One phrase that I hear out of the mouths of politicians, mainly liberals is that the "rich" don't pay their "fair" share of income taxes.
Here is an article that describes how taxes are paid and by whom.
Here is a chart that breaks it down.
In a nutshell, the top 3/5 of income earners are the ones that actually pay taxes. The bottom 2/5 actually
get paid when it comes to the tax system. In my mind, I would probably consider the middle class to have an annual household income of around $50,000 to around $120,000. The top 1/5 of income earners (those earning above $134,300) shoulder most of the burden at 83.9% of income taxes paid. The rest of taxes actually paid falls on what I consider the middle class that I just described.
After writing my check to send to the IRS tomorrow, I as usual started to get a bit ticked off that people seem to think that this system, or one like it is actually "fair". My income group ($79,500 - $134,300) shoulders the next highest portion of taxes paid at 13.4%. I am by no means a rich guy, but I live comfortably.
One proposal that has come up is the Fair Tax Act. This proposal is continuously shot down by liberals because it would "burden" lower income people. This is a consumption tax that would tax based on what you spend vs. what you earn. I happen to like this proposal because it would encourage saving and yet still bring in the same amount of revenue that we currently put on the upper and middle classes.
Keep in mind, we are only talking income tax here. The Fair Tax would eliminate the income tax, and those that earn no income (ie. those that are wealthy that don't work, but survive off of dividends) would actually be contributing. Also, those that "earn" their money illegally (ie., illegal immigrants, prostitutes, drug dealers, etc.) would also be forced to contribute to the system. Finally, because it is a consumption tax, foreign visitors would also be putting some into the system.
YES the Fair Tax is an excellent step in the right direction, I 100% support it. And note I'm not anywhere near the top income bracket paying high taxes.
As for the notion it will hurt the poor, all someone has to do is look into the Fair Tax and they'll see there are pre-bates to help offset that burden available for the working poor. But I absolutely agree 1000000000% we have to shift away from a production tax to a consumption tax.
I like the idea of the Fair Tax but I admit I know little about it's specifics. I think the problem people have at, least it's my problem, is when you see tax rates that are in the low single digits or nothing for major corporations or the very wealthy. My tax rate is near 20% not counting state Tax. That is what makes me people upset. The idea that lower incomes pay higher total percentages. At the same time I understand the complaint that the wealthy pay more in dollars.
A question I always ask liberals...... How is taxing someone $1 more than you helping you? The rich pay more than their far share when it comes right down to it. And I say End the Death Tax while we're at it..........
Quote:I like the idea of the Fair Tax but I admit I know little about it's specifics. I think the problem people have at, least it's my problem, is when you see tax rates that are in the low single digits or nothing for major corporations or the very wealthy. My tax rate is near 20% not counting state Tax. That is what makes me people upset. The idea that lower incomes pay higher total percentages. At the same time I understand the complaint that the wealthy pay more in dollars.
The Fair Tax is more about changing how the taxes are collected. The sponsors have even said the rate might have to change or even have different rates for different purchases but it's about changing how we collect. For example having a consumption tax makes the economic black market null and void. I don't care if they're illegals making an illegal wage, making money off the narcotics sector, prostitution, when they spend that income taxes are collected.
What's funny about this is what is defined as "rich".
If you look at the threshold for household incomes that are in that top 20%, the family income is $91,000. That's not rich unless we've taken a trip back to the 1980s.
The middle class is getting hammered by taxes despite being the income group that is practically disappearing under our income redistribution loving president. He talks a good game, but the level of disparity between haves and have nots has grown at a faster rate under his watch than at any other time in history. I'm sure there's a way he can try to blame it on Bush. That seems to be the only strategy that matters, and his supporters sure like to harken back to Bush all the time. God knows they don't want to deal with the present or admit how utterly failed this administration is.
Quote:The Fair Tax is more about changing how the taxes are collected. The sponsors have even said the rate might have to change or even have different rates for different purchases but it's about changing how we collect. For example having a consumption tax makes the economic black market null and void. I don't care if they're illegals making an illegal wage, making money off the narcotics sector, prostitution, when they spend that income taxes are collected.
I don't understand how it eliminates the black market economy. If they just buy more black market goods, which arise because over high taxation, how to taxes get collected on those? Or was that not really your point.
I guess we're considered lower middle class but we struggle. And what's sad is we have no mortgage and no car payments. But we are taxed out the butt here in NC for every single thing. Not to mention we have state income tax here. Which apparently most of us are owing the state this year. We tried to make it to where the most money possible stays in our pocket monthly as opposed to a check once a year, but somehow we still 'loan' the government enough money that we get money back, aside from state this year.
And the the dollar in NO WAY goes as far as it used to.
Don't even get me started......
Quote:I don't understand how it eliminates the black market economy. If they just buy more black market goods, which arise because over high taxation, how to taxes get collected on those? Or was that not really your point.
The way they do it in Taiwan is, cash registers are connected to the national lottery. Every receipt doubles as a lottery ticket. That makes customers demand receipts, and that keeps merchants from making unrecorded transactions. It's an ingeniously simple system.
Quote:What's funny about this is what is defined as "rich".
If you look at the threshold for household incomes that are in that top 20%, the family income is $91,000. That's not rich unless we've taken a trip back to the 1980s.
The middle class is getting hammered by taxes despite being the income group that is practically disappearing under our income redistribution loving president. He talks a good game, but the level of disparity between haves and have nots has grown at a faster rate under his watch than at any other time in history. I'm sure there's a way he can try to blame it on Bush. That seems to be the only strategy that matters, and his supporters sure like to harken back to Bush all the time. God knows they don't want to deal with the present or admit how utterly failed this administration is.
It's cute watching you do the exact same thing you chastise other people for. It's not Bush it's Obama. Bush isn't the worst because it's Obama....
Was it shrinking under Bush? I doubt very much so. I don't even know this to be true but I bet for many decades that it's been increasing and the rate of increase has been increasing and will keep increasing into the future. It's the nature of the haves to want more and have more access to get more. The strategy the right seems to propose is to cut taxes for the wealthy but not the middle class... How exactly does that help people making at or less than that 91k/year? So what's the actual solution that does not effect those it's supposed to help?
Quote:The way they do it in Taiwan is, cash registers are connected to the national lottery. Every receipt doubles as a lottery ticket. That makes customers demand receipts, and that keeps merchants from making unrecorded transactions. It's an ingeniously simple system.
That.... is such an elegant solution.
Quote:It's cute watching you do the exact same thing you chastise other people for. It's not Bush it's Obama. Bush isn't the worst because it's Obama....
Was it shrinking under Bush? I doubt very much so. I don't even know this to be true but I bet for many decades that it's been increasing and the rate of increase has been increasing and will keep increasing into the future. It's the nature of the haves to want more and have more access to get more. The strategy the right seems to propose is to cut taxes for the wealthy but not the middle class... How exactly does that help people making at or less than that 91k/year? So what's the actual solution that does not effect those it's supposed to help?
The disparity between the "haves" and the "have-nots" has been growing, and it did grow under the Bush Administration, but the point is, it accelerated under the Obama Administration.
Consider this. My income has been pretty steady between 2008 and now, despite changing jobs a couple of times (I am a Government Contractor, so my income depends on which contract I am working on). I have received periodic cost-of-living raises during that period. However, my income tax burden has increased in that period. During that period and thanks to Obamacare, I had to purchase a "compliant policy" rather than what I had in order to avoid being penalized. That has led to a reduction in my effective take home pay. Health insurance policies aren't cheap, and because of my income I don't qualify for any subsidies.
The strategy of the right includes cutting taxes for people like me, what you call "rich". If you look at the chart that I linked to in the first post, I am not far from being in the upper 20% of income earners. As I said before though, I am far from what I would consider "rich" when it comes to income or money.
Quote:The way they do it in Taiwan is, cash registers are connected to the national lottery. Every receipt doubles as a lottery ticket. That makes customers demand receipts, and that keeps merchants from making unrecorded transactions. It's an ingeniously simple system.
I didn't know that but it's a brilliant solution.
.gif "Laughing")
Quote:I don't understand how it eliminates the black market economy. If they just buy more black market goods, which arise because over high taxation, how to taxes get collected on those? Or was that not really your point.
I should've said it eliminates tax free income from the black market. Eventually that money is spent at legitimate establishments generating the tax revenue (listen to me advocating tax revenue) If someone is making $1000 a week cash under the table that tax revenue is never collected in a production tax, in a consumption tax that revenue is collected when the $1000 is spent.
Quote:The disparity between the "haves" and the "have-nots" has been growing, and it did grow under the Bush Administration, but the point is, it accelerated under the Obama Administration.
Consider this. My income has been pretty steady between 2008 and now, despite changing jobs a couple of times (I am a Government Contractor, so my income depends on which contract I am working on). I have received periodic cost-of-living raises during that period. However, my income tax burden has increased in that period. During that period and thanks to Obamacare, I had to purchase a "compliant policy" rather than what I had in order to avoid being penalized. That has led to a reduction in my effective take home pay. Health insurance policies aren't cheap, and because of my income I don't qualify for any subsidies.
The strategy of the right includes cutting taxes for people like me, what you call "rich". If you look at the chart that I linked to in the first post, I am not far from being in the upper 20% of income earners. As I said before though, I am far from what I would consider "rich" when it comes to income or money.
Even if you qualified for the subsidies I'd advise you not to take them. Plenty of people don't know but those subsidies are tax credit advances, if for any reason when the taxes that following year roll around they decided you where given to much of an advance or God forbid you don't really get the tax credit for whatever reason you now OWE that money to the IRS.
For example I qualified for a $500 something dollar tax credit towards an insurance premium if we signed up under the ACA. I read all the fine print and it said clear as day, that $500 something dollar subside was a loan from the IRS to be paid back by the tax credit to be determined when I filled the following year. So in other words if I use that $500 a month credit at the end of the year I've "borrowed" $6,000 from the IRS to pay insurance premiums that year. When I file taxes so long as there's a $6000 credit for me I'm good, if for ANY reason there's no $6000 credit I owe them that money.
What's to stop them from saying you know those subsidies are going to cost to much this year, we're going to half the tax credit this year. I don't have nearly enough faith in the system to accept any kind of advance on a future tax credit.
I'll pay the penalty and wait it out a little longer to see how this all shakes out. A $6000 tax bill would ruin me.
Quote:I guess we're considered lower middle class but we struggle. And what's sad is we have no mortgage and no car payments. But we are taxed out the butt here in NC for every single thing. Not to mention we have state income tax here. Which apparently most of us are owing the state this year. We tried to make it to where the most money possible stays in our pocket monthly as opposed to a check once a year, but somehow we still 'loan' the government enough money that we get money back, aside from state this year.
And the the dollar in NO WAY goes as far as it used to.
Don't even get me started......
I know your pain. Been there done that. With age and kids growing up and moving out, it gets easier. Can you believe that we (me and my wife) were once able to survive on E-4 pay from me and her working as a Manager at McDonalds? At the time we had all three of our children in the house, and yet we were able to scrimp and save to buy our first home. (This was back in the early 1990's).
We probably couldn't afford that house today because it's probably worth a heck of a lot more now.
However, we did make a few "smart" (lucky) decisions during the run up of the dot-com bubble, and that enabled us to "move up".
Without disclosing too much personal information, I will say that a portion of our income goes to supporting family members financially, so cash flow is something that I watch.
Quote:The disparity between the "haves" and the "have-nots" has been growing, and it did grow under the Bush Administration, but the point is, it accelerated under the Obama Administration.
Consider this. My income has been pretty steady between 2008 and now, despite changing jobs a couple of times (I am a Government Contractor, so my income depends on which contract I am working on). I have received periodic cost-of-living raises during that period. However, my income tax burden has increased in that period. During that period and thanks to Obamacare, I had to purchase a "compliant policy" rather than what I had in order to avoid being penalized. That has led to a reduction in my effective take home pay. Health insurance policies aren't cheap, and because of my income I don't qualify for any subsidies.
The strategy of the right includes cutting taxes for people like me, what you call "rich". If you look at the chart that I linked to in the first post, I am not far from being in the upper 20% of income earners. As I said before though, I am far from what I would consider "rich" when it comes to income or money.
Their cuts do not seem to go down very far in a way that effects the middle class. It seems like they have succeeded in changing the definition of middle class. I consider myself middle class and have heard of no right wings proposals to lower my tax burden at all.
Quote:I should've said it eliminates tax free income from the black market. Eventually that money is spent at legitimate establishments generating the tax revenue (listen to me advocating tax revenue) If someone is making $1000 a week cash under the table that tax revenue is never collected in a production tax, in a consumption tax that revenue is collected when the $1000 is spent.
I see. yeah that makes good sense right there.
I've long supported the idea of eliminating income tax entirely at all levels and replacing it with a much higher sales tax. Say, 23% federal sales tax with up to an additional 10% permissible by states (current county/city sales taxes are grandfathered in). A system like that would accomplish a few key goals:
1. Eliminate income tax fraud, and make it just short of impossible for people to hide from taxes.
2. Encourage fiscal responsibility: buying a $40,000 car will cost you $3,300 more in taxes than a $30,000 car would. That sort of hard number might prompt people to buy within their means rather than taking out a second mortgage on their condo to get a car that they can't afford their payments on anyway.
3. Ensure that people are contributing more or less equally to the tax system. You'll always have the millionaire who buys a Ford Focus, but by and large, people will spend to or slightly above the level that they can afford. The guy making $250,000 per year that buys a Ferrari will pay much more in tax than the guy making $50,000 a year who buys a Camry.
It's not a perfect system, but going away from income tax and moving to a sales tax-based system instead would solve a lot of the problems we have now.
Quote:The disparity between the "haves" and the "have-nots" has been growing, and it did grow under the Bush Administration, but the point is, it accelerated under the Obama Administration.
Consider this. My income has been pretty steady between 2008 and now, despite changing jobs a couple of times (I am a Government Contractor, so my income depends on which contract I am working on). I have received periodic cost-of-living raises during that period. However, my income tax burden has increased in that period. During that period and thanks to Obamacare, I had to purchase a "compliant policy" rather than what I had in order to avoid being penalized. That has led to a reduction in my effective take home pay. Health insurance policies aren't cheap, and because of my income I don't qualify for any subsidies.
The strategy of the right includes cutting taxes for people like me, what you call "rich". If you look at the chart that I linked to in the first post, I am not far from being in the upper 20% of income earners. As I said before though, I am far from what I would consider "rich" when it comes to income or money.
Who's calling top 20% rich? My wife and are lower middle class (probably less considering we have 5 children). It's the Top 1% that's rich (people making $430,000/year or more)
My wife and I make a decent amount of money. Probably would be considered lower middle class. We're not so great at saving money though, because we have five children. I think Fair Tax sounds like an okay idea, but I'm not sure about the execution. It would certainly affect spending habits, which in turn would affect the rate of Fair Tax. Of course for me, I used the fair tax calculator and found that my wife and I would be paying FAR more in taxes than we are now. I'm sure it'd save some people money, though I wonder just how much.