Value-added: the tax increase that may fly

[luckytxn 2,264]

everyone should pay their "fair share" - i.e. a flat tax.

But but, then the poor will have a fit, then the Socialists will not go for it, then the media will have to go to bat for the Socialists as usual. Can't be fair can we?

[ready4ONE 5,400]

Our tax policies are *extremely* progressive. The top 5% are already paying 60%

of ALL taxes collected in this country. The bottom 48% are paying *NO* income

taxes; in fact, they are getting paid. How much more do you want to penalize success?

The "How much more do we plan to 'punish' the rich for being successful?" line is pretty much played when you look at the reality in the good old USA. 20 percent of the population directly controls an astonishing 85 percent of the wealth. The real question is how much more do we feel the rich need to benefit?

The Wealth Distribution

In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2009).

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

[Texanadian 10]

Still very similar. The problem with Capitalism is that wealth tends to get concentrated into a small percentage of the population. Progressive tax policies are just like any other tax scheme in the sense that they encourage or discourage some types of behavior. One of main reasons why we had such a large Middle Class in the 50's was because of our progressive tax policies discouraged companies paying out lofty sums of money to their top executives. Now we have a huge disparity between the rich and poor in this country and the free market capitalists tell the working class its simply their fault for not working hard enough.

1950's? Who would want that tax system? In 1955 there were 24 tax brackets and the tax rates ranged from 20% to 91%. The large middle class that we think of back then would be poverty in today's world. 1400 sq ft houses where couples had 5 children. 1 family car. Eat out two to three times a year. Capitalism has improved our living standards over the last 50 years.

Is there anybody who honestly believes that we're undertaxed? And that the spenders in D.C. spend wisely and thrifty on spending projects? The debate shouldn't be Bush vs Obama or 35% vs 39%. The debate should be simply what is a reasonable amount of money to collect on income tax and what should those rates be. What do YOU think YOUR own tax rate should be? Personally I don't think income taxes are a smart thing. They discourage work. They discourage growth. Doesn't matter if you're making 30K or 300K. Ask anybody who puts in the effort to work overtime how much difference their taxes are on their paystub.

In 1999, we spent 1.6 trillion dollars. I don't see what the benefits of spending twice that much now are.

[mawilson 2,133]

But but, then the poor will have a fit, then the Socialists will not go for it, then the media will have to go to bat for the Socialists as usual. Can't be fair can we?

Check out the "Fair Tax" proposal.

These guys claim we can eliminate income and FICA taxes (and thus the IRS)

completely and replace them with a 23% Federal sales tax. The results are

supposedly tax revenue neutral.

No-one will pay a single dime in taxes until they've taken care of their basic

needs - everyone will get a universal "prebate".

Interesting stuff.

Edited April 19, 2010 by mawilson

[Ali G. 37]

Roll back the Federal Government to the year 2000 levels and then we could abolish the IRS right now. No personal income tax means more money for discretionary spending. More spending then more production. More production then more jobs. More jobs then more of everything.

More taxes then less money in everyones hands. Less money then less spending. Anyone else see the logic?

Actually it's a dumb logic. Perhaps you can enlighten us how we pay for infrastructure or the military.

[Ali G. 37]

Check out the Fair Tax proposal.

These guys claim

Claim being the key word. The fact is that the GST/VAT not only works but works well; hence its extensive use by every other industrialized country. The fair TAX is an unpractical gimmick thought up by the likes of Rush Limbaugh and co, in order for them to pay even less tax.

[Texanadian 10]

The "How much more do we plan to 'punish' the rich for being successful?" line is pretty much played when you look at the reality in the good old USA. 20 percent of the population directly controls an astonishing 85 percent of the wealth. The real question is how much more do we feel the rich need to benefit?

The problem with the stats about this group "controls" this much of the money while this group "controls" this much of the money is irrelevant. Nobody controls anything. If Bill Gates walks into the grocery store next to you, he's not controlling your money any more than if Joe Q Public is standing next to you. Just because somebody else has more money doesn't mean you have less.

Check out the "Fair Tax" proposal.

These guys claim we can eliminate income and FICA taxes (and thus the IRS)

completely and replace them with a 23% Federal sales tax. The results are

supposedly tax revenue neutral.

No-one will pay a single dime in taxes until they've taken care of their basic

needs - everyone will get a universal "prebate".

Fairtax isn't a 23% sales tax. It's 30%. They are the biggest sneeks about this. They want to replace an income tax with a sales tax. But then refer to the sales tax rate by using income tax jargon. Example. You buy something that costs $100 before tax. With the Fairtax it will cost you $130. The Fairtax people will say "Well you're paying 23%. Because 23% of 130 is $30."........But we all know what just happened. It was a 30% sales tax that just occured. I don't buy their argument that since you're replacing an income tax system, that you should rate it in income tax terms. The reality is that if you're replacing an income tax with a sales tax, it should follow the same sales tax math as any other sales tax. If your state sales tax rate is 8%, do you think of it as 8%? Or as 7.4%?

Fairtax is interesting. But I don't get why used things wouldn't be taxed. Also, I can see the lobbyists pounding on the doors in DC to get their special interest not taxed. Or taxed at a lower rate. Houses, hybrid cars, energy efficient household goods, university tuition. The list goes on and on. There will need to be a FRS (Fairtax Revenue Service) in order to audit all companies to make sure they're actually charging the tax. The underground market will continue.

At the end of the day, we're still looking at paying 3-4 trillion dollars a year to the federal government somehow. I don't really care if the money comes out of my left pocket or my right. It's still coming out.

[Ali G. 37]

Our tax policies are *extremely* progressive. The top 5% are already paying 60%

of ALL taxes collected in this country. The bottom 48% are paying *NO* income

taxes; in fact, they are getting paid. How much more do you want to penalize success?

That's because the top 1% (~3.08 million) owns 43% of the financial wealth. Furthermore, the top 10% (~30.8 million) own 87.8% of the countries investment assets - which generate revenue and wealth. So that leaves 277,000,000 Americans to fight like dogs over 12.2% of investments left. The 277,000,000 Americans also (ironically) have 73.4% of the nation's debt.

"Penalizing success" is a horseshit argument that holds no water.

[luckytxn 2,264]

Check out the "Fair Tax" proposal.

These guys claim we can eliminate income and FICA taxes (and thus the IRS)

completely and replace them with a 23% Federal sales tax. The results are

supposedly tax revenue neutral.

No-one will pay a single dime in taxes until they've taken care of their basic

needs - everyone will get a universal "prebate".

Interesting stuff.

Yes I know what the fair tax is. Right now the poor get to pay no income though and most even receive money back right now. They do pay the sales tax that everyone else does. Now the fair tax means they still pay no income tax but will receive nothing back and have to pay a lot higher sales tax. Do you think they will be happy about this? These are the Socialists darlings so they will cry and come to their aid and stop it or lose their votes. The media will cry about it as they are the Socialists lap dog.

[Ali G. 37]

Fairtax isn't a 23% sales tax. It's 30%. They are the biggest sneeks about this. They want to replace an income tax with a sales tax. But then refer to the sales tax rate by using income tax jargon. Example. You buy something that costs $100 before tax. With the Fairtax it will cost you $130. The Fairtax people will say "Well you're paying 23%. Because 23% of 130 is $30."........But we all know what just happened. It was a 30% sales tax that just occured. I don't buy their argument that since you're replacing an income tax system, that you should rate it in income tax terms. The reality is that if you're replacing an income tax with a sales tax, it should follow the same sales tax math as any other sales tax. If your state sales tax rate is 8%, do you think of it as 8%? Or as 7.4%?

Fairtax is interesting. But I don't get why used things wouldn't be taxed. Also, I can see the lobbyists pounding on the doors in DC to get their special interest not taxed. Or taxed at a lower rate. Houses, hybrid cars, energy efficient household goods, university tuition. The list goes on and on. There will need to be a FRS (Fairtax Revenue Service) in order to audit all companies to make sure they're actually charging the tax. The underground market will continue.

At the end of the day, we're still looking at paying 3-4 trillion dollars a year to the federal government somehow. I don't really care if the money comes out of my left pocket or my right. It's still coming out.

Nobody likes taxes but it's a crucial revenue stream for any country. It's crazy to think that anyone actually advocates deliberately making their country poor, by removing any revenue stream, and effectively allowing the small minority of American that are rich to keep all of their money.

The so-called fair tax model does not work and for a number of reasons. For starters, anyone with a clue would earn their money in the United States and then spend it abroad; totally bypassing the tax system. What happens during a recession? Who pays the $1.3 trillion dollar military bill if people slow consumption?

[Ali G. 37]

Yes I know what the fair tax is. Right now the poor get to pay no income though and most even receive money back right now. They do pay the sales tax that everyone else does. Now the fair tax means they still pay no income tax but will receive nothing back and have to pay a lot higher sales tax. Do you think they will be happy about this? These are the Socialists darlings so they will cry and come to their aid and stop it or lose their votes. The media will cry about it as they are the Socialists lap dog.

So you think the poor are working the system? How about you walk in their shoes and then come tell me how awesome their lifestyle is. I guarantee you that the majority of the poor would rather earn my salary and pay my tax amount than remain poor - living paycheck to food stamp.

Your extensive use of the word socialist in every argument and without any clarification, illustrates that you don't have a clue of what you are talking about. It's just funny to me that people living in places you define as being "socialist" (like AUS), could buy your azz three times over and still have change left over.

[mawilson 2,133]

Yes I know what the fair tax is. Right now the poor get to pay no income though and most even receive money back right now. They do pay the sales tax that everyone else does. Now the fair tax means they still pay no income tax but will receive nothing back and have to pay a lot higher sales tax.

You obviously didn't read it. They will still get money back.

[DEDixon 39]

So you think the poor are working the system? How about you walk in their shoes and then come tell me how awesome their lifestyle is. I guarantee you that the majority of the poor would rather earn my salary and pay my tax amount than remain poor - living paycheck to food stamp.

Your extensive use of the word socialist in every argument and without any clarification, illustrates that you don't have a clue of what you are talking about. It's just funny to me that people living in places you define as being "socialist" (like AUS), could buy your azz three times over and still have change left over.

it sounds more and more like you are advocating for yourself... do you work?

[mawilson 2,133]

"Penalizing success" is a horseshit argument that holds no water.

I work hard for my money. I work days, nights and weekends with very little

down time. I'm not some senile Warren Buffett type who spends his time

twiddling his thumbs and collecting capital gains. Yet with all the taxes

(FICA, federal, state, and city), I have to work into the month of May (or even

June) to make my first dime. Now THAT's horseshit, my friend.

The so-called fair tax model does not work and for a number of reasons. For starters, anyone with a clue would earn their money in the United States and then spend it abroad; totally bypassing the tax system.

That would be stupid - things are more expensive abroad, even with a 20% surcharge.

[Ali G. 37]

it sounds more and more like you are advocating for yourself... do you work?

How would I be advocating for myself? I am ineligible for any of the shitty benefits available here. I have now used and seen two types of systems and approaches and I call it as it is.

PS You don't want me to start talking about personal and family wealth.