    Tax cuts are good, if they are employed wisely. I am about as liberal in most thins as they come, but I work for the government and I see misspending everywhere I turn. If we had a better run and administered system, we could cut taxes with abandon and still provide vital services ( maybe even have healthcare.)

    If some one, at ae twenty-five, put two hundred dollars a month into a mutual fund that gets a paltry 4% average return over the next 40 years, they would have over two million dollars when they are sixty-five. Capital gains and income will take a chunk because you get taxed after a hundred in contribution to a mutual or an IRA. So, ou saved what was left after Fed and Fica and local income taxes, then you've paid taxes again for making money by being smart. You might live well for ten or fifteen years with the less than a million dollars you have left, but you kids aint getting squat.
     
  20. drastik macrumors 6502a

    drastik

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    #20
    Severin would do away with half the Bill of Rights if he had his way. Man it steams me when Conservatives start saying that they love the constitution, then they drop it when it doesn't go their way.

    Severin doesn't know what hes talking about anymore than you do, or me for that matter. Have you ever actually met a talk radio host? For the most part they are crass, sexist men with no education in the subjects they lectutre on about.
     
  21. Stelliform macrumors 68000

    Stelliform

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    #21
    This is especially true if you own a small business. Having a million in assets is pretty easy to do in a small business.I probably have $40 to $50k in assets in my small biz, and I have gross reciepts of over $100k anually. Really small potatoes in the world of business. After I pay my employees, and my expenses there is a little left for me. However, I hope to slowly grow my business, and by the time I die, (hopefully 40 years from now) I will have substancial assets in the business.

    Her comes the kicker. Lets say that I have 30 employees, have 1.1 Mil in assets and I kick the bucket. (And me and My accountant didn't prepare for me dying) Current plan has my kids paying $500k. They don't have $500k. (remember, most of the income in my Biz goes to the employees, and capital improvements) So they sell off the assets of the company to pay the $500k and put 30 people of out work.

    According to the plan the Gov made money, however they just lost the income tax from 30 people, who are now on unemployement. Depending on how much they were getting paid, this could easily eat up the $500k the gov recieved from the death of me.

    There is/was an effort to exclude Small Businesses from the tax, however I am not sure where this stands. :(
     
  22. SPG macrumors 65816

    SPG

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    #22
    mcRain, thanks for the informative and realistic post. It's nice to have someone around who actually works in the field weigh in.
    McRain, what about this "death tax"? How much is true. I've heard the spin on both sides and the one that I tend to believe a little more is that the vast majority of people are excluded from this tax, even the wealthy.

    I guess what's really going on here is that the republican party is trying to get this ridiculous idea that the poor are undertaxed repeated so many times that eventually it will be accepted. Then we will see another shift of the taxes away from the rich and on to the backs of the poor, and the future generations that will also be poor because of it.

    Chad, you ask what would happen if the CEO's quit? Let them. They've been moving all the jobs overseas, they've been getting cozy deals and handouts from Washington, and now who is going to pay the bill? Not the CEO's anymore, nope it's going to be those greedy tax dodging poor people!
     
  23. Chad4Mac macrumors 6502

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    #23
    I'm not quite sure if you are serious or not? Are you?

    Well, anyway, the CEOs haven't moved the jobs overseas, economics has. Private and public owned companies benefiting from capitalism in the United States, plus the fact that you have a open world economy (in the majority of the world's countries), push unskilled, labor-intensive jobs overseas -- where the cost per unit of production is lowest. For the end-user or consumer, we benefit my observing lower prices at the check-out stand. For the workers (who potentially lost their job to the overseas worker), they benefit in the long run -- by specialing in skilled labor which provides a larger wage. The economy as a whole is better off, here, and abroad.

    Cozy deals and handouts from Washington, aye. What ever happened to working hard, and getting compensated for it. You think that these CEOs get cozy deals because they don't work hard and have been slacking off. If this were the case, they would have been fired a long time ago -- way before they could see the cozy deal. The shareholders of the company would have him on a stick.

    Not stoked when Washington bails out companies -- except when the consumer would really get impacted , like with energy supply.

    It's very simple to blame everything on rich and the hard working.

    YOu still haven't answered the question, or even though about the implications of my first question (see about post). What would happen to the US economy if all the CEO type people quit, or got fed up?


    Chad4Mac
     
  24. SPG macrumors 65816

    SPG

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    #24
    I haven't answered because it's a ludicrous question to begin with!
    What would happen if all the machinists quit? the nurses? the janitors? The used car salesmen? Traffic cops? DEA agents? Veterinarians? Electricians?
    Come up with a real scenario please.
    Ahh fuggit, I'll indulge your nightmare/my utopia for a moment...
    An alien ship flies in and vaporizes every CEO of every company, poof! gone.
    The factories would stil run, the workers would still work as long as middle management was there. Without CEO's there would be a lack of long term planning and strategic investment opportunity evaluation and pro-active decision making principles implemented in retaining highest benefit valuations of the global market capitalization....yada yada yada. In other words, there would be less major moves by companies that affect there stock valuations, but the day to day routines would go on. Now that you mention it, I think it's a great thing! No more seeking out which factory to close and how to move jobs overseas to save money, no more accounting shenanigans to boost stock prices, and think of the money saved in bloated CEO bonuses and salaries. In the long run perhaps less growth of the biggest and unwieldliest of the corps, but there would still be innovation and new discoveries.
     
  25. SPG macrumors 65816

    SPG

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    #25
    Go to Flint MI, or any of the (former) steel towns and tell them this. I'm sure they'll be stoked to realize how much better off they are now.

    F--- you and your hard work! You don't think that anyone else is working hard? Ever work manual labor for minimum wage? Ever live where your net worth was in the negative and the only job opportunities are low paying with no future and even then, there aren't too many of them?
    Go down to Mexico and check out the living conditions of the average family working at a maquilladora.
     

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