Are the poor in America really not that poor?

[Rooster]

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

So you are saying my retirement fund should be taxed twice? What sense does that make? You don't pay taxes when it goes in, becuase you pay taxes on it when it comes out. Its like having taxes defered on that money for 30 years, but it still gets paid. And I shouldn't have to pay taxes twice becuase I have the forsight to save some money so I won't be a drain on the government in my old age.

[logamus]

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.

how so? state and local governments use sales tax and somehow things are still consumed.

[Albinonewt]

Originally posted by logamus
how so? state and local governments use sales tax and somehow things are still consumed.

A great example. Look at what happens in places with a high state or local sales tax, like New York City. Mayor Michael "The Death of New York" Boomburg has taxes on various things so high that the people of New York just don't buy them there anymore (like ciggarettes, eveyone buys them over the border or online). Taxing consumable discourages consumption. It also punishes folks of lower income, since there is no way to discrimiate on a sales tax (fo instance, on a flat tax you can exempt certain levels of income, but how do you do that at the mall?).

A national sales tax would do one of two things (possibly both). Either discourage consumption or encourage non-compliance (ordering online, from Canada, etc).

[Emily]

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

So you are saying my retirement fund should be taxed twice? What sense does that make? You don't pay taxes when it goes in, becuase you pay taxes on it when it comes out. Its like having taxes defered on that money for 30 years, but it still gets paid. And I shouldn't have to pay taxes twice becuase I have the forsight to save some money so I won't be a drain on the government in my old age.

NO it should not be taxed twice. That is totally wrong for it to be. It should either be taxed when it comes out or as income on your tax return. I jsut so disagree with taxing it twice.

[Emily]

The Income tax program is just so screwed up, it's not funny. And we know who's all getting rich off of it....the tax accountant...lol Newt . Maybe Newt sould run for a position in the gov't and straighten our butts out...lol

Newt for President

[logamus]

Originally posted by Albinonewt


A great example. Look at what happens in places with a high state or local sales tax, like New York City. Mayor Michael "The Death of New York" Boomburg has taxes on various things so high that the people of New York just don't buy them there anymore (like ciggarettes, eveyone buys them over the border or online). Taxing consumable discourages consumption. It also punishes folks of lower income, since there is no way to discrimiate on a sales tax (fo instance, on a flat tax you can exempt certain levels of income, but how do you do that at the mall?).

A national sales tax would do one of two things (possibly both). Either discourage consumption or encourage non-compliance (ordering online, from Canada, etc).

well there again just as with the flat tax it cannot be an outragious amount. there are also possibilities for a poverty exemption. in texas they have the star card. the is like a food stamp atm card. there was such a problem with people selling their food stamps for pennies on the dollar just to have cash that they went to a system that was far more difficult to fraud. im sure most of the grocery stores in your neck of the woods have a shopper card where you get discounts on items you buy when you have said card. well the same could hold true here. if you are in the state welfare program you just give the checkout person your card and then your tax is waived on your purchases up to x amount. but again this is based on a tax that is not sky high to begin with. if its applied across the board i dont really think there would be much opposition to it, espically when you take into account that your paycheck wont have any of those unsightly deductions anymore.

[logamus]

i will also add that i am not against the flat tax. i just think that while the flat tax fixes a large number of problems there are still those that would slip through the cracks. supply and demand works in taxation too, the more people paying tax (supply) the lesser the taxing for those who pay (demand). flat taxes work, but how many waiters, bartenders, strip dancers actually file anything above the minimum requied anyway? the sales tax doesnt change the taxing, just how its collected.

[vf-xx]

Originally posted by 1stdeadeye
As for k-12 education, here in Jersey, it costs more then 1/2 of my property taxes. Plus I send my children to private schools, so I pay it twice!

Not to be rude but that's bs, it's your CHOICE to use a private school and therefore pay twice. It's your choice on where you live and therefore what public schools are available.

My family is middle income and I went to public school, but my folks moved to where they live now specifically to get into a good public school system (along with a few other reasons)

[Restola]

Originally posted by Emily
Why should someone making 35,000 a year pay the same amount of taxes as someone making 1 million?

$35,000 x 17% = $5,950
$1,000,000 x 17% = $170,000

And for a few people that seem confused, this discussion is generally about federal taxes only.

[Emily]

Originally posted by Restola

$35,000 x 17% = $5,950
$1,000,000 x 17% = $170,000

And for a few people that seem confused, this discussion is generally about federal taxes only.

well yeah, what do you think we were talking about? and i was talking about the same %.

[Kevmaster]

why shouldn't they? They're obviously paying more in monetary value, but why should it cost them even more for the same things you're getting? They're getting the same national defense, same national highways, same trade regulations, same everything. Why should person A have to pay 30% of what he makes for it when person B pays 10% of what he makes for it?

[Jeffy-CanCon]

Newt, I am surprised (and impressed) that you would advocate a flat-tax system you admit might put you out of work as a tax accountant.

I DO think the tax system needs to be simplified, to the point where the anyone can do their own taxes without the help of lawyers and accountants. I also agree that government should be streamlined, and do its best to not waste taxpayer money. And I agree that a national sales tax reduces consumerism. But I will respectfully disagree that a flat-tax income tax system is best.

I think we are looking at the tax figure X from the wrong point of view. We can't say X is fair for everyone, and go from there. The equation has to start at the other end, with "the government needs Y dollars" or else you end up in the deficit situation both our governments have run for too long. That only ends up cheating your children and grandchildren, who will see their tax dollars go to pay interest on money we spend today. But if we start at Y dollars needed by the government, we obtain tax rate X by figuring Y into Z (national taxable income). It is entirely likely that X will be a rate that seems very high to people in the lower income groups. Everyone still pays the same prices for food, fuel, utility bills, after all. $3k off my $40k hurts me more than $12k off your $100k, which hurts more than the $749.7k a baseball player pays off his $5M.

I think Marx was off base with his "from each according to his abilities, to each according to his needs", but not far off. Being wealthier in North America doesn't necessarily mean you are smarter or work harder, but it does mean that you are benefiting more form the economic system. If you pay a little more (percentage-wise) to the political system that safeguards that economy, I think that's reasonable.

Maybe it's just because I remember my Sunday school lessons, and the parable about the poor woman and the rich man giving to the poor box.

[Rooster]

"I think Marx was off base with his "from each according to his abilities, to each according to his needs", but not far off. Being wealthier in North America doesn't necessarily mean you are smarter or work harder, but it does mean that you are benefiting more form the economic system. If you pay a little more (percentage-wise) to the political system that safeguards that economy, I think that's reasonable."

While your system would work great in a utopia, we do not live in one, nor will we ever. Sure a person who makes more can pay more. Thats common sense. Thats why the rich drive in BMWs, and the poor drive in Kias. They can afford to pay more. Now it is obvious what benfit a more expensive car brings, and what more, it that person's own choice whether or not to purchase it. However, the benifit of paying a greater percentage of one's income to the government is not obvious, in fact, it is ludicrus. The government does not protect our economic situation, or economy works in spite of the government's inceasent medling. And whats more, the rich have no choice but to pay a higher percentage.

A flat percentage is deffinately preferable to what we have now. The percentage is based on the GDP for the previous year, and the government's budget. If the percentage gets too high, the budget must be cut. There would be a percentage break at the poverty line. Credits for children would stop at four. If you have any more children, you are are responsible for bearing the whole burden.

[impostal22]

i'm gonna make this quick cuz i have stuff to do...

the big flaw that i see with a flat percentage is that the government won't get nearly as much money as it is currently getting. the only way to ensure it gets enough money is to keep the % high enough that the upper tax bracket is paying about the same. meaning..the lower brackets are paying even more than they already are. i'm no expert, so this is what ihave come up with through just brief thought. i just wanna know if this isn't the case..what is the casE?

[1stdeadeye]

Originally posted by Emily
Some say it's bad that the rich pay so much in taxes. Income tax was formed so you pay a % of your income to run this country.

No, I think ALL of us pay too much in taxes!

In whole, a flat tax would screw the tax payers that are middle income (which is the majority of americans) and the low income. Why should someone making 35,000 a year pay the same amount of taxes as someone making 1 million?

But they wouldn't. The percentage may be the same, but sure not the dollar amount!

Each year that tax laws change or are redifined due to people finding loop holes or the gay areas. Usually this is the rich finding these.

That is why we have the Alternative Minimum Tax (AMT). Once you reach a certain level of income, you pretty much get no deductions!

And this arguement over the top 5% paying 50% of the taxes doesn't seem right to me. The rich spend a lot of money to finds ways not to pay taxes. There are so many tax defered programs out there that they are using. Do you really think Bill Gates or Donald Trump pays taxes on everything they make? They don't. Their money is invested and put into programs where they dont have to pay taxes on it and they live off of interest or pay out from stocks and bonds. Lets say someone made 50 million in one year and they lived off of 500,000 that year, they will only pay taxes on the 500,000 because the rest went into tax defered programs or bought stocks and bonds, etc. Bill Gates does this. And then there are the losses that can be taken off the taxes due and credits and so much other stuff. The rich are the ones that benifit.

You are wrong. If you earn, $50m you will pay tax on it unless it is deferred compensation. If deferred, you will still pay taxes on it sooner or later, it is not tax free. I would bet Bill Gates pays more in taxes per year then you and I will make in a lifetime.

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.

You are very wrong here. You can only tax people so far. Yes Bill Gates makes a ton of money. How many people does he employ? How many people earn a living in some way shape or form off of his back? Disincent him to work hard with confiscatory taxes and maybe not all those people will be working.

As for them having plenty, that is a myth. These people don't sit around with piles of money. It is usually tied up in illiquid investments.

Finally, make the taxes too high and guess what, they will leave! Prime example. John Kent Cooke, son of Jack Kent Cooke earned $400m on the sale of the Washington Redskins. His family had owned the team for decades! Due to the capital gains tax at the time, Mr. Cooke renounced his US Citizenship and became a citizen of the Bahamas. Because of wanting too much, Uncle Sam saw not one penny of the $400m! Mr. Cooke splits his time between his virginia estate and Bahamian home! Enough of the wealthy do this, and we are all screwed.