Are the poor in America really not that poor?

[logamus]

emily, why is it more fair for someone who happens to make 150k to pay a higher % rate in taxes than someone who makes 30k? to me the fairer thing would be to say everyone pays x% on their income regardless of what your income is. the trick to income taxes is getting people to actually pay. like you said people put money in offshore accouts and such to avoid taxes. thats why a national sales tax would work. then it wouldnt matter how much you made, what bank you use, where you live, or even your nationality. everyone would pay tax on what they buy, even forigners on holiday would help pay. in that system it works like a charm.

[Rooster]

"I agree that each person should not have to pay more to the gov't than what they get to keep. But making everyone pay the same amount hurts the middle income. The rich are not hurting in any way paying 50% or more. Believe me Bill Gates, Donald Trump or the other rich people have plenty of it and they prolly dont even miss it."


Close the loop-holes and make the tax rate percentage based. Who are you to say who misses what? Why should someone who makes more, pay a greater pecentage? Should they pay more becuase they are smarter? Should they pay more becuase they have a better work ethic? Should they pay more becuase they didn't waste their money? Why should people be punished for success, while we reward the incompetent for failure.

[Albinonewt]

A national sales tax would not work. That tax would discourage consumption. Consumption is what makes our economy function. Bad idea to mess with that.

[Emily]

ok a flat tax. lets say 15%. lets say i make 35,000 a year and you make 100,000 a year. i would pay 5,250 in taxes, not counting deductable or credits. Now with you making 100,000, you have plenty of money to invest. so on your tax return you only are taxed on (we'll say half) 50,000, so you pay 7,500. you have make over half of what i made for the year but you are able to put money in programs that are not taxable, so you are paying 2,250 more in taxes than i am. How is this going to help the country if the majority of it's citizens are being screwed? Maybe a sales tax would work. I haven't looked into that fully at this point. but income tax is based solely on income and if you find ways to invest that income you don't have ot pay and that's what the rich are doing. On paper, the way it is suppose to work is correct in my opinion. You pay on the amount you earn with some deductions and credits but others have found ways to lower the amount they earn and that's where the problem lies. that's why the laws change all the dang time and have made filling you income taxes such a hassle. why do you think ppl hate tax season? I'm an accontant and will not do taxes. I refuse. I'll do mine and some easy one but i will not get into the mess that has been made out of it.

[Albinonewt]

Originally posted by Emily
I agree that each person should not have to pay more to the gov't than what they get to keep. But making everyone pay the same amount hurts the middle income. The rich are not hurting in any way paying 50% or more. Believe me Bill Gates, Donald Trump or the other rich people have plenty of it and they prolly dont even miss it.

Of course they miss it. They worked hard for it. They were the best at what they do to earn that money. The so called progressive tax structures punish success and reward failure and mediocrity. That is not the recipe for a rich future.

Flat tax that exempts the povery level. That's the answer.

[Emily]

Rooster I'm not even going to waste my time on you.

[Emily]

Originally posted by Albinonewt
A national sales tax would not work. That tax would discourage consumption. Consumption is what makes our economy function. Bad idea to mess with that.

Agreed

[Emily]

Originally posted by Albinonewt


Of course they miss it. They worked hard for it. They were the best at what they do to earn that money. The so called progressive tax structures punish success and reward failure and mediocrity. That is not the recipe for a rich future.

Flat tax that exempts the povery level. That's the answer.

Ok so i'm rewared with failure becasue I don't make hundred of thousands of dollars a year? Some people are best at what they do but don't get paid the big bucks for it. Some have lied, cheated and stole to get where they are. Do was call that success?

[Emily]

Flat tax

Newt, I have a great deal of respect for you. Convince me that a flat tax would work.

[Rooster]

"Now with you making 100,000, you have plenty of money to invest. "

Investments are taxed. Normal investments are taxed twice. 401K, IRA, et. al. are taxed when the money is taken out.

And obviously, if the money is gotten illegally, its not going to be taxed at all. So that is a completely invalid point.

[Emily]

Originally posted by Rooster
"Now with you making 100,000, you have plenty of money to invest. "

Investments are taxed. Normal investments are taxed twice. 401K, IRA, et. al. are taxed when the money is taken out.

And obviously, if the money is gotten illegally, its not going to be taxed at all. So that is a completely invalid point.

When it's taken out yes it's taxed, but there are 401K's that are not pre-taxed. so my point is valid.

[Albinonewt]

[QUOTE]Originally posted by Emily
ok a flat tax. lets say 15%. lets say i make 35,000 a year and you make 100,000 a year. i would pay 5,250 in taxes, not counting deductable or credits.

Yeah, but those deductions make a big difference. Since I would exempt the fist $20,000 of income you end up paying only about $2,250.

Now with you making 100,000, you have plenty of money to invest. so on your tax return you only are taxed on (we'll say half) 50,000, so you pay 7,500.

You ignoring two big things. First, the money I invest goes directly into the economy to create jobs, produce goods, and generate taxable revenues. So the government isn't losing that money, it's just getting it from someone else. And second, my investments can make money that will be taxable later (or they'll lose money in which case I no longer have the full 100,000 to be taxed on).

you have make over half of what i made for the year but you are able to put money in programs that are not taxable, so you are paying 2,250 more in taxes than i am.

In that example (using the 20,000 exemption) I pay DOUBLE your taxes AND put 142% of your gross income back into the economy.

Also, in that example I made more then double what you did. If I made half that would have been 17,500.

How is this going to help the country if the majority of it's citizens are being screwed?

Where do you think your 35,000 is coming from? It's coming from the 50,000 that I invested in the company that's paying you for your services. That's the benefit.

Maybe a sales tax would work. I haven't looked into that fully at this point. but income tax is based solely on income and if you find ways to invest that income you don't have ot pay and that's what the rich are doing.

No, a sales tax would not work. And investing money is the thing that makes our economy function. DO you have any idea what happens to the corporate structure if you take away investment?

On paper, the way it is suppose to work is correct in my opinion. You pay on the amount you earn with some deductions and credits but others have found ways to lower the amount they earn and that's where the problem lies.

And that's because of the progressive rates. Once you switch to flat tax then tax compliance issues will rapidly disappear.

that's why the laws change all the dang time and have made filling you income taxes such a hassle.

That's because the people that create the tax codes are complete morons and don't understand that the more complexity you add the worse compliance will be. Simple is better. Flat tax is better.

why do you think ppl hate tax season?

I love tax season. It pays for all my toys.

I'm an accontant and will not do taxes.

So am I. I do taxes for a living.

I refuse. I'll do mine and some easy one but i will not get into the mess that has been made out of it.

Well, it has been made into a complete disaster over the years. Every single "tax reform" just makes the system worse and worse.

I can't stress enough, Complexity bad, simplicity good.

[Albinonewt]

Re: Flat tax

Originally posted by Emily
Newt, I have a great deal of respect for you. Convince me that a flat tax would work.

Here's what makes a flat tax work, it's completely class neatral. It doesn't matter if you're a janitor or a million dollar a year broker. You pay the same percentage of your income that everyone else does (less the poverty level). What this does is as follows:

First, it makes filing taxes the easiest thing in the world. The billions of dollars a year spent on guys like me is overnight returned to tax payers.

Second, its good for compliance reasons. The reason there are so many ways to hide money from the government is because the code is so complex and there's so much incentive to try to do so. Once you take away the loop holes (by simply saying ALL income is taxed at x%, where x is a very low number) then compliance increased. There's simply no reason to risk the harsh penalties for being caught because the tax itself is less burdensome.

Third, it's neutral. It's not possible to complain about anyone's fair share when everyone pays the same share. With no more tax shelters and other fancy tricks everyone's tax burden is in direct correlation to their income.

Flat tax is absolutly the way to go. A simple and low tax structure is the most economically stimulative measure the government can take. Look at the Dow. Since the dividend tax cut the market is up to 10,500. That's an amazing jump in a short time.

[Albinonewt]

Yeah, I changed my quote, primarily due to your next post that showed that your posistion was not as intractible as I originally belived it to be. Once you showed a very profound open mindedness I honestly felt bad about taking a swing at you, so I changed it.

But, I think you posistion on investment and on taxes shows a profound misguidance on a very fundamental bedrock principle of our economy. So ask questions, and I'll try to get you over from the dark side of the force

And I don't do this often (ask CB), but I apologize for the shots I took in that post, which is why I changed it.

[Emily]

Thank you Newt. I deleted my reaction before you apologized. I'm not a tax accountant and never want to be. Tax Accountants are a special breed and I'm not made up of that.