Discussion in 'Politics & Law' started by Brandon77, Apr 13, 2008.

  1. Brandon77

    Brandon77 Registered Member

    I just have a quick question.

    How is it that Obama can continually speak of raising taxes and "ending tax breaks for the rich" who "weren't even asking for them"? How is it that he speaks of tax breaks for the poor and those who truly need them?

    I'm not saying that the poor should not receive aid and help. I don't think the rich should not pay more taxes than the poor.

    The problem here lies in the numbers that often go unmentioned.

    On average, almost 40% of Americans do not pay taxes due to insufficient levels of income.

    About 97% of all taxes are paid by the richest 10% of the population.

    The rich, who supposedly have been getting "tax breaks" shoulder the majority of the tax burden, and pay taxes in the 35% tax bracket. The poor, whom Obama wants to give "tax breaks" to, pay no taxes. How do you give a tax break to someone who simply doesn't have any taxes to cut?

    How are the rich getting a tax break by shouldering the majority of the tax burden?

    How can those who pay no taxes get a tax cut?

    I just don't understand the numbers here. Somebody help me.

  2. Swiftstrike

    Swiftstrike Registered Member

    Brandon I would like to see where you get those statistics. As a tax accountant I can tell you right now those are just flat out wrong. Roughly 60% of the nations taxes are paid by the working class.

    Most americans file and pay their taxes. They may file them incorrectly and either over and underpay but almost all Americans pay their taxes.

    Your place of work withholds most of your taxes during the course of the year. Your typical w-2.

    The people that are more likely to evade taxes are the rich. Why is that? Because the federal government requires you to pay your taxes throughout the fiscal year. Many of the rich do not work or do not have a w-2 that witholds their earning every two weeks. A lot of their earnings are from Capital gains, dividends, interest, etc. That income does not have any federal or state witholdings at the time recieved.

    So they make 4 quarterly payments throughout the course of the year.

    These payments are based off their estimated total tax as of last year and expected income levels for the current year.

    My point is the government monitors these payments and yes their is a penalty for not paying timely but it is likely that some 1099 does not get reported or an oversees bank account is not reported. It is just simply easier to avoid paying th government. Not to say the rich dont pay their taxes. But the working class certainly does. Although the poor who work under the table obviously do not but their income is significantly less than say a person in the 35% bracket not reporting an overseas capital gain fo 500,000.

    I hope that clarified your misconception.
    Last edited: Apr 14, 2008
  3. generalblue

    generalblue Where is my Queen?

    They should have one set tax bracket to where everybody pays the same amount of percentage a year and that would be fair. The poor always get the handout while the middle class always gets screwed.
  4. Swiftstrike

    Swiftstrike Registered Member

    A flat tax is constantly proposed pretty freqeunlty but shot down every time.

    A flat tax would benefit the rich more than the poor or the working class but it would really alter the economics of the U.S.

    The effects of a flat tax is difficult to predict.
  5. R1pperZ

    R1pperZ Registered Member

    Thank god the tax-man stepped in, I know those numbers are way off.

    The wealthy do not burdon most the taxes from america, and they do not deserve to pay a less percentage of tax..

    Money comes form business and america business is taxed..

    Aye generalblue, i think 'tax bracets' are jacked..
  6. pro2A

    pro2A Hell, It's about time!

    Actually I would have to half agree with you here. link

    I would agree with the Fair Tax more then the Flat Tax. Where lowering the taxes on the rich would stimulate the economy and create jobs, the lower class would more then likely be taxed more then they are currently by having a flat tax. So more people would be working, but more lower class people would also be paying more taxes.

    I think we should get rid of the whole tax system and get the Fair Tax. It would boom the economy. The rich would create jobs, the poor would work, and the cost of living would be cheap.
  7. CMK_Eagle

    CMK_Eagle Registered Member

    I'm curious to know what you consider "working class". According to the IRS in 2004 the top 10% earned 44% of all income, but paid 68% of all taxes. Unless "working class" includes quite a few in the top 10%, it's mathematically impossible for them to pay 60% of all taxes.
  8. Swiftstrike

    Swiftstrike Registered Member

    Working class has been broadened. Even stats from 2004 are a bit obsolete Eagle. I believe working class is considered roughly in the tax world from 30,000 to 100,000-120,000 agi per individual. 6 figures is slowly no longer becoming the divider between working and upper class.

    Most of the returns file are joint returns. Combining salaries of two people. So if their AGI is 160,000 per year and each individual makes 80,000 they are still "working or middle class". So from a look at your table yes some of the people in the top 10 percent ARE considered working class.

    Also if you read the fine print they are excluding AMT which the IRS makes a TON of money from each year since it IS a tax rate that doesn't adjust to inflation. And more and more individuals are falling into AMT each year. Middle class people...

    86 million just in AMT a lone in 2004.
  9. CMK_Eagle

    CMK_Eagle Registered Member

    If you prefer to go from the most recent stats available, in 2005 the top 10% made 46% of all income, and paid 70% of income taxes. If you look at the top 1%, the numbers are even more skewed. They make 21% of all income, and pay 39% of income taxes. In other words, as Brandon originally claimed (albeit with poor data), the wealthy shoulder a significantly greater share of the tax burden.

    That's an odd definition of working class. In 2005, $31,781 AGI was 75th. I'm really supposed to believe that 75% of Americans are poorer than working class?

    More and more, but AMT still falls far more heavily on top earners than it does on the middle class.
  10. Swiftstrike

    Swiftstrike Registered Member

    I am simply saying from my perspective one is not really considered "upper class" unless you are in the 28% or higher bracket. The firm I work for only works with the upper class so we take hardly any clients with less than 100,000 AGI. The ones we do, are usually client's kids or friends of the partners.

    Perhaps the upper class do shoulder a heavier burden but it was certainly not 97%. I am saying by looking at that chart some people that are in the top 10% are still considered working class. At least from my firms perspective.

    AMT is hitting more of the working class and it is a growing problem in the accounting community.
    Last edited: Apr 14, 2008

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