US 2012 Tax Brackets - Why and what needs to change

[randomrogue]

This whole conversation is moot if they would just spend our money wisely. You add state taxes to this and suddenly it's a real pretty penny. Six figure income earners are paying around 38% and for what? What the fuck do you get for your tax dollars?

 

[xBiffx]

I would think that owning a home would be good for the economy. You don't see a lot of renters down at Home Depot every weekend picking up supplies for their latest home improvement project.

People are going to own a home regardless of whether or not their interest payment is tax deductible. Granted, its going to be less than today, but then again swelling home ownership, or rather borrowship, is partly to blame for the mess we are in today.

This augment is akin to people getting married for financial reasons. That is absolutely the worst reason to marry someone.

 

[Zargon]

I'm not entirely opposed to something like that. Doesn't destroy LTCG like many fools seem to want, while lowering corporate taxes which some people still don't understand is a tax on consumers.

I'd certainly be interested to see at least a rough estimate of federal revenues, assuming all else was equal.

I was under the impression that the reason cap gains are taxed less is due to the inherit risk of investment, which I am OK with giving them a break for taking a risk by investing, because the risk is what keeps me from doing it

but there needs to be tiers, its alot less risky for richie rich than it is for me because they are already rich

People are going to own a home regardless of whether or not their interest payment is tax deductible. Granted, its going to be less than today, but then again swelling home ownership, or rather borrowship, is partly to blame for the mess we are in today.

This augment is akin to people getting married for financial reasons. That is absolutely the worst reason to marry someone.

the lending practices are mostly to blame, not the paltry tax deduction

and I never understood the 'get married to save money'. I try every year to do my taxes a few different ways married joint, married separate ETC and it always comes out the same

though the new income brackets might put my wife at a lower tax rate than if we file joint this year, I'll find out in feb

(married deduciton is double the standard single)

How about we just eliminate all deductions aside from medical expenses exceeding a % of income. That is the only one that seems not to be choice driven.

are you sure its not? what about severly obese people? those that ate/drank themselves to diabetes? or smokers? alcoholics?

 

[BurnItDwn]

Complicate much?

I figured this was actually rather simple ...

each pay grade is 2x the previous paygrade and 5% higher.

 

[nehalem256]

are you sure its not? what about severly obese people? those that ate/drank themselves to diabetes? or smokers? alcoholics?

Well we could make it so that medical expenses are only deductible if below a certain BMI? (I realize BMI is not perfect, but surely there has to be way to using something similar).

And increase taxes on cigarettes and alcohol to account for the costs.

 

[xBiffx]

I figured this was actually rather simple ...

each pay grade is 2x the previous paygrade and 5% higher.

So these weren't marginal rates then I take it? Rather they were effective rates? Talk about getting screwed.

 

[werepossum]

I'd make it simpler than that. Reduce corporate income tax to less than 5%, then tax all income at current rates regardless of source. Give long term investors a break of 1%/yr held on capital gains, with a max credit of 10%. Disallow holding back of profits in offshore subsidiaries.

Corporate entities would make America their home in droves, because that would be very good for corporations, and the govt would get their revenue out of investors, and out of corporate employees in this country.

I like that. My counter proposal would be no corporate tax, tax all income at current rates regardless of source, tax all corporate money transferred out of the country at 15%, tax all individual money transferred out of the country at 15%, tax all individual money transferred into the country at current rates with a credit for foreign taxes paid not to drop below 15% effective taxation, give long term (24+ month) investments a break of official inflation over the entire time period plus 1%/year (10% max) to cover depreciation in the dollar.

Incidentally the "no corporate tax" thing is straight from the FairTax, for the reasons you list. I add only the tax on money transferred out of the country since our purpose should be to fairly fund government PLUS to encourage our economy, and money shipped out of our economy hurts our economy whereas money shipped into our economy helps.

 

[piasabird]

These tax tables are irrelevent! My family grossed $51k last year and based on that and the amount of tax I paid, my rate was abour 3.5%. Why is that do you think? The answer is deductions. Standard deduction is quite a bit for a husband and wife. Plus Tithing 10% of Gross, plus Home ownership deductions whittled down the income amount so far that I only paid about 3.5% of Gross as tax. I am sure if I was a single person who never donated to charity and rented an apartment, I would have paid quite a bit more in taxes. In reality people who make less than $20,000.00 are not likely to pay any tax. So what is the point? I dont think people who work part time at a restraunt or some store should pay any tax unless they gross over $20k. Lets just say I think people who make less than $20k to be below the poverty line.
5% $20,001 - $35k
10% $35,001 - $60k
15% $60,001 - $80k
20% $80,001 - $120k
25% $120,001-$180k
30% $180k - $300k
35% over 300k
Businesses only pay %30

Plus drastically change social security Just remove the cap.
No tax on capital gains or interest for people who earn less than $300k

Remove all deductions/credits for business and for people earning over $500k

Tax abatements must be counted as income as Payment-in-kind.

Tariffs on all imports from countries who attempt to manipulate currency or do not maintain similar anti-pollution standards, violate patents, or sell goods below price, or
have businesses subsidized by their government. (Subject to negotiations)

Drastically reduce imports of automobiles. Foreign manufacturers should not be allowed to take over our markets. Set quotas and make foreign manufacturers bid to enter our markets. If a country is sending contaminated produce they should not be allowed access to our markets like the contaminated food from China and Mexico.

Change citizenship requirements One parent has to have citizenship. Children of illegal immigrants or tourist and student visas do not qualify for citizenship.

Tax foreign workers at a higher rate. Also tax employers of foreigners at a higher rate. This is to cut down on H1b visas.

Require all charities to report charitable help to needy people as income. Tax payers will have to report as income and report it to the IRS.

 

[xBiffx]

Businesses only pay %30

Businesses don't pay shit. You pay that 30% along with everyone else who purchases from that business.

 

[Jhhnn]

I was under the impression that the reason cap gains are taxed less is due to the inherit risk of investment, which I am OK with giving them a break for taking a risk by investing, because the risk is what keeps me from doing it

but there needs to be tiers, its alot less risky for richie rich than it is for me because they are already rich

There is little risk in very large highly diversified portfolios based on sound investing principles, particularly wrt the wealthy & their lifestyles. They don't spend all they make, nowhere near it, and they have enormous assets that can be partially liquidated in worst case scenarios.

There is no conceivable financial calamity short of revolution that can touch Mitt's lifestyle, and probably not even that.

 

[BurnItDwn]

So these weren't marginal rates then I take it? Rather they were effective rates? Talk about getting screwed.

Nah, I meant marginal rates.

treat investment and earned income the same. One big pool.

Allow same writeoffs as current.

If person gets enough writeoffs/credits to be under 3%, cap them to the minimum 3%. (effective)

This way, the 46% or whatever who pay no taxes, are instead paying some taxes and contributing.

I know my proposal is asking more from the people at the very top, so I'm suggesting that all people should play along.

 

[xBiffx]

Nah, I meant marginal rates.

treat investment and earned income the same. One big pool.

Allow same writeoffs as current.

If person gets enough writeoffs/credits to be under 3%, cap them to the minimum 3%. (effective)

This way, the 46% or whatever who pay no taxes, are instead paying some taxes and contributing.

I know my proposal is asking more from the people at the very top, so I'm suggesting that all people should play along.

Then I stand by my previous statement. You over complicated this a bit. Now if you are in an upper or even middle bracket, you have several tax tiers to get through to figure out your total tax and then your effective rate.

We need less complicated. The tax code is ridiculous enough.

I do applaud your attempt at making sure everyone is paying in though.

 

[nehalem256]

Then I stand by my previous statement. You over complicated this a bit. Now if you are in an upper or even middle bracket, you have several tax tiers to get through to figure out your total tax and then your effective rate.

If you are in a middle tax bracket you simply go to the back of the instruction booklet. Is that really too complicated for you?

 

[xBiffx]

If you are in a middle tax bracket you simply go to the back of the instruction booklet. Is that really too complicated for you?

No, its not. But I also don't get how many people have to use a tax accountant or who make mistakes on their taxes year after year. Difficulties with taxes are foreign to me even with all the deductions and incomes I have but that doesn't mean that others find it just as easy.

I would think even adding a bracket is going to increase issues people currently have with their taxes even though it really shouldn't.

 

[nehalem256]

No, its not. But I also don't get how many people have to use a tax accountant or who make mistakes on their taxes year after year. Difficulties with taxes are foreign to me even with all the deductions and incomes I have but that doesn't mean that others find it just as easy.

I would think even adding a bracket is going to increase issues people currently have with their taxes even though it really shouldn't.

And none of that has anything to do with tax brackets.

 

[xBiffx]

And none of that has anything to do with tax brackets.

You're right. The complicated part is doing the math and filling in the forms correctly.