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What is the big deal with taxes?
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He is quite wrong: http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html
Let's take someone making decent money as an example (in approx k):
Gross income: 75
RRSP max: 0.18*75 = 13.5
basic exemption: 9.6
Taxable income: 52
F bracket 1 taxable income (15%): 39
F bracket 2 taxable income (22%): 13
ON bracket 1 (6%): 37
ON bracket 2 (9.15%): 15
Total: 12.2, which is 16.3% of 75. Of course, it'll be higher if you don't max out your RRSPs, but even then it'll only climb toward 20%.
I always like this analogy for taxes:
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that?s what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. ?Since you are all such good customers,? he said, ?I?m going to reduce the cost of your daily beer by $20.?Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his ?fair share? They realized that $20 divided by six is $3.33. But if they subtracted that from everybody?s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man?s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so the fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 ( 22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
?I only got a dollar out of the $20,?declared the sixth man. He pointed to the tenth man,? but he got $10!?
?Yeah, that?s right,? exclaimed the fifth man. ?I only saved a dollar, too. It?s unfair that he got ten times more than I!?
?That?s true!!? shouted the seventh man. ?Why should he get $10 back when I got only two? The wealthy get all the breaks!?
?Wait a minute,? yelled the first four men in unison. ?We didn?t get anything at all. The system exploits the poor!?
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn?t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn?t have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that?s what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. ?Since you are all such good customers,? he said, ?I?m going to reduce the cost of your daily beer by $20.?Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his ?fair share? They realized that $20 divided by six is $3.33. But if they subtracted that from everybody?s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man?s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so the fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 ( 22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
?I only got a dollar out of the $20,?declared the sixth man. He pointed to the tenth man,? but he got $10!?
?Yeah, that?s right,? exclaimed the fifth man. ?I only saved a dollar, too. It?s unfair that he got ten times more than I!?
?That?s true!!? shouted the seventh man. ?Why should he get $10 back when I got only two? The wealthy get all the breaks!?
?Wait a minute,? yelled the first four men in unison. ?We didn?t get anything at all. The system exploits the poor!?
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn?t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn?t have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
Zenmervolt
Elite member
No, not "extra", but you've paid out that $25K (or can be expected to pay it out) over time. If the "average" person needs, say, $200,000 worth of medical services over his or her lifetime, then the average person, over his lifetime, will pay $200,000 in taxes to pay for it. Money out has to equal money in.
ZV
Koing
Elite Member <br> Super Moderator<br> Health and F
England is the has the 18th worst taxes out of the G20 countries...
45% for people earning over £100k (200k people)
50% for people earning over £150k (100k people)
Theres apprently only 1% of the population earning over £100k in England...
I don't tend to bitch as theres no point. I have to pay it so why sweat it? Sure it would be great if it was less but I can't do jack sh!t about it. It'll be better in 3yrs when my student loans are gone! Then it's an extra £2.5k a year to spend on whatever I want 😀
Koing
BlahBlahYouToo
Lifer
exactly.
fair tax FTW.
DT4K
Diamond Member
I think you underestimate what people do and don't understand.
I think most people who pay lots of taxes are fully aware of the benefits they receive in the form of national defense, state and local police, fire, emergency, roads and other infrastructure, etc. But they are also aware that the people who receive all these benefits, in addition to free school lunches, welfare checks, food stamps, medicare, medicaid, etc., etc., etc., are the people who didn't pay ANYTHING.
Zenmervolt
Elite member
"Do I look like a cat to you? Leaping through the trees all nimbly-pimbly?"
ZV
It's just the incessant nickel and diming that bugs me. Last year my property taxes went up almost $1000. No warning. No nothing. Just a card in the mail saying "Last years taxes $3800, this years $4700".
And now the state of IL is considering bumping up the state income tax a full 50%. There's another couple grand right out of our pocket.
In my town there's an "entertainment" tax on top of the state, county, city, and half dozen other referendum taxes bringing up the sales tax at restaurants to over 10% So for every dollar I eat, a dime is going back to some various coffer.
And then there's the insane amount of taxes just for haning a freaking phone on my wall and the "Universal Service Fund" tax on internet services that's 10.5%. Yes....10.5%. The previous company I worked for paid almost $400 a month...just in freaking taxes for the various T1's and frames they had set up.
We just get nickeled and dime so damn much with no real accountability for where it's going. And then the state goverments send out the sob stories about being so many billion dollars in debt.
Here's a tip - CUT SOME YOUR EXPENSES.
That's what the rest us tax payers have to do.
Sorry for the rant....we're just oblivious sheep dropping pennies in the jar for whatever cause without asking "What am I getting out of this?"
DT4K
Diamond Member
Having a different opinion from yours is not the same as failing to understand. Whether the benefits are worth the cost is a matter of personal opinion. People may complain about taxes for a number of reasons. They might not believe in redistribution of wealth. They might think the government wastes money. They might believe that the way the tax burden is divided up is unfair.
Personally, I do think that in general, as a society, we have a moral obligation to help certain people in certain situations. I just don't always agree with the way it's done and I don't agree with the way the cost is divided up.
UglyCasanova
Lifer
The rich are heavily burdened with taxes, yes. One thing to keep in mind though is those taxes go to maintain an economic environment where they are capable of becoming rich in the first place. Bill Gates pays an incredible amount of taxes, but without the economic environment of the United States to work in he never would have made his billions in the first place.
That said I think everyone can agree that it is an absolute travesty the amount of money that the government wastes each year. It has lost sight of its' main goal of providing an environment conducive to trade and economic growth, protecting the rights and liberties of its' citizens, and maintaining the sovereign status of the US through defense. Instead over the years it has grown to become a massive behemoth that wants to do everything from policing various countries on ideological grounds to wiping our asses for us. The government has to shrink. What we have now is simply a cancer on our society, and it is only getting worse.
That said I think everyone can agree that it is an absolute travesty the amount of money that the government wastes each year. It has lost sight of its' main goal of providing an environment conducive to trade and economic growth, protecting the rights and liberties of its' citizens, and maintaining the sovereign status of the US through defense. Instead over the years it has grown to become a massive behemoth that wants to do everything from policing various countries on ideological grounds to wiping our asses for us. The government has to shrink. What we have now is simply a cancer on our society, and it is only getting worse.
RadiclDreamer
Diamond Member
Yeah, but then he gets to pay more for sales tax, property tax, luxery tax etc
ConstipatedVigilante
Diamond Member
QFT. The founding fathers are rolling in their graves at the sight of things now. It seems like no one in the government wants to follow a strict interpretation of the constitution - they treat it like a bunch of guidelines. It has lost its meaning as the supreme law of the land in many ways.
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