New tax plan shifts higher taxes onto lower waged workers

[Triumph]

Originally posted by: n0cmonkey

Originally posted by: thebestMAX
Great, now we are going to hear the 1% of 20k vs the 1% of a million argument. :frown:

See previous post, it wasnt available when I posted this. Good one!!

Just a question because I dont follow taxes much (my blood pressure is high enough), but what is the problem with everyone paying the same percentage? Is that somehow unfair to the people that make more money? Is it unfair for the people that make less money? Because one person works harder in life and gets a better job he is somehow more responsible for the nation's money situation? I dont understand.

(You may have said this sarcasticly and Im too dumb to pick up on it, which is a common occurance, but if you are you may be able to mention the arguements used against this situation. 🙂)

It's called progressive tax, the idea is that richer people can afford to pay more taxes and still live comfortably. A very simplified example: It costs 5 dollars a day to eat and stay sheltered. Person A makes 8 dollars a day. Person B makes 20 dollars a day. If you set the tax at 50%, person A doesn't even make enough to live, while person B can pay his $10 tax, $5 food, and have $5 left over.

So to make sure person A eats, you charge him 30% tax, but increase person B to 60% tax. The gub'ment still gets its $14, but now both people can eat.

The basic idea is that basically (and I do mean basically), the necessities of life cost the same for everyone.

 

[FeathersMcGraw]

Originally posted by: Zakath15

If you pay nothing into supporting a system of government, is it not true you will do nothing to protect it? If you care about this country, put your money where your mouth is.

Your logic is backwards. People don't derive civic pride based on their tax burden, but they might kvetch less about paying taxes if they were fervent nationalists.

Consider how many people in the U.S. fail to perform their civic duty by voting. That's free. Do you think voter turnout would rise if people had to pay to enter the polls?

 

[Viper GTS]

Originally posted by: Triumph

Originally posted by: n0cmonkey

Originally posted by: thebestMAX
Great, now we are going to hear the 1% of 20k vs the 1% of a million argument. :frown:

See previous post, it wasnt available when I posted this. Good one!!

Just a question because I dont follow taxes much (my blood pressure is high enough), but what is the problem with everyone paying the same percentage? Is that somehow unfair to the people that make more money? Is it unfair for the people that make less money? Because one person works harder in life and gets a better job he is somehow more responsible for the nation's money situation? I dont understand.

(You may have said this sarcasticly and Im too dumb to pick up on it, which is a common occurance, but if you are you may be able to mention the arguements used against this situation. 🙂)

It's called progressive tax, the idea is that richer people can afford to pay more taxes and still live comfortably. A very simplified example: It costs 5 dollars a day to eat and stay sheltered. Person A makes 8 dollars a day. Person B makes 20 dollars a day. If you set the tax at 50%, person A doesn't even make enough to live, while person B can pay his $10 tax, $5 food, and have $5 left over.

So to make sure person A eats, you charge him 30% tax, but increase person B to 60% tax. The gub'ment still gets its $14, but now both people can eat.

The basic idea is that basically (and I do mean basically), the necessities of life cost the same for everyone.

So increase the threshold for taxable income.

Viper GTS

 

[Orsorum]

Originally posted by: Triumph

Originally posted by: n0cmonkey

Originally posted by: thebestMAX
Great, now we are going to hear the 1% of 20k vs the 1% of a million argument. :frown:

See previous post, it wasnt available when I posted this. Good one!!

Just a question because I dont follow taxes much (my blood pressure is high enough), but what is the problem with everyone paying the same percentage? Is that somehow unfair to the people that make more money? Is it unfair for the people that make less money? Because one person works harder in life and gets a better job he is somehow more responsible for the nation's money situation? I dont understand.

(You may have said this sarcasticly and Im too dumb to pick up on it, which is a common occurance, but if you are you may be able to mention the arguements used against this situation. 🙂)

It's called progressive tax, the idea is that richer people can afford to pay more taxes and still live comfortably. A very simplified example: It costs 5 dollars a day to eat and stay sheltered. Person A makes 8 dollars a day. Person B makes 20 dollars a day. If you set the tax at 50%, person A doesn't even make enough to live, while person B can pay his $10 tax, $5 food, and have $5 left over.

So to make sure person A eats, you charge him 30% tax, but increase person B to 60% tax. The gub'ment still gets its $14, but now both people can eat.

The basic idea is that basically (and I do mean basically), the necessities of life cost the same for everyone.

I always laugh at this argument.

You're talking to a guy whose mother spent her childhood in a family of 15 children, working a farm, supported by only their mother. They still paid taxes. (despite not having enough money for shoes)

Regardless of how poor you are, you still use the roads, you use public services, you're defended by the military. All of these cost money; you are not somehow "entitled" to them.

 

[Orsorum]

Originally posted by: FeathersMcGraw

Originally posted by: Zakath15

If you pay nothing into supporting a system of government, is it not true you will do nothing to protect it? If you care about this country, put your money where your mouth is.

Your logic is backwards. People don't derive civic pride based on their tax burden, but they might kvetch less about paying taxes if they were fervent nationalists.

Consider how many people in the U.S. fail to perform their civic duty by voting. That's free. Do you think voter turnout would rise if people had to pay to enter the polls?

It would be interesting to see how voter participation varies by income bracket.

 

[Heifetz]

The neccessities of life may be cost the same, but the cost of living for a rich is probably a heck of a lot more than the poor because the sales tax on a BMW is a heck of a lot more than the same tax on a Ford. So from the higher cost of living, the rich does pay more non-income taxes as well. So wouldn't it be fair to just have a flat income tax (lower for everyone) and increase the other taxes, so people are taxed on how much they spend, not how much they make.


Heifetz

 

[n0cmonkey]

Originally posted by: Triumph

Originally posted by: n0cmonkey

Originally posted by: thebestMAX
Great, now we are going to hear the 1% of 20k vs the 1% of a million argument. :frown:

See previous post, it wasnt available when I posted this. Good one!!

Just a question because I dont follow taxes much (my blood pressure is high enough), but what is the problem with everyone paying the same percentage? Is that somehow unfair to the people that make more money? Is it unfair for the people that make less money? Because one person works harder in life and gets a better job he is somehow more responsible for the nation's money situation? I dont understand.

(You may have said this sarcasticly and Im too dumb to pick up on it, which is a common occurance, but if you are you may be able to mention the arguements used against this situation. 🙂)

It's called progressive tax, the idea is that richer people can afford to pay more taxes and still live comfortably. A very simplified example: It costs 5 dollars a day to eat and stay sheltered. Person A makes 8 dollars a day. Person B makes 20 dollars a day. If you set the tax at 50%, person A doesn't even make enough to live, while person B can pay his $10 tax, $5 food, and have $5 left over.

So to make sure person A eats, you charge him 30% tax, but increase person B to 60% tax. The gub'ment still gets its $14, but now both people can eat.

The basic idea is that basically (and I do mean basically), the necessities of life cost the same for everyone.

It seems like less of an incentive to work harder. I can work just hard enough to get by, or get by and have a little left over instead of working twice as hard and being in the same place.

Also, certain areas of the country are more expensive to live in. $50,000/year here in DC is not the same as $50,000/year in the middle of the country. If I end up paying 50% in taxes while someone who makes $25,000 a year only pays 5% I end up with just a little more than they do. I admit, its an extreme example.

Another question (a very American one at that) is: What does my extra money get me? What benefits do I get for paying more taxes than someone that pays less taxes? Do I get more social security when I retire (not that it will be around then)? Do my votes count more? Does the army protect me first in an invasion? Will the congressmen listen to me over someone with less money? What motivation do I have to work harder?

 

[Triumph]

I was simply explaining the theory to him, because he said he honestly didn't know. I didn't say it was right or wrong.

Again, note the emphasis on basically, please. A loaf of bread and a gallon of milk cost the same for rich and poor.

 

[BoberFett]

I've said it before and I'll say it again. And again. And again.

The answer is a flat income tax, with a basic deduction per dependent.

For examples:

15% tax, $6k standard deduction

Family of four, two parents each make $15k = $30k - (4 * $6K) = $6k * 15% = $900

Single person, $80k, $20k in stock = $100k - $6k = $94k * 15% = $14.1k

I'd be perfectly fine with this system. Mostly because then there's no argument that the rich get rich because of "tax loopholes". Let's end this myth that people who make more than you do don't pay taxes.

 

[WinkOsmosis]

Originally posted by: Viper GTS
While it may sound great to you to re-distribute wealth down to the poor, what you are suggesting is SOCIALISM.

If you want money, work for it. There is absolutely nothing preventing you from being among the wealthy.

Just don't be surprised to have to fight to keep it once you are, there are generations coming up behind you who will want the same thing you want now.

Viper GTS

Bullsh!t. Wealth breeds wealth. A poor person does not just become rich through hard work. It doesn't work that way now that our economy has matured.

 

[BaliBabyDoc]

Here's what you do . . .

Create a threshold and remove the arbitrary cap on FICA: Exempt the first 40-50K of family income from all sources and then set the soft cap at whatever it takes to balance the loss from giving everyone a tax cut. Current FICA limit is $87,000.

To be business friendly you drop employer FICA at the soft cap.

Since most well-off individuals get very little from Medicare (directly) you can end that contribution(1.45%) to the program at the soft cap and then phase out the rest of the employee FICA contribution (6.2%) as income increases.

To keep the system solvent you just raise (or lower) the soft cap.

Let's be honest SS and Medicare are generational systems of income redistribution and are somewhat responsible for the explosion in health care costs and taxes overall. They also keep mothers, fathers, and grandparents somewhat taken care of.

Then you reform the tax code . . . drop the crap load of social programming b/c it only makes it more complex. Again exempt the first 40-50K for everyone from all sources (including capital gains). And then flat tax for income with no ceiling.

So now everyone in the US pays ZERO tax for income below 50K from any source. The most regressive tax (FICA) is improved and the progressive yet overly complex tax code is reduced to flat tax. Of course the feds will retain the right to tax consumption. And most states will probably stick it to taxpayers since they know the feds are collecting less. But at least it's easier to get the local bastards when they rob you.

Inheritance: Exempt the first $5million of wealth transfer plus $1million per child and then flat tax (10-50%) pick a number. Inheritance should be adjusted annually for inflation. No exemption beyond this limit for family business or farms but allow up to 10yrs to pay the tax (payment plan in any form) plus the right to deduct the tax from subsequent earnings at 50%. The alternative would be to cut the tax rate in half and allow no deduction.

 

[n0cmonkey]

Originally posted by: Triumph
I was simply explaining the theory to him, because he said he honestly didn't know. I didn't say it was right or wrong.

Again, note the emphasis on basically, please. A loaf of bread and a gallon of milk cost the same for rich and poor.

It was a good basic explanation, thanks 🙂

 

[FeathersMcGraw]

Originally posted by: Zakath15

It would be interesting to see how voter participation varies by income bracket.

I'd be amazed if there wasn't an increase in voter participation at higher incomes. That being said, I don't think you'd be misattributing causality with your hypothesis. High income brackets pay higher taxes because they have high income, and they vote because they clearly have more at stake in the establishment of policy.

Conversely, at the extreme other end of the scale, you have people who won't vote because they exist outside the system. Homeless people don't have addresses or voting precincts. Even those hovering right around the poverty line likely have more important things to worry about, like how to keep making their rent payments, than spending a few hours in line to cast a vote which won't have any visibly correlative impact in their lives. This is just Maslow's hierarchy of needs at work -- if you're struggling to eke out an existence, abstract concepts like voting are a lot less important than eating and keeping warm.

 

[Orsorum]

Originally posted by: FeathersMcGraw

Originally posted by: Zakath15

It would be interesting to see how voter participation varies by income bracket.

I'd be amazed if there wasn't an increase in voter participation at higher incomes. That being said, I don't think you'd be misattributing causality with your hypothesis. High income brackets pay higher taxes because they have high income, and they vote because they clearly have more at stake in the establishment of policy.

Conversely, at the extreme other end of the scale, you have people who won't vote because they exist outside the system. Homeless people don't have addresses or voting precincts. Even those hovering right around the poverty line likely have more important things to worry about, like how to keep making their rent payments, than spending a few hours in line to cast a vote which won't have any visibly correlative impact in their lives. This is just Maslow's hierarchy of needs at work -- if you're struggling to eke out an existence, abstract concepts like voting are a lot less important than eating and keeping warm.

Or taking three minutes to fill out an absentee ballot?

 

[BoberFett]

Originally posted by: n0cmonkey
Another question (a very American one at that) is: What does my extra money get me? What benefits do I get for paying more taxes than someone that pays less taxes? Do I get more social security when I retire (not that it will be around then)? Do my votes count more? Does the army protect me first in an invasion? Will the congressmen listen to me over someone with less money? What motivation do I have to work harder?

Actually if you really looked into it, a person who makes more money probably does make greater use of the infrastructure that was put or is held in place by taxes.

Somebody who made a fortune off of the internet is doing it because DARPA originally laid out some money.

 

[Orsorum]

Originally posted by: Jellomancer

Originally posted by: Viper GTS
While it may sound great to you to re-distribute wealth down to the poor, what you are suggesting is SOCIALISM.

If you want money, work for it. There is absolutely nothing preventing you from being among the wealthy.

Just don't be surprised to have to fight to keep it once you are, there are generations coming up behind you who will want the same thing you want now.

Viper GTS

Bullsh!t. Wealth breeds wealth. A poor person does not just become rich through hard work. It doesn't work that way now that our economy has matured.

Haha, someone's having self-entitlement issues. Of course they do. I can look at my parents and know the truth of that axiom.

 

[UltraQuiet]

Originally posted by: BaliBabyDoc
Here's what you do . . .

Create a threshold and remove the arbitrary cap on FICA: Exempt the first 40-50K of family income from all sources and then set the soft cap at whatever it takes to balance the loss from giving everyone a tax cut. Current FICA limit is $87,000.

To be business friendly you drop employer FICA at the soft cap.

Since most well-off individuals get very little from Medicare (directly) you can end that contribution(1.45%) to the program at the soft cap and then phase out the rest of the employee FICA contribution (6.2%) as income increases.

To keep the system solvent you just raise (or lower) the soft cap.

Let's be honest SS and Medicare are generational systems of income redistribution and are somewhat responsible for the explosion in health care costs and taxes overall. They also keep mothers, fathers, and grandparents somewhat taken care of.

Then you reform the tax code . . . drop the crap load of social programming b/c it only makes it more complex. Again exempt the first 40-50K for everyone from all sources (including capital gains). And then flat tax for income with no ceiling.

So now everyone in the US pays ZERO tax for income below 50K from any source. The most regressive tax (FICA) is improved and the progressive yet overly complex tax code is reduced to flat tax. Of course the feds will retain the right to tax consumption. And most states will probably stick it to taxpayers since they know the feds are collecting less. But at least it's easier to get the local bastards when they rob you.

Inheritance: Exempt the first $5million of wealth transfer plus $1million per child and then flat tax (10-50%) pick a number. Inheritance should be adjusted annually for inflation. No exemption beyond this limit for family business or farms but allow up to 10yrs to pay the tax (payment plan in any form) plus the right to deduct the tax from subsequent earnings at 50%. The alternative would be to cut the tax rate in half and allow no deduction.

My question to those of you who advocate a flat tax no deduction type tax code is what do you think it would do to the housing industry if costs associated with owning a home were no loger deductible and how would it effect peoples desires to save money if they couldn't exempt money from IRA's and the like?

 

[BoberFett]

Originally posted by: Jellomancer

Originally posted by: Viper GTS
While it may sound great to you to re-distribute wealth down to the poor, what you are suggesting is SOCIALISM.

If you want money, work for it. There is absolutely nothing preventing you from being among the wealthy.

Just don't be surprised to have to fight to keep it once you are, there are generations coming up behind you who will want the same thing you want now.

Viper GTS

Bullsh!t. Wealth breeds wealth. A poor person does not just become rich through hard work. It doesn't work that way now that our economy has matured.

Define wealth.

Will a corn picker become the next Donald Trump? No. But it's very common for people in poverty who apply themselves and work hard to make a comfortable life for themselves.

But I'm talking to a brick wall here, Jellomancer.

I can tell that you're the kind of person who's glad we have poor people. You love class warfare and envy. It gives you a purpose in life. If there weren't poor people being trampled on "the rich", whose champion would you be?

 

[Orsorum]

I am reminded of some of these idealistic fools I see on campus protesting. You say that the class structure is destructive, that the rich man is holding the poor man down. I say you're lazy and afraid of taking risks.

I ask, who's paying for you to get this education? Your parents, maybe? People who scrimped, saved, sacrificed, all for you? Get up, get a real job, and make your parents proud of their progeny, instead of some idiotic loser who doesn't know how to make something of themselves.

 

[jahawkin]

From article:

which are expected to highlight what administration officials see as a rising tax burden on the rich and a declining burden on the poor.

The rich's tax burdon has been decreasing since the days of Reagan. In order to continue this trend, the administration is planning on "working up more sophisticated distribution tables that are expected to make the poor appear to be paying less in taxes and the rich to be paying more."
I really hope Bush does something like this, which is, in all reality, a tax cut for the rich and tax increases to the poor and middle class. It would give the Dems plenty of fodder for the 2004 campaign.

 

[Triumph]

Originally posted by: Jellomancer

Originally posted by: Viper GTS
While it may sound great to you to re-distribute wealth down to the poor, what you are suggesting is SOCIALISM.

If you want money, work for it. There is absolutely nothing preventing you from being among the wealthy.

Just don't be surprised to have to fight to keep it once you are, there are generations coming up behind you who will want the same thing you want now.

Viper GTS

Bullsh!t. Wealth breeds wealth. A poor person does not just become rich through hard work. It doesn't work that way now that our economy has matured.

My dad is an immigrant. He didn't bring any money to the country, nor was there anyone here to GIVE him money. My mom was raised POOR. Poor as in my grandmother brought home table scraps from the restaraunt she worked in to feed her 6 kids. Poor as in nothing for Christmas. Poor as in making your own clothing out of what was available. Now my dad is retired, owns 3 houses, and 5 cars, plus he put his 6 kids through college. Who gave him his money?

 

[ElFenix]

regressive tax structure = really bad idea

of course... if bushy gets the ability to keep the price of oil constant it wouldn't be so damaging (i only say this because basically any economic upturn/downturn over the last 30 years is preceded by a corresponding lowering/rising in the price of oil... the previous decade i'm not so aware of and most of the economy was affacted by the vietnam war)

 

[n0cmonkey]

Originally posted by: BoberFett

Originally posted by: n0cmonkey
Another question (a very American one at that) is: What does my extra money get me? What benefits do I get for paying more taxes than someone that pays less taxes? Do I get more social security when I retire (not that it will be around then)? Do my votes count more? Does the army protect me first in an invasion? Will the congressmen listen to me over someone with less money? What motivation do I have to work harder?

Actually if you really looked into it, a person who makes more money probably does make greater use of the infrastructure that was put or is held in place by taxes.

Somebody who made a fortune off of the internet is doing it because DARPA originally laid out some money.

And I guess public libraries and the like... Makes sense. Not an answer I had expected, but thats why I asked. Thanks, it gives me something to think about while I try to put some ointment on this wound in my paycheck... 😉

 

[BaliBabyDoc]

The reason why we need a more fair tax structure is people that contribute the most (IMHO) to social good get paid the worst and have no recourse for an inadequate system of social support. The firefighter, policeman, teacher, real military, etc all have difficult jobs and work just as hard as doctors, lawyers, and business owners.

Even if you contend that the janitor that starts working at 4:30 does not compare to the societal good provided by Bill Gates at 5:30 (OK maybe Bill isn't a good example) you cannot morally support a system that would tax the poor man (albeit he won't pay much in income but a lot in FICA) but exempt MOST of Gates wealth (FICA is joke to Bill, income tax is also relatively low b/c most of his compensation is in long term stock gains, and inheritance which if Bush has his way will never be taxed). Granted Gates has vowed to give much of his fortune away.

The janitor works 2 or 3 jobs for subsistence. Why not reduce his cost of living by ending the tax burden?

Oh yeah federal/state sales taxes should exempt food and clothing up to $100 per individual item.

 

[ElFenix]

Originally posted by: Jellomancer


Bullsh!t. Wealth breeds wealth. A poor person does not just become rich through hard work. It doesn't work that way now that our economy has matured.

my father's father didn't graduate from high school, and my father has become a productive member of society, and has never really wanted for money for all of my lifetime, at least. theres too many success stories out there for your blanket statement to be true, jello