And therein lies their error.

Give me a quick snapshot of your ideal tax code.

Is a repeal of the LTCG rate enough of a change?

Every penny of earnings (regardless of source) taxed via the current progressive brackets?

Higher brackets for extra-wealthy folks?

In all seriousness, what do you envision as "fair"?

Somehow .5% of people who file taxes shouldering almost 30% of the individual income tax burden while almost half the people owe no federal income tax is viewed as unfair; to the almost half that owe nothing.:shrug:

And what % of our nation's wealth & income is accounted for by that 0.5%?

Around 14% of income.

From all sources, or just employment?

I'm made to wonder how much more they would pay in taxes, if their current REAL income was taxed at current rates?

so whats more important, % of tax to income or $ amount?

How ironic that the system of taxation began as a way for the rich to subsist off the poor, no?

What's important is that the government can't build and maintain roads and bridges or provide for the common defense without tax money. If everyone got the tax breaks that some get then we'd have a real hole of a country.

That said, if someone makes more money than me, then I don't think it's fair that they pay less than I do towards providing funds for the country we both live in and benefit from. That doesn't mean I think they should necessarily pay more, but personally I don't have a problem paying more in taxes than someone who makes less than I do. Within reason.

I do think that people should not be coming away from tax season with a net gain, the way some lower income (and probably higher income) people do. Credits like the EIC often make that a reality. I don't have a problem with letting a lower income person slide on taxes, but they shouldn't be taking money straight out of the pot they aren't contributing to.

Problem is I have no idea how to frame those thoughts in legalese, and by association I have no idea how to prevent people with six or seven (etc.) figure salaries from hiding their income the way some do.

It might be ironic, if we lived in a feudal agrarian society, but we don't. The world changed. The people, who have the bulk of what is required for survival, changed. "Divine Right" was largely abolished. Democracy was introduced, with its implication that we are all responsible for the business of government.

So your answer to Ed's questions is: Percentage.

:lol right

Not exactly. On the surface, a simple straight percentage would seem the most reasonable. But that still leaves the CEO driving an Aston Martin from his 20 room mansion who only pays a percentage of $1 a year, since his compensation is in company stock options or his bank account is in the Cayman Islands, or some other such nonsense. And it still leaves the single woman working for $10 an hour for as many hours as she can get, then mowing lawns and pet sitting in her spare time, because she's taking care of her disabled parents who have no means of supporting themselves. I really wouldn't mind seeing her pay no taxes, or a lower percentage than the rest of us.

So my answer to Ed's question is: don't ask for a simple answer to a complicated problem.

why should a fella who makes 5x as much as "you" have to pay 5x the taxes?

It's simple.......The American way of life made it possible for most rich people to get rich. That being so, you have to pay for that priviledge. The idea that everyone should pay a fixed $ amount for the government services they "consume" just doesn't work.

Even a flat % doesn't work. If everyone paid a flat 15%, you'd have to raise the minimum wage in order for the "poor" to still be able to afford gas, food and products that "rich" people's companies sell. Can't sell goods & services without people to buy them (unless all your customers are overseas).

And my other answer to Ed would be: don't respond to an answer to your question when you haven't even read said answer.

"pay for the privilage to be rich" wow, so besides hard work and determination you also have to pay to be rich.

I think that the answer was quite different, to what you've said here. It was, "Pay back to support the system, that permitted you to become rich in the first place."

Your answer implies a mentality, that leaves far too many women unsatisfied; "I got mine. You get yours."

To answer this question, even though you clearly haven't put nearly enough hard work or determination into deserving an answer, let's look at the budget of just the DoD for this year (not including the wars).

$680 billion. In order for the approximately 313 million people in the US to pay this $680 billion tab, we would all have to contribute $2,172. Now, let's go get that money from a friend of mine,* who has been a roughneck most of his adult life, and started working when he was 15. He has paid into social security, paid his taxes, and worked in rain, sleet, snow, and blistering heat for sometimes 60 hours or more a week. Now he has epilepsy, which had been getting worse over a period of 10 years during which he was still roughnecking. He is finally to a point where his epilepsy is a safety hazard. The state of New Mexico has revoked his driver's license, but refused to pay him social security disability (which, remember, he has paid into all his working life, at this point a little over 15 years). He is forbidden from working as a roughneck by doctors' orders. He's providing for his family of five through the kindness of his extended family and his church.

You want to ask him for that $2,172?

For the thousands like him, and those who are even worse off, who picks up the slack? And that's just for the DoD's bills, not including the wars.



*Actual case file, I can introduce him to you if you'd like.

Now, here's the reality:

That woman is paying very little if any taxes.

She is probably not filing taxes on her lawn mowing and pet sitting jobs, so she is just as much of a tax cheat as your CEO.

The CEO may only make $1 a year in salary but those stock options aren't free. Depending on what type of options they are, they may be taxed as income or they may be taxed later as capital gains.

Of course you may never be taxed on your options if they expire worthless. :idk:

Cayman account or not, if your CEO is being paid through a legitimate source, he is being taxed. If he/she is actually trying to export money from the US with no taxes being paid, I assure you that the IRS would be interested to hear about it.

Now, it may seem unfair that Susie is paying 15% on her $30k AGI while Mr. CEO is paying 15% on his $10 million, but please explain to me how his $1,500,000 is less than her $4500...)

RacerX Answer

" He should have planned ahead and cured epilepsy! Look at my new gadget! Wheeee!!!!"


/RacerX Answer

When it comes down to "choose between paying your taxes, eating, or paying your dad's medical bill," I'd say that $4500 is quite a bit more than $1.5 million.

Susie is a real case file too, by the way. And if she's not paying taxes on her lawn mowing job, I can't seem to bring myself to care. Even with the "extra income," she would be getting a full tax refund. Assuming it's just a refund, I'm ok with that.

So, she is getting a full refund (a more likely scenario than my worst case)?

She paid no income taxes, so...

Is she still paying more than the CEO's $1.5 mil because she has a tough time making ends meet?

Nope. And I'm fine with that. Were I a $10 million a year CEO, I would still be fine with that. When her paychecks start picking up, so can her taxes.

That said, just because the CEO is paying more doesn't mean that he "can't afford it as easily" as Susie. Susie can't "afford" shit. The CEO could still easily "afford" millions more. He just might have to downgrade to a Mercedes.

The above is not an attempt to answer the question of whether the CEO should pay more just because I would. But if he doesn't, where is the money going to come from? It ain't coming from Susie, or the epileptic ex-roughneck, no matter how hard you squeeze them.

He's not a $10 million a year CEO, he's a $1 a year CEO, remember? ;)

Then he'd better get to mowing...

He's a $1M/yr CEO with a declared income of $250K ;)

and at 25% he's still paying $62.5k in taxes vs ? $0 for some people.........

Great! Find 10.8 million more like him and we'll have the DoD's expenses covered. Not including the wars.

Now, about those roads...

we gots millions of people paying $0 in taxes or even getting huge returns w/o paying a dime into the system, why not delve into their numbers?

As I've said, I have no problem cutting off the tax credits for people who effectively aren't paying any taxes. Get your refund, or fix your deductions so you're not paying, and that's it. But I think you're exagerating when you say "huge returns." EIC, for instance, was around $300 last I checked, $600 if you have dependents.

As far as "delving into their numbers" any further, well, if the examples I've given aren't enough for you to justify not taxing them, you're gonna have to find your own poor people. Shouldn't be hard these days.

Which is still significantly less than the $330,000 that he should be paying.

You guys keep changing my numbers.

In your $1M to $250k example, where did the extra $750k go?

don't ya think somebody paying $62k a yr in taxes is paying enough? while many are paying $0 or even profiting off of taxes.

<crickets>

<crickets>

In PC's hypothetical, the CEO made $1 million but only claimed $250K on his taxes. He didn't claim that extra $750K and didn't pay the taxes on it. So he paid $62,500 (25% of $250K) vice $330,000 (33% of $1 million).

I'm not sure why the differences in percentages. Ed was working with 25%, PC with 33%.

Tax options, investments, any number of ways that income can currently be 'legally hidden.'

No.

And I stepped on the crickets.

I presumed that Ed was stating tax on capital gains, while I was stating 33% income tax. At least that's what it was, for the top tax bracket, last year.

I think by "crickets" you mean "record skip." You can't ask the same question over and over after it has already been answered and then complain that no one is answering you. Well, I suppose you can, but you look like an idiot doing it...

No, tell me where the money went.

You guys are great at making up theoretical examples of ways to hide 3/4 of a million dollars.

Give me example of these "numbers of ways" to not pay taxes.

Based on the drivel above, I'm fairly certain you can't give me real life case studies.

I can't say I'm a fan of the trend that people have to get sheepish about how much they make. Fleming's answer should have been closer to "Actually Chris I make closer to $X and if you work hard maybe you can too." or the one I prefer "Yes Chris, I make a lot of money and if you don't like it you can stick it right up your ass sideways".


On the whole "rich people don't pay taxes" thing, this AP article goes in to that a bit. While it does say that some people with incomes over $1 million didn't pay income tax in 2009, that group made up less than 1% of people with incomes that high. It also doesn't state why they can do that. My guess is those people lost their asses in the market in 08 and are writing off the losses. It also says that group averages a tax rate of just over 29%.

http://news.yahoo.com/fact-check-ric...070642868.html

The latest trend seems to be giving up American citizenship. Investment losses, claimed against income, Seems to work. Capital losses, based on the devaluation of real estate holdings, is pretty popular this year. Purchasing real estate can result in deductions, for property that will almost certainly increase in value. And the usual moving of funds, to offshore tax havens is difficult, but possible.

Wow really, I believe it's really alot when you have people in this country and maybe yours that don't pay a dime and generally use more social services.

So how is Canada's tax set up everybody pay a set %or ?

What can I say? I'm a believer in the basic social safety net. I'm not willing to throw my fellow citizens under the bus, for my own selfish ends.

Federal tax rates for 2011 are:
- 15% on the first $41,544 of taxable income, +
- 22% on the next $41,544 of taxable income (on the portion of taxable income between $41,544 and $83,088), +
- 26% on the next $45,712 of taxable income (on the portion of taxable income between $83,088 and $128,800), +
- 29% of taxable income over $128,800.

Ontario tax rates for 2011 are:
- 5.05% on the first $37,774 of taxable income, +
- 9.15% on the next $37,776, +
- 11.16% on the amount over $75,550

Are there loopholes like deductions for kids and interest on homes?

W/o getting to personnal do you pay near 62k in taxes?

Kids and spouse, yes. Home ownership, no.

I'm somewhere over half that sum, in income taxes.

Do you?

Me, no
We, yes

Then there's $ 8-9k in property tax +tax on stuff...

Can't do it. Guess I know too many poor people and not enough rich people.

Social services like national defense? Because that's the biggest ticket item coming out of your income tax. Social security and Medicare, the next closest, are covered from separate deductions. In fact, the totals of all the "social services" that low income people are using* don't even match defense spending.


*supposedly more than high income people

So if a person doesn't pay taxes how do they pay for the military that defends them? Let Alone welfare and such.

Arguing about where the money goes is a diff topic entirely

So why is it all about fairness when it comes to taxing the rich but when it comes to social programs its "tough shit, life isnt fair?"

If the property you refer to does increase in value the tax man is going to want his cut in cap gains, whether at short term rates (regular income tax rates) or long term rates. Also most of the moving of funds offshore is not only difficult, if done to avoid taxes it isn't a loophole, it is illegal.

Well, for starters they generally are the military that defends them.

Indeed.

Damn. :(

This is a very disappointing post, PC.

Seriously. :td:

I'll leave you with this:

And this:
http://www.youtube.com/watch?v=5hfYJsQAhl0

If that's all you've got, by way of response, then I can't exactly work up to giving a good goddamn about it.

whens enough enough?

lets say you make $150k how much are you willing to keep contributing to "help" others, remember some/many people don't pay a dime into "the system".

is there widespread abuse of the system in CA, does everybody pay?

do people in escalades come up to the grocery store w/ their coach purses and done up nails and hair and pay for their groceries w/ a govt food stamp card?

If I made $150K, then I'd be willing to pay my income tax, as stated.

There is abuse in the system. There is in any system. I wouldn't refer to it as 'wide spread.'

Yes, it would seem that some people are able to purchase certain luxuries while on government aid. To me, this means that individual payouts are somewhat too high, as it indicates that more people could be helped at a basic subsistence level. Cable TV and cellphones aren't necessities. No, they aren't driving Escalades.

Lest we forget...


http://www.twowheelfix.com/showthread.php?t=17541

You know Ed, for years I thought (based on your posts) that you were kind of...dim.

OK, so that hasn't really changed, BUT, I do believe you're really on to something here.

Social services were designed to help the folks that fall through the cracks. Who better to finance those programs, than the poor, the elderly, and those stupid blind people? You just have to know that they are not reporting all the income they make, selling pencils on street corners.

It's clear, that old, blind, poor people, are ruining America for the rest of us.

The definition of "poor" here in the US, is somebody that makes around 22 grand, with a family of four. WTF are they doing with all the extra cash they must have laying around? They should be giving that shit to the Government.

So, I agree with you. Tough love is the only way we can stop this bullshit, so here's the plan: Raise the tax rate on the poor, elderly and the blind, to 99% of their income. What better incentive could their be, to make people wake up, and be rich, young, and well sighted?

Fucking 'A, problem solved.

JC

Always a good talking point. Not always good when reality comes into play.

C'mon Jesus.

This is why I have such a hard time not paying attention to these threads.

The "TAX THE RICH, THEY DESERVE IT" crowd seems to feed off emotion.

"OMG, if the Bush tax credits are extended, my blind Granny's taxes are going to be 110% of her income!"

I know your post is more a jab at Ed than a commentary on our tax code but the poor, the blind and the elderly all get tax breaks not available to "regular" citizens.

Currently, 35% is enough. If and when I ever make $380K, the point at which I'd have to pay 35% income tax, something tells me I'll still be able to squeeze by on $247K a year.

First, this assertion that you keep repeating is disingenuous, since many payroll deductions aren't refunded even if you've been determined to owe no income tax. Second, about half of these households that "don't pay a dime into the system" take in $20,000 a year or less. That's hard enough when you're single. Try housing and feeding a family on that. Even if you're only taxing them 10%, now try housing and feeding a family on $18,000. Hell, just housing.

I thought "where the money goes" was a different topic? Ok, assuming it's part of the conversation again:

Taking away food stamps is not going to put a scratch in the $133K I would be paying in income tax if I made $380K. Add up all the other discretionary spending of the 2011 federal budget, and you still don't come within $100 billion of the spending for the DoD alone. Again, that's before the wars. If you really want to pay less in taxes, tell your congressman to buy fewer Tomahawks, or close down Fort Hood.

As I've said, your income tax money isn't going to "help others." The vast majority of it is going to keep the federal government running. There are literally hundreds of places we could go to trim the fat before we start hitting up the $20K and under club for contributions.

How often is our military used to defend us? Afghanistan maybe, but I don't think I'd put Iraq in that category.

Reading through this, I can't help but wonder how many of you do your own taxes? When you reach a new tax bracket your entire income isn't suddenly taxed at that rate. For example, should you make $390k this year, only $10k would be taxed at the 35% rate, not all $390k.

This has never been more obvious than when bonus payouts come around. "ZOMG, this is going to put me in a new tax bracket and cost me more money!!!" as if their bonus just netted them a loss. :lol:

Just curious, why do so many people seem to think Bush's cuts are supposed to be permanent? At least, that's the impression I'm getting from reading the media and people who post comments. It's like they think those cuts were written into the Constitution or something. They do realize there's an expiration date, right? What, do they think taxes can only go down, not up? Do these people ever hear of economic cycles?

ah but you see you only have to make about 70k a yr to pay 35%, so now you really only make 45k a yr, and w/ other taxes you make less then that. and if your single w/ ni kids and no house.....you're gonna get bent.


if you only make $20k a yr, then don't have a household, stay single till you can afford kids or make do. and if you do decide to have a household when you only make 20k a yr, why should the gov't help you sustain yourself.


and yes, fix gov't spending.

right now, everyday, whether you believe in the war or not. they are there fighting. costing us $

In my defense, a lot of the numbers I'm throwing out are rounded / estimated so I don't have to spend an hour doing calculations for one post. I try to round against my argument; for instance, I took the entire US population into account when splitting up the DoD bill instead of just the tax-paying ages.

I agree.

So shouldn't that money be evaluated / re-considered? Just like social services?

I would put myself in the, "Tax the rich, they can afford it" camp.

I'm a single male, making a good living wage, with no additional deductions. You can be damned sure that I'm paying a pretty hefty amount on income tax. I can afford it. Would I like to keep more of my own money? Undoubtedly, but if they're going to take as much as they do, then I'm more worried about it being used properly.

And you think that the "tax the rich" people are the only ones, who play upon emotion? What about the "leave the rich alone" people, who base their position on rhetoric and selfishness?

If I made $20K a year, in Toronto, I would be living in someone's unfinished basement and eating Kraft Dinner. I would be in sore need of the universal health care, that we have up here, as I would be constantly sick.

As it is I'm one of those people, who makes more than $70K a year and is single.

35% in federal income tax alone, for $70K? In what country?


There is absolutely an aspect of personal irresponsibility. I myself would never try to start a family if we would only be pulling down $20K a year, but that doesn't mean nobody would. But there are also many many cases of people who started families only to see their income drastically reduced.

Regardless of how they came about, those households exist. And you can't squeeze juice from a raisin.

Are you including all sources of tax? If not, you really need to start paying someone to do your taxes for you. When you said before you're paying $62k in taxes, I didn't realize you were only making double that. :lol:
Fair enough, I try to do all that math only once a year myself. :lol: There are a LOT of adults that believe tax brackets are absolute though.

Right. And one of those wars was completely unnecessary. I don't see you railing against THAT misspent tax money. Do you work for a defence contractor?

well lets talk about illegals too then...........and their drain on our taxes.......

no, Oil and Gas, well currently Liquid Nat Gas proj. being built in Australia.

... that neither political party appears ready to tackle.

Then why aren't you up on arms about BILLIONS in misspent tax money?

Exactly.

yeah, so lets just tax "the rich" more thats the easy way........

Alright. Bottom line it for me. How much good do you really expect to do by "expanding the tax base" and taxing the poor more? How far will that go toward actually paying the country's bills?

Is it the Bachmann plan of "have everybody pay more, even if it's just a dollar?" Because that $300 million* might pay for the Pentagon's cafeteria budget.




*total US population, low income newborns included

It certainly was years ago, so they can't act like it's never been done before.

It's simple.....Either raise revenue, or cut spending. What kind of major cuts is the GOP proposing, if any?

Seems like they are proposing cuts to everything. Not big on specificity though. Just cuts.

This is where we agree fully.

The rhetoric is what drives me crazy, regardless of which side you're on. And yes, it is on all sides. "The jobs killing xyz act" is a great example of that.

That is exactly why I made the last post that was directed at you.

If you can give me concrete examples or use factual information, I'd love to readdress the debate but since it was based on pure rhetoric, I chose to leave it alone.

From the article goof2 posted:

I will grant you, that's a small number of millionaires. But they are clearing $1 million, so there was a loophole of some sort involved somewhere along the line. So what happens if, instead of taxing that 1470 people nothing, we tax them just 25% (assuming they only made $1 million)?

$1 million x 25% = $250,000
$250,000 x 1470 = $367,500,000

Beats Bachmann's "expand the tax base" plan, at least.

Your Google is strong.

Since it's not 1994 anymore, Google: Heroes Act of 2008.

Which really doesn't do anything, for those who have already renounced their citizenship, and merely provides a 10 year taxation extension for those who do. Off they go, to live in The Bahamas. Many of these folks are playing the long game, not the 'let's save some tax THIS year' game.

http://www.taxmeless.com/USCitizenRenounce.htm

:lol

I think another assumption people make is that the tax system is just about brackets. Another thing left out of the conversation is that the design of our tax system is not just about the government paying costs. It is designed to to help guide society. The tax system encourages individuals to make financial decisions deemed beneficial to society as a whole.

That's why person a who rents an apartment and spends all of the cash (whether earned through investment or paycheck) on toys or bull shit complains about tax brackets. Those who think long term and do things deemed good for both the individual and society as a whole pay significantly less. (but still complains about tax rates because lets face it, we are all selfish opportunists)
Purchase a home.
Have children.
Make long term investments.
Use money in ways that create income for others (aka:Job creators and all their "tax loopholes\deductions etc etc".


The case to be made is not whether the tax brackets or fair (because % are never really fair are they?), the real case to be made is whether the tax system should be promoting social change.

Should wealthier Americans pay higher tax rates (in their respective brackets) than the rest of us?
Silly question. Why do I say this?
Because folks who generate wealth and move into upper brackets tend to make different lifestyle choices and those choices have an impact on how they are taxed.
We have a complex tax system. Fucking around with the tax schedule has a big impact on those in the lower brackets. After a income level...it has a
less and less of an impact because the financial situation of those in the upper brackets is more complex.

Person A who make 60K a year - Its not fair that Person B pays a higher tax % than I do?
Person B - YEAH!!!! (secretly smirking because he paid a lower overall tax rate than person A)
Person C - Yeah!! (Pissed off because they paid exactly as the brackets stated


Summary - My elitist ass is tired of the average stupid tax bracket debate.

besides 401k, what other long term investments will help lower my(our) tax rate?

Not to be a prick or anything but the statistic is kinda useless.

1% paid 0.

The quote makes the silly assumption that 99% paid the full kaboodle.

For all I know
1% paid nothing
10 percent paid chump change
30% paid 5% total income
etc etc..

Wheres my fucking chart?
You cant post a quote like that without a spreadsheet or something..

Do you have an accountant?
Who does your taxes?

Would you accept an internet poll?

answer the question. my accountant doesn't handle my investments.

:lol: :lol: :lol: :lol: :lol: :lol: :lol:

:lol

Maybe you should talk to your accountant or find a better one.

If you want me to answer your question then I'll need all your financial information.
You going to pay me for doing all the work?

Right now?

Stocks.

If you paid $25 a share in May and you sell for $15 a share today, you may be able to write off of some. part or all your loss against income.

Wha-la, instant tax reduction. :lol:

Buy real estate, or pay an accountant to tell you :lol:

Who is your "accountant", H&R Block?

arthur the accountant, he's kin to bob the builder

Well you get what you pay for, when you hire a cartoon character to do your taxes.

H&R Block: "This is what you did the previous year and here is how your tax bill looks."
Accountant: "So, what are your goals for the coming year? Here are some tips on how to go about meeting your goals".