Wyvrn, and your assumption is that everyone who is rich got there by working hard, everyone poor got there by not working hard, and everyone in the middle got there by working average. This is not the case, never will be, never was.
<< Wyvrn, and your assumption is that everyone who is rich got there by working hard, everyone poor got there by not working hard, and everyone in the middle got there by working average. This is not the case, never will be, never was. >>
That isn't what I wrote. I said weatlhy people are that way because they work harder than the average person, not that poor or middle class people don't work hard at all. People who lay concrete work plenty hard, but they deserve their salary because of the benefits of what they bring to society. Generally wealthy people work longer hours, or work and go to school, or take more risks to get where they are. How much risk does it take to work at wal-mart and make $8 an hour?
<< I'm not saying the rich guys aren't paying more taxes than everyone
else. I'm saying that if you want the luxury in life, you have to
pay for it. And part of that is in tax. >>
They already paid for it. If it were easy to make a lot of money, everyone would be doing it. Your statement is bathed in ignorance.
They already paid for it. If it were easy to make a lot of money, everyone would be doing it. Your statement is bathed in ignorance.
And how did they pay for it? Are you saying if someone else and I blindly invest 1 million each in the stock market and I made out with 1 million and he lost 1 million, are you gonna say I work harder than the other guy? Your statement doesn't make any sense when you automatically claim that wealthy people get rich because they work harder than everyone else. A lot of people got rich through inheritance or simply luck. Would you say that more than 50% of all rich people started at the bottom and work their way up? I don't think so.
Take for an example, getting seats from an airline. Rich people gets first class while others get coach or economy. What is their return? They PAY MORE to get more comfort. How about housing? Rich people PAY MORE to get their 10 bedroom condo by the beach. That's simply how society is. You want luxury as an upper class person, then you pay more taxes.
As for incentive...even with the current top tax rate (close to 40%), people still want to get rich...why? Why aren't they saying I don't want to get rich, its not fair to be rich? I mean, even after tax, the money that rich people have left is probally more than 10 average person combine. I'm not saying that it is right for the government to tax 40% on the rich, I'm just saying they should not lower the rate of the rich just so they pay less while all the middle and lower class people pay a lot more.
And how did they pay for it? Are you saying if someone else and I blindly invest 1 million each in the stock market and I made out with 1 million and he lost 1 million, are you gonna say I work harder than the other guy? Your statement doesn't make any sense when you automatically claim that wealthy people get rich because they work harder than everyone else. A lot of people got rich through inheritance or simply luck. Would you say that more than 50% of all rich people started at the bottom and work their way up? I don't think so.
Take for an example, getting seats from an airline. Rich people gets first class while others get coach or economy. What is their return? They PAY MORE to get more comfort. How about housing? Rich people PAY MORE to get their 10 bedroom condo by the beach. That's simply how society is. You want luxury as an upper class person, then you pay more taxes.
As for incentive...even with the current top tax rate (close to 40%), people still want to get rich...why? Why aren't they saying I don't want to get rich, its not fair to be rich? I mean, even after tax, the money that rich people have left is probally more than 10 average person combine. I'm not saying that it is right for the government to tax 40% on the rich, I'm just saying they should not lower the rate of the rich just so they pay less while all the middle and lower class people pay a lot more.
<< A lot of people got rich through inheritance or simply luck. Would you say that more than 50% of all rich people started at the bottom and work their way up? I don't think so.
>>
Yes because I have researched the subject, which you obviously haven't.
<< Take for an example, getting seats from an airline. Rich people gets first class while others get coach or economy. What is their return? They PAY MORE to get more comfort. How about housing? Rich people PAY MORE to get their 10 bedroom condo by the beach. That's simply how society is. You want luxury as an upper class person, then you pay more taxes. >>
I don't think so. You are charging them twice for their lifestyle. Charge them once more for the product, and twice through a tax? They ALREADY PAID more for the product, so why do they have to pay a higher percentage of the tax? I don't see your logic.
<< As for incentive...even with the current top tax rate (close to 40%), people still want to get rich...why? Why aren't they saying I don't want to get rich, its not fair to be rich? I mean, even after tax, the money that rich people have left is probally more than 10 average person combine. I'm not saying that it is right for the government to tax 40% on the rich, I'm just saying they should not lower the rate of the rich just so they pay less while all the middle and lower class people pay a lot more. >>
You are saying its right for the govt. to tax the rich at a higher rate if you don't think they have the right to be taxed at the same rate as everyone else. What kind of warped logic are you using? It makes no sense. I am not going to bother replying to your dribble anymore
<< That was the reason for the $20,000 deduction in my earlier post. The person making $50,000 would only be taxed on $30,000, leaving them only paying $7500.
Well, I already include the deduction in the 50,000. Notice I said
"taxable income"
>>That doesn't work then. Vi's idea works. If your math already deducts the $20,000 that vi was talking about, then the said taxpayers make $520,000 and $70,000, respectively. So the guy who grossed $520,000 gets to keep $395,000 of his gross income after taxes (add that $20K that was deducted). And the guy who grossed $70,000 gets to keep $57,500 of his income.
$520,000 gross income - (500,000*0.25) = $395,000 or 79% of gross
$70,000 gross income - (50,000*0.25) = $57,500 or 82% of gross
The standard deduction benefits the poorer guy more than it does the rich guy. In your model, you never said how much was deducted before the "taxable amount" was calculated. That makes all the difference. It's how much of your income you get to keep tax-free.
Yes because I have researched the subject, which you obviously haven't.
Yeah, that's really good proof you got there. We should definitely believe his words that he's done his research.
I don't think so. You are charging them twice for their lifestyle. Charge them once more for the product, and twice through a tax? They ALREADY PAID more for the product, so why do they have to pay a higher percentage of the tax? I don't see your logic.
I thought I already told you why they have to pay a higher percentage. You know how you have to take on some penalties in order to gain some reward? Like being a member at a large warehouse store. Usually they charge you a fee so you can buy stuff at discounted price. Well, in this case, its similiar...you sorta "become" a member of the upper class, and they charge you a fee for that in tax. If you don't like this fee, you can always cancel your "membership" (quit your job).
You are saying its right for the govt. to tax the rich at a higher rate if you don't think they have the right to be taxed at the same rate as everyone else. What kind of warped logic are you using? It makes no sense. I am not going to bother replying to your dribble anymore
I will repeat once again. If the rich is paying for more than 50% of all taxes, where you think they will get that money from if taxes are lower for them? Yep, from everybody else! You keep insisting this sense of "fairness" but yet you don't seem to understand the big picture. Giving back 50,000 to the rich is peanuts while taking 50,000 from the poor or middle class will cause devasting result. Somehow I really doubt you've done enough "research" as you have claim.
Yeah, that's really good proof you got there. We should definitely believe his words that he's done his research.
I don't think so. You are charging them twice for their lifestyle. Charge them once more for the product, and twice through a tax? They ALREADY PAID more for the product, so why do they have to pay a higher percentage of the tax? I don't see your logic.
I thought I already told you why they have to pay a higher percentage. You know how you have to take on some penalties in order to gain some reward? Like being a member at a large warehouse store. Usually they charge you a fee so you can buy stuff at discounted price. Well, in this case, its similiar...you sorta "become" a member of the upper class, and they charge you a fee for that in tax. If you don't like this fee, you can always cancel your "membership" (quit your job).
You are saying its right for the govt. to tax the rich at a higher rate if you don't think they have the right to be taxed at the same rate as everyone else. What kind of warped logic are you using? It makes no sense. I am not going to bother replying to your dribble anymore
I will repeat once again. If the rich is paying for more than 50% of all taxes, where you think they will get that money from if taxes are lower for them? Yep, from everybody else! You keep insisting this sense of "fairness" but yet you don't seem to understand the big picture. Giving back 50,000 to the rich is peanuts while taking 50,000 from the poor or middle class will cause devasting result. Somehow I really doubt you've done enough "research" as you have claim.
The standard deduction benefits the poorer guy more than it does the rich guy. In your model, you never said how much was deducted before the "taxable amount" was calculated. That makes all the difference. It's how much of your income you get to keep tax-free.
Well, I thought it was self imply since I use the current tax rate, so I am using the current standard deduction. I'm not inventing a new system. I'm just trying to state the flaw of a flat rate system compare to the current progressive rate system.
Well, I thought it was self imply since I use the current tax rate, so I am using the current standard deduction. I'm not inventing a new system. I'm just trying to state the flaw of a flat rate system compare to the current progressive rate system.
<< << A lot of people got rich through inheritance or simply luck. Would you say that more than 50% of all rich people started at the bottom and work their way up? I don't think so.
>>
Yes because I have researched the subject, which you obviously haven't. >>
I don't have any proof otherwise, but I find this hard to believe.
I paid $30K last year between State and Fed (Progressive tax BLOWS).... hope all the welfare people are putting good use to my money, cause NONE of it is going to the roads here atleast...... see thats another reason I wanted a 4x4... good for going for sunday cruizes
Don't understand how they tax more cause what a person makes, I use every publicly owned thing as much or less then the next guy.
Edit: actually I do understand, it just sucks.
Don't understand how they tax more cause what a person makes, I use every publicly owned thing as much or less then the next guy.
Edit: actually I do understand, it just sucks.
<< Yes because I have researched the subject, which you obviously haven't.
Yeah, that's really good proof you got there. We should definitely believe his words that he's done his research
>>
So you want to know who the rich are.
avg income is 25k/year. This is anybody that hold a job moving boxes around at a walmart distribution center. Or a waiter or a security guard. Full time at $12.50/hour. This person is richer than the lower 49%
A person/couple that is making 50k/year is in the top 75%. This is married couple who both have a full time job at walmart.
Or a single person who has worked hard got a degree..or someone that has just worked their way the company chain.
How about the evil top 10%. 100k/year lands you in the this group. A couple both holding down 50k/year jobs. Network admin, software developer, principle, teacher..lots of jobs to get you there.
Top 5% 120k/year. Same jobs as below, with a few more years of experience under the belt.
Now down to super rich 1%. 250K. I doubt there are many folks that make 250k off of just investments. Now we are talking small business owners, vp, presidents, ceos and basketball players. I would venture to say, most of these people worked very hard to get where their at.
So when do you classify someone as "rich and lazy"?
So when do you classify someone as "rich and lazy"?
Evidently if they inherited it. Guess I'll "deserve" to pay taxes up the ass when my father gives me a ~2 million inheritance.
Evidently if they inherited it. Guess I'll "deserve" to pay taxes up the ass when my father gives me a ~2 million inheritance.
Now down to super rich 1%. 250K. I doubt there are many folks that make 250k off of just investments. Now we are talking small business owners, vp, presidents, ceos and basketball players. I would venture to say, most of these people worked very hard to get where their at.
So when do you classify someone as "rich and lazy"?
Don't get me wrong, no where in my posts did I claim that all rich people are lazy scumbags. And I'm not saying people who are rich don't deserve to be rich. I mean, for those who make over $500,000...even after tax, they're still kinda rich. What really bothers me is that some people are saying relieve the rich from taxes and tax everyone else more.
In a democratic nation(US), you don't see minorities becoming the president. I mean, look at Al Gore...look how many people vote for him. Did he win the election? Simply state, majority rules..there's no argument on that. Since rich people are NOT the majority, there's no reason to give them back money they probably don't need so that millions will suffer. What if the rich want to form monopolies? Why not let them? Its their company...they work hard for it. Let them charge whatever they want.
In my example a couple of posts above...if a flat rate is implemented, it would only give back the rich ~50g. Since there's no such thing as a free lunch, this money's gotta come from somewhere, which will most likely be at the expense of the middle class.
So when do you classify someone as "rich and lazy"?
Don't get me wrong, no where in my posts did I claim that all rich people are lazy scumbags. And I'm not saying people who are rich don't deserve to be rich. I mean, for those who make over $500,000...even after tax, they're still kinda rich. What really bothers me is that some people are saying relieve the rich from taxes and tax everyone else more.
In a democratic nation(US), you don't see minorities becoming the president. I mean, look at Al Gore...look how many people vote for him. Did he win the election? Simply state, majority rules..there's no argument on that. Since rich people are NOT the majority, there's no reason to give them back money they probably don't need so that millions will suffer. What if the rich want to form monopolies? Why not let them? Its their company...they work hard for it. Let them charge whatever they want.
In my example a couple of posts above...if a flat rate is implemented, it would only give back the rich ~50g. Since there's no such thing as a free lunch, this money's gotta come from somewhere, which will most likely be at the expense of the middle class.
<<if you are including that deduction and the 50K is "taxable", then that person isnt "average". Average income is ~26K total. >>
doesn't that include all US citizens.
i.e. average single mother with 3 kides makes 100K = 4 people * 26K
doesn't that include all US citizens.
i.e. average single mother with 3 kides makes 100K = 4 people * 26K
- Mar 20, 2000
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while i'm sure that if i took the time to read through all this i could probably make a really informed, intelligent post that would be hailed by all as a bastion of sound theory and astute practicality, i fear that i am very tired and can only say that i voted in the poll.
<< <<if you are including that deduction and the 50K is "taxable", then that person isnt "average". Average income is ~26K total. >>
doesn't that include all US citizens.
i.e. average single mother with 3 kides makes 100K = 4 people * 26K >>
eh, sorta. Average household income after tax is about 50K. per capita income is ~26K.
Platinum,
<< In a democratic nation(US), you don't see minorities becoming the president. I mean, look at Al Gore...look how many people vote for him. Did he win the election? Simply state, majority rules..there's no argument on that. Since rich people are NOT the majority, there's no reason to give them back money they probably don't need so that millions will suffer. What if the rich want to form monopolies? Why not let them? Its their company...they work hard for it. Let them charge whatever they want. >>
And here in lies the problem, majority rule without equal representation to the tax payers. All the majority has to do is vote for everyone to get a new lexus at the expense of the rich. The bottom 1/2 does not pay any taxes, so they just get a free ride out of the deal.
No one is claiming that rich should not pay taxes. Any scheme that we of ATOT could come up with would have the rich paying more in taxes. Flat tax, sales tax, current system the rich would all pay more, but a flat or sales taxes would make ALL taxpayer aware of the costs of goverment.
And as a little lesson, I would live to bring an issue to a vote:
I would like platinum to pay for all the contributers of this thread to get together for lunch so this can be further discussed. Platinum would need to pick up the cost of lodging and airfare of course. If we all vote yes, it would fair because we did it in a democratic manner right?
<< In a democratic nation(US), you don't see minorities becoming the president. I mean, look at Al Gore...look how many people vote for him. Did he win the election? Simply state, majority rules..there's no argument on that. Since rich people are NOT the majority, there's no reason to give them back money they probably don't need so that millions will suffer. What if the rich want to form monopolies? Why not let them? Its their company...they work hard for it. Let them charge whatever they want. >>
And here in lies the problem, majority rule without equal representation to the tax payers. All the majority has to do is vote for everyone to get a new lexus at the expense of the rich. The bottom 1/2 does not pay any taxes, so they just get a free ride out of the deal.
No one is claiming that rich should not pay taxes. Any scheme that we of ATOT could come up with would have the rich paying more in taxes. Flat tax, sales tax, current system the rich would all pay more, but a flat or sales taxes would make ALL taxpayer aware of the costs of goverment.
And as a little lesson, I would live to bring an issue to a vote:
I would like platinum to pay for all the contributers of this thread to get together for lunch so this can be further discussed. Platinum would need to pick up the cost of lodging and airfare of course. If we all vote yes, it would fair because we did it in a democratic manner right?
A flat tax with 2 or perhaps 3 tiers is the best way to go. The status quo is a gawdawful mess and while a sales tax is inherently regressive.
Linflas
Lifer
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<< And here in lies the problem, majority rule without equal representation to the tax payers. All the majority has to do is vote for everyone to get a new lexus at the expense of the rich. The bottom 1/2 does not pay any taxes, so they just get a free ride out of the deal. >>
If you read the history of how the 16th amendment was passed this was a large factor in it. Up until the 1930's the average citizen was taxed very little. The withholding provision was originally slipped in during WWII as a "convenience" feature supposedly to make things easier for the wives left at home and suddenly working in paying jobs for the first time in their lives. Automatic withholding turned out to be the key to our modern system since it disconnects the taxpayer from the amount taxed. Just think of all the people you know that view April 15th as the opportunity to find out how much they get back from the government rather than how much they payed.
<< Flat rate Income tax, the only fair way to do it. Everyone should pay the excat same %, none of this redistribution of weath crap. >>
Couldn't be put any better
Let's not forget absolutely cut the tax payments used to fund the bums, federal welfare program, free-lunch program and other kind of crap that causes tax payers to pay out for other peoples good living.Even if everyone was required to pay flat rate, poor or rich, I wouldn't exactly call it fair that pollutants such as transients are given as much right to use the park as someone who makes a million a year.
Spending:
It's not young kids fault that they get inadequate education and personally I think we should have more money for public schools. I'd say less military budget too.
Progressive tax... Screw flat taxes... Flat taxes just shaft people in the mid/lower brackets...
<< Progressive tax... Screw flat taxes... Flat taxes just shaft people in the mid/lower brackets... >>
Screw progressive tax. Progressive tax just shaft people in the upper mid/upper brackets. Progressive tax results in lower class using more than they paid for. Upperclass probably paid more than their fair share for using public roads. Lowerclass probably use the public road more than their share of payment. The federal government also protects the lower class and provide them with financially and what not assitance. Then, the gov't forces mid/upper middle/upper to pay for these expenses directly or indirectly through the threats of service termination, seizure of property, imprisonment and etc.
Progressive tax: OMG OH NO AIIIEIEIIEAIEIEI!ONO!O!O!O!
flat rate: um.. okay..
rax rate inversely propertional to income: w00t w00t
. Even with flat rate tax, the poors will still be paying lesser absolute amount than people above them, yet continue to use public services beyond what they've paid for. By making the tax percentage inversely proportional or inversely logarithmic, we should be able to narrow the gap..$5,000 income=20%=$1,000 tax revenue
$10,000 income=10%=$1,000 tax revenue
$20,000 income=5%=$1,000 tax revenue
Linear function will probably not work too well. n is your income. I haven't figured out x nor will I figure it out.(function is n^-x)
Many of us says it's important to ensure things are good for many people, that said which one do you think is the most appropriate answer for this:
In an area where public transportation is more or less available, a poor guy is driving around in a pintomobile with trunk closed with bungee cord, right headlight crushed, left rear indicator cluster crushed and hydrocarbon emission is five times the state smog requirement.
A: The driver should be immediately pulled over and denied the right to drive that vehicle for public air quality and failure to meet federal motor vehicle safety standard. The safety and wellness of people around him is more important
B: It is more important for people who can only afford these junk to be able to drive around despite non compliance.
C: A + fine the driver for knowingly violating the regulations
First of all, to all of you who keep saying 'say goodbye to xxx' if you do away with income tax, that's oversimplified. Remember that this country didn't have a 'federal' income tax for some time, since we are a 'republic' after all. The point isn't to pay no taxes anywhere, but to pay no FEDERAL taxes. That's the key.
<< For those of you not in the working world yet, it's not unlikely for married professionals to make $83,251 each sometime in their working years. >>
What color is the god damned sky on your freaking planet???!!!! I can count the number of people I've ever met who make more than 50k a year on 1 hand! MOST people in America earn between 18k and 32k a year. That isn't even 84k if you add two people together! Pull your head out.
<< I'd rather be making 10 mil and being taxed 9 mil than be making sh!t and being taxed nothing. Think about it. >>
Absofreakinglutely correct. How much you lose is irrelevant, how much you have left is important. If you're making over 100k after taxes then shut the fvck up. If you don't have to worry about where your next meal is coming from then you have no business talking about income AT ALL. You aren't in the real world.
I'm not ignorant, I'm not lazy. I just refuse to be evil, and evil is what makes money. Abandoning your family, selling what shouldn't even be made, taking advantage of others, being lucky...THATS what makes money in America. Being intelligent, creative, independant...THATS what gets you fired. Hard work does NOT earn you anything but blisters, I know because I work DAMN hard. Hard CHOICES make you rich because you sell your soul to make it. I'm serious here too. I have 3 years of college, 2 yrs honorable military service, more certifications and skills than you can possibly fit on a resume...I have yet to earn 30k a year. Ability is MEANINGLESS in our market...it's all about rape and vileness. Hell, there are 2 very wealthy family members who I classify as evil because even though they make 100k+ a year, they missed their children growing up, had no personal growth time, and horded funds that could have benefited huge groups of people, instead of just their own greedy selves. No, screw that. There may be a few good rich people out there, but in general in this country the two do NOT mix.
<< For those of you not in the working world yet, it's not unlikely for married professionals to make $83,251 each sometime in their working years. >>
What color is the god damned sky on your freaking planet???!!!! I can count the number of people I've ever met who make more than 50k a year on 1 hand! MOST people in America earn between 18k and 32k a year. That isn't even 84k if you add two people together! Pull your head out.
<< I'd rather be making 10 mil and being taxed 9 mil than be making sh!t and being taxed nothing. Think about it. >>
Absofreakinglutely correct. How much you lose is irrelevant, how much you have left is important. If you're making over 100k after taxes then shut the fvck up. If you don't have to worry about where your next meal is coming from then you have no business talking about income AT ALL. You aren't in the real world.
I'm not ignorant, I'm not lazy. I just refuse to be evil, and evil is what makes money. Abandoning your family, selling what shouldn't even be made, taking advantage of others, being lucky...THATS what makes money in America. Being intelligent, creative, independant...THATS what gets you fired. Hard work does NOT earn you anything but blisters, I know because I work DAMN hard. Hard CHOICES make you rich because you sell your soul to make it. I'm serious here too. I have 3 years of college, 2 yrs honorable military service, more certifications and skills than you can possibly fit on a resume...I have yet to earn 30k a year. Ability is MEANINGLESS in our market...it's all about rape and vileness. Hell, there are 2 very wealthy family members who I classify as evil because even though they make 100k+ a year, they missed their children growing up, had no personal growth time, and horded funds that could have benefited huge groups of people, instead of just their own greedy selves. No, screw that. There may be a few good rich people out there, but in general in this country the two do NOT mix.
Progressive & Regressive taxes/taxation explained.
Progressive & Regressive taxes describe the tax table, not a political opinion. It's like a mathematical function. Most often these are called progressive or regressive tax tables or taxes.
In a progressive tax, the more you earn, the higher your tax rate.
In a regressive tax, the less you earn, the higher your tax rate.
The classical progressive tax is income tax.
The classical regressive tax is sales tax.
But there are many taxes and fees that are more extreme of each kind. Combined with this tax theory and these examples, a great deal can be induced about economics and politics.
Because most people are involved in preparing their progressive federal income taxes it is fairly well understood. And because most people are not involved in calculating their regressive taxes, it is fairly poorly understood. So we will concentrate on explaining regressive taxes, and how the two combine to make up our system, and most systems of taxation.
All known functioning systems of taxation have a balance of progressive and regressive taxes. This idea is almost never debated, the debates are over where the balance point should be, how much burden should be on the "rich", and how much burden on the "middle" and "poor"? For simplicity we will combine "middle" and "poor" just say "rich" and "poor", and put that dividing line somewhere between $50,000 and $500,000, as you wish. But we could just as easily have selected (say) $25,000 or $750,000 for our dividing line between "rich" and "poor", the principles are the same.
In a progressive tax, the more you earn, the higher your tax rate.
In a regressive tax, the less you earn, the higher your tax rate.
Progressive taxes soak the rich, regressive taxes soak the poor.
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An example of why sales tax is regressive.
If progressive taxes soak the rich, and regressive taxes soak the poor, why do we almost never hear the term, "soak the poor"? Perhaps that is a "loaded" question?
Let's imagine two frugal traveling salesmen. They each have to buy a new car every four years to (say) keep up appearances, and they need reliable transportation.
(One guy makes 20K, the other 300K)
Run the numbers on a the RATE of total income each pays on on 5% sales tax.
Poor Boy buys a $20,000 car pays $1000 or 5.0% of his income.
Rich Boy buys a $60,000 car pays $3000 or 1.0% of his income.
Poor Boy has 5 times the tax bite, or rate of tax on a car. Rich Boy hardly feels sales taxes.
Then run the numbers on a $30 pair of Levis, and the tax rate discrepancy triples.
Sales tax is NOT a flat tax.
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Other examples of regressive taxes and fees.
Most per-unit taxes are regressive. For example, in real estate, a $1,000/yr per lot assessment fee is not uncommon in some areas. (for things like fire and sewer, etc) That's a fair chunk for a $200,000 home, hardly nothing for a $2,000,000 home in the same assessment district.
Here is an example of a per-unit tax also of the "sin tax" variety, combining two of the most regressive of all taxes. In California, a (say) $1/gallon of alcoholic beverage tax was enacted, then quickly repealed. The reason was, this was a major tax bite on a six-pack of beer, and almost nothing on a $150 bottle of champagne, or a $60 bottle of scotch or wine. Often sin-taxes are easy for politicians, not this time. There was a similar per-unit "snack tax" that met a similar fate because of potato chips v. caviar and such. These amplifications of the tax rate discrepancy work in conjunction with the normal regressive sales tax functions.
That outlines the basic ideas and theory of regressive taxation.
Complications.
These have a moral or arguable aspect. Groceries, drugs and some necessities are rarely taxed for moral reasons because of a compounding problem found with the truly poor that has to do with disposable income. That is, a family that earns less than say, $25,000 has almost none. They may be forced to spend say, 25% of their income on groceries, no choice. A family earning $100K hardly feels the grocery bill in comparison.
This is because even a family that earns say $50,000 has potentially $25,000 disposable if they chose to live as cheaply as the $25k family. This could be funnelled into tax shelters. And Rich Boy often chooses to spend most of his money in ways that avoid sales taxes, such on his gardener, nanny, pool cleaner, chauffeur, accountant, lawyer, and other labor-based services, as well a his European vacation and any investments. Poor Boy has no such choice, his income must go to taxable consumer goods. These complications amplify the "pure" qualities of regressive taxation theory.
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Follow the money.
Why should the rich pay more?
Some say, for the same reason reason John Dillinger robbed banks: because that's where the money is. There is some logic to that, the richest 2% control in the ballpark of 40% of the private wealth in the USA. Others say; "Because they can afford it." Others who complain about progressive taxes say it's because people want "revenge on the rich", or it's "class envy". Or they say, "Why should the successful people be penalized?" That is an interesting take on reality.
But there is one argument that is not often seen, the "follow the money", or follow the tax money argument. Simply put, it says you get what you pay for. It says that if you eat a gourmet meal, you have purchased an entire different meal (not just more of it) than for a McDonald's Happy Meal. We claim that progressive taxes buys Rich Boy toys, regressive taxes buy Poor Boy toys. We say fair is fair. To test this idea, we follow the tax money.
Progressive taxes (such as income taxes) pay mostly for Rich Boy toys: Desert Storm, Cold War, gunboat diplomacy, the Fed's infinite labor pool (WANTED: unemployment) and any related poverty, NAFTA, GAT, free trade agreements, interstate freeways, National Parks, FBI, CIA, a hot-shot standing military, etc. And regressive taxes: (mostly local sales taxes and fees) go for Poor Boy toys: local roads, hospitals, schools, local parks, libraries, cops, city/county councils, fire fighting, etc.
If "toys" sounds too flippant, feel free to swap with a term that rings true for you, such as "tools of the trade", or "economic infrastructures."
To oversimplify a bit, a carpenter does not require the Rich Boy toys, and the CEO of GM does not require the Poor Boy toys. And progressive (mostly federal income) taxes soak the rich, regressive (mostly local sales) taxes soak the poor.
So each Boy is largely paying for his own meal.
--------------------------------------------------------------------------------
Libertarians often argue: TAX IS THEFT!
It's human nature to overestimate one's own powers and to undervalue the help we have received. The toys. Perhaps taxes are like any other transaction. A bundled transaction. When you buy a set of tires or a meal at a restaurant, you are paying for employee theft, drunk employees, security, air conditioning, accountants, and stupid business moves, etc. that you may disapprove of, bundled into the cost of doing business and it's not on your invoice. Bottom line: nobody is forcing you to buy the tires or the meal.
Your choice. You can live like a hermit in a shack, eating roots. If you do not consume the toys, likely you will be poor and owe no taxes. But once you have eaten and grown fat you are now in debt. There is no free lunch.
Some say that the American meal is the best meal in the world. If you have eaten of it, pay your debts, and don't try and sneak out the back door.
--------------------------------------------------------------------------------
The tricky balance of money and power.
Taxes are also used to tune the economy.
One of the main functions of taxation is to balance the flow of money between the employer and the employee. This keeps the money from accumulating on one end or the other and crashing the economy or altering the basic structure of democratic capitalism as we know it.
For example, many people argue that in the late 1970's the employees had too much power and money. Their wages were outpacing inflation and they were paying off their debt with little dollars. And that now in the 1990's via the great redistribution of wealth caused by cutting taxes for the wealthiest in half, and "firing the unions", some argue that the employers have too much power and money. History will tell.
What is tricky in this balance is that the power follows the money and the money follows the power. So when the economic scale starts to tip, it tends to accelerate. It's very touchy.
Taxes are also used in other ways to direct the economy. For example, if the government feels that a certain direction is in the national interest, tax shelters may be opened in that direction. This could be of benefit to compensate for the market's well known shortsightedness and directionlessness caused by its preoccupation with short-term gains. (Ten years is not a long time.)
--------------------------------------------------------------------------------
Beware of the so-called tax cut.
The tax cut is a funny way of managing a household. It's like deciding that you are spending too much money, so you ask your boss for a wage cut.
Perhaps the best way to stop spending too much money is to stop spending too much money. What an idea! Fix or cut the wasteful programs.
Sometimes a tax cut is not really a tax cut. That's because there is no free lunch. If a needed program is blindly defunded, then the money has to come from somewhere. Often if it's a federal program that is defunded, the slack is taken up by local (largely regressive) taxes. What we have is not a tax cut, but a tax shift, from the Rich Boys debt onto the Poor Boy's shoulders.
In 1996 a federal across-the-board "tax cut" was popular in certain circles. Here is how cutting progressive (income) taxes might have effected you:
If you made 36K, Dole's 15% "cut" takes $320/year less from you. But if local sales taxes edge up 1% to make up, you just lost money. Beware of the free lunch.
While most Rich Boys don't want the Poor Boys to shoulder their debts, keep in mind that for many of the very Rich Boys, that's part of their job. That's just simple economics.
lalalallalallala, i'm against flat tax
frankly you don't expect the poor to be paying for the space station and those awesome military toys we have right?
Progressive & Regressive taxes describe the tax table, not a political opinion. It's like a mathematical function. Most often these are called progressive or regressive tax tables or taxes.
In a progressive tax, the more you earn, the higher your tax rate.
In a regressive tax, the less you earn, the higher your tax rate.
The classical progressive tax is income tax.
The classical regressive tax is sales tax.
But there are many taxes and fees that are more extreme of each kind. Combined with this tax theory and these examples, a great deal can be induced about economics and politics.
Because most people are involved in preparing their progressive federal income taxes it is fairly well understood. And because most people are not involved in calculating their regressive taxes, it is fairly poorly understood. So we will concentrate on explaining regressive taxes, and how the two combine to make up our system, and most systems of taxation.
All known functioning systems of taxation have a balance of progressive and regressive taxes. This idea is almost never debated, the debates are over where the balance point should be, how much burden should be on the "rich", and how much burden on the "middle" and "poor"? For simplicity we will combine "middle" and "poor" just say "rich" and "poor", and put that dividing line somewhere between $50,000 and $500,000, as you wish. But we could just as easily have selected (say) $25,000 or $750,000 for our dividing line between "rich" and "poor", the principles are the same.
In a progressive tax, the more you earn, the higher your tax rate.
In a regressive tax, the less you earn, the higher your tax rate.
Progressive taxes soak the rich, regressive taxes soak the poor.
--------------------------------------------------------------------------------
An example of why sales tax is regressive.
If progressive taxes soak the rich, and regressive taxes soak the poor, why do we almost never hear the term, "soak the poor"? Perhaps that is a "loaded" question?
Let's imagine two frugal traveling salesmen. They each have to buy a new car every four years to (say) keep up appearances, and they need reliable transportation.
(One guy makes 20K, the other 300K)
Run the numbers on a the RATE of total income each pays on on 5% sales tax.
Poor Boy buys a $20,000 car pays $1000 or 5.0% of his income.
Rich Boy buys a $60,000 car pays $3000 or 1.0% of his income.
Poor Boy has 5 times the tax bite, or rate of tax on a car. Rich Boy hardly feels sales taxes.
Then run the numbers on a $30 pair of Levis, and the tax rate discrepancy triples.
Sales tax is NOT a flat tax.
--------------------------------------------------------------------------------
Other examples of regressive taxes and fees.
Most per-unit taxes are regressive. For example, in real estate, a $1,000/yr per lot assessment fee is not uncommon in some areas. (for things like fire and sewer, etc) That's a fair chunk for a $200,000 home, hardly nothing for a $2,000,000 home in the same assessment district.
Here is an example of a per-unit tax also of the "sin tax" variety, combining two of the most regressive of all taxes. In California, a (say) $1/gallon of alcoholic beverage tax was enacted, then quickly repealed. The reason was, this was a major tax bite on a six-pack of beer, and almost nothing on a $150 bottle of champagne, or a $60 bottle of scotch or wine. Often sin-taxes are easy for politicians, not this time. There was a similar per-unit "snack tax" that met a similar fate because of potato chips v. caviar and such. These amplifications of the tax rate discrepancy work in conjunction with the normal regressive sales tax functions.
That outlines the basic ideas and theory of regressive taxation.
Complications.
These have a moral or arguable aspect. Groceries, drugs and some necessities are rarely taxed for moral reasons because of a compounding problem found with the truly poor that has to do with disposable income. That is, a family that earns less than say, $25,000 has almost none. They may be forced to spend say, 25% of their income on groceries, no choice. A family earning $100K hardly feels the grocery bill in comparison.
This is because even a family that earns say $50,000 has potentially $25,000 disposable if they chose to live as cheaply as the $25k family. This could be funnelled into tax shelters. And Rich Boy often chooses to spend most of his money in ways that avoid sales taxes, such on his gardener, nanny, pool cleaner, chauffeur, accountant, lawyer, and other labor-based services, as well a his European vacation and any investments. Poor Boy has no such choice, his income must go to taxable consumer goods. These complications amplify the "pure" qualities of regressive taxation theory.
--------------------------------------------------------------------------------
Follow the money.
Why should the rich pay more?
Some say, for the same reason reason John Dillinger robbed banks: because that's where the money is. There is some logic to that, the richest 2% control in the ballpark of 40% of the private wealth in the USA. Others say; "Because they can afford it." Others who complain about progressive taxes say it's because people want "revenge on the rich", or it's "class envy". Or they say, "Why should the successful people be penalized?" That is an interesting take on reality.
But there is one argument that is not often seen, the "follow the money", or follow the tax money argument. Simply put, it says you get what you pay for. It says that if you eat a gourmet meal, you have purchased an entire different meal (not just more of it) than for a McDonald's Happy Meal. We claim that progressive taxes buys Rich Boy toys, regressive taxes buy Poor Boy toys. We say fair is fair. To test this idea, we follow the tax money.
Progressive taxes (such as income taxes) pay mostly for Rich Boy toys: Desert Storm, Cold War, gunboat diplomacy, the Fed's infinite labor pool (WANTED: unemployment) and any related poverty, NAFTA, GAT, free trade agreements, interstate freeways, National Parks, FBI, CIA, a hot-shot standing military, etc. And regressive taxes: (mostly local sales taxes and fees) go for Poor Boy toys: local roads, hospitals, schools, local parks, libraries, cops, city/county councils, fire fighting, etc.
If "toys" sounds too flippant, feel free to swap with a term that rings true for you, such as "tools of the trade", or "economic infrastructures."
To oversimplify a bit, a carpenter does not require the Rich Boy toys, and the CEO of GM does not require the Poor Boy toys. And progressive (mostly federal income) taxes soak the rich, regressive (mostly local sales) taxes soak the poor.
So each Boy is largely paying for his own meal.
--------------------------------------------------------------------------------
Libertarians often argue: TAX IS THEFT!
It's human nature to overestimate one's own powers and to undervalue the help we have received. The toys. Perhaps taxes are like any other transaction. A bundled transaction. When you buy a set of tires or a meal at a restaurant, you are paying for employee theft, drunk employees, security, air conditioning, accountants, and stupid business moves, etc. that you may disapprove of, bundled into the cost of doing business and it's not on your invoice. Bottom line: nobody is forcing you to buy the tires or the meal.
Your choice. You can live like a hermit in a shack, eating roots. If you do not consume the toys, likely you will be poor and owe no taxes. But once you have eaten and grown fat you are now in debt. There is no free lunch.
Some say that the American meal is the best meal in the world. If you have eaten of it, pay your debts, and don't try and sneak out the back door.
--------------------------------------------------------------------------------
The tricky balance of money and power.
Taxes are also used to tune the economy.
One of the main functions of taxation is to balance the flow of money between the employer and the employee. This keeps the money from accumulating on one end or the other and crashing the economy or altering the basic structure of democratic capitalism as we know it.
For example, many people argue that in the late 1970's the employees had too much power and money. Their wages were outpacing inflation and they were paying off their debt with little dollars. And that now in the 1990's via the great redistribution of wealth caused by cutting taxes for the wealthiest in half, and "firing the unions", some argue that the employers have too much power and money. History will tell.
What is tricky in this balance is that the power follows the money and the money follows the power. So when the economic scale starts to tip, it tends to accelerate. It's very touchy.
Taxes are also used in other ways to direct the economy. For example, if the government feels that a certain direction is in the national interest, tax shelters may be opened in that direction. This could be of benefit to compensate for the market's well known shortsightedness and directionlessness caused by its preoccupation with short-term gains. (Ten years is not a long time.)
--------------------------------------------------------------------------------
Beware of the so-called tax cut.
The tax cut is a funny way of managing a household. It's like deciding that you are spending too much money, so you ask your boss for a wage cut.
Perhaps the best way to stop spending too much money is to stop spending too much money. What an idea! Fix or cut the wasteful programs.
Sometimes a tax cut is not really a tax cut. That's because there is no free lunch. If a needed program is blindly defunded, then the money has to come from somewhere. Often if it's a federal program that is defunded, the slack is taken up by local (largely regressive) taxes. What we have is not a tax cut, but a tax shift, from the Rich Boys debt onto the Poor Boy's shoulders.
In 1996 a federal across-the-board "tax cut" was popular in certain circles. Here is how cutting progressive (income) taxes might have effected you:
If you made 36K, Dole's 15% "cut" takes $320/year less from you. But if local sales taxes edge up 1% to make up, you just lost money. Beware of the free lunch.
While most Rich Boys don't want the Poor Boys to shoulder their debts, keep in mind that for many of the very Rich Boys, that's part of their job. That's just simple economics.
lalalallalallala, i'm against flat tax
frankly you don't expect the poor to be paying for the space station and those awesome military toys we have right?
And here in lies the problem, majority rule without equal representation to the tax payers. All the majority has to do is vote for everyone to get a new lexus at the expense of the rich. The bottom 1/2 does not pay any taxes, so they just get a free ride out of the deal.
You are correct in saying most poor people doesn't pay any taxes. So what makes you think they will pay their equal share with a flat tax? If their income is lower than the standard deduction, no matter what kind of system you put, you're still not gonna make them pay. My question once again, Who pays the rich back the money they will get with a flat rate tax?? This is basically a battle between the middle and upper class. People, progressive might not be the best system, but I would choose progressive over flat anyday.
And as a little lesson, I would live to bring an issue to a vote:
I would like platinum to pay for all the contributers of this thread to get together for lunch so this can be further discussed. Platinum would need to pick up the cost of lodging and airfare of course. If we all vote yes, it would fair because we did it in a democratic manner right?
Does this sound like communism to anybody? That's how it started in China, right? With everyone overthrowing the rich. Of course your logic here wouldn't work because not everyone(especially me) agree a vote would settle the argument. The American people agree that Congress would settle the issue of taxation.
A flat tax with 2 or perhaps 3 tiers is the best way to go. The status quo is a gawdawful mess and while a sales tax is inherently regressive.
I believe that's called "progressive tax" which IS the current system. Everyone(assuming single) pays the same % for the money that you make between 0-6000, 6000-27950, 27950-67700, 67700-141250, 141250-307050, and 307050+.
You are correct in saying most poor people doesn't pay any taxes. So what makes you think they will pay their equal share with a flat tax? If their income is lower than the standard deduction, no matter what kind of system you put, you're still not gonna make them pay. My question once again, Who pays the rich back the money they will get with a flat rate tax?? This is basically a battle between the middle and upper class. People, progressive might not be the best system, but I would choose progressive over flat anyday.
And as a little lesson, I would live to bring an issue to a vote:
I would like platinum to pay for all the contributers of this thread to get together for lunch so this can be further discussed. Platinum would need to pick up the cost of lodging and airfare of course. If we all vote yes, it would fair because we did it in a democratic manner right?
Does this sound like communism to anybody? That's how it started in China, right? With everyone overthrowing the rich. Of course your logic here wouldn't work because not everyone(especially me) agree a vote would settle the argument. The American people agree that Congress would settle the issue of taxation.
A flat tax with 2 or perhaps 3 tiers is the best way to go. The status quo is a gawdawful mess and while a sales tax is inherently regressive.
I believe that's called "progressive tax" which IS the current system. Everyone(assuming single) pays the same % for the money that you make between 0-6000, 6000-27950, 27950-67700, 67700-141250, 141250-307050, and 307050+.
And here in lies the problem, majority rule without equal representation to the tax payers. All the majority has to do is vote for everyone to get a new lexus at the expense of the rich. The bottom 1/2 does not pay any taxes, so they just get a free ride out of the deal.
You are correct in saying most poor people doesn't pay any taxes. So what makes you think they will pay their equal share with a flat tax? If their income is lower than the standard deduction, no matter what kind of system you put, you're still not gonna make them pay. My question once again, Who pays the rich back the money they will get with a flat rate tax?? This is basically a battle between the middle and upper class. People, progressive might not be the best system, but I would choose progressive over flat anyday.
yup, its not true that the poor don't pay taxes theres sales tax? regressive totally...and definetly hurts the poor way more. we take the middle ground here, our sales tax is regressive, but our income tax is progressive. we're not pure anything, which works out for the best
and frankly we're treating the rich very well now. before the 80's the top bracket was 50%, it got dropped to 28%. boohoo!
You are correct in saying most poor people doesn't pay any taxes. So what makes you think they will pay their equal share with a flat tax? If their income is lower than the standard deduction, no matter what kind of system you put, you're still not gonna make them pay. My question once again, Who pays the rich back the money they will get with a flat rate tax?? This is basically a battle between the middle and upper class. People, progressive might not be the best system, but I would choose progressive over flat anyday.
yup, its not true that the poor don't pay taxes
theres sales tax? regressive totally...and definetly hurts the poor way more. we take the middle ground here, our sales tax is regressive, but our income tax is progressive. we're not pure anything, which works out for the best and frankly we're treating the rich very well now. before the 80's the top bracket was 50%, it got dropped to 28%. boohoo!
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