Divisive The Rich Don't Pay Their Fair Share In Taxes

[dDave]

Here's a highly divisive topic.

Basic premise is that a lot of politicians (and people across the United States) feel that the rich don't pay their fair share in taxes. I tend to agree with that sentiment, but not in a way these people would find acceptable. I believe the rich pay far too much in taxes and that the system is extremely unfair and rigged against them. I would be much more in favor of a flat tax or a fair tax or some sort. (something along the lines of Herman Cain's 9-9-9 plan would be good)

To be clear, I feel I am also paying far too much in taxes. I fall in the 30-40% range which is crazy, no one should be paying taxes that high. I don't even make all that much to begin with. If you want to help people, cut the government way back, cut government spending dramatically, let people keep more of their own paychecks, and people will thrive.

I'll chime in more once we have a few opinions posted.

 

[CaptainObvious]

The top 20% pay about 90% of all federal income tax. The bottom 50% pay about 3% of all federal income taxes. So yes, the rich pay more than their share of federal income taxes.

That said, just half of all taxes collected by the government comes from federal income taxes. When it comes to OASDI, social security and disability insurance, everyone pays 12% up to about $130,000. So someone making $60,000 pays 12.4% while the baseball star making $20 million a year, he only pays 12.4% up to $130,000. After that he pays nothing. The 12.4% hits the guy making $60,000 a year hits the baseball star so much harder.

I don’t know if I’m on board with a flat tax, for pretty much the same reason the OASDI tax is unfair, but some changes do need to be made. The less the wealthy are taxes, the more there is for investment and expansion. At the same time, the poor shouldn’t be paying the same percentage of their income towards taxes as the wealthy.

 

[dDave]

The top 20% pay about 90% of all federal income tax. The bottom 50% pay about 3% of all federal income taxes. So yes, the rich pay more than their share of federal income taxes.

That said, just half of all taxes collected by the government comes from federal income taxes. When it comes to OASDI, social security and disability insurance, everyone pays 12% up to about $130,000. So someone making $60,000 pays 12.4% while the baseball star making $20 million a year, he only pays 12.4% up to $130,000. After that he pays nothing. The 12.4% hits the guy making $60,000 a year hits the baseball star so much harder.

I don’t know if I’m on board with a flat tax, for pretty much the same reason the OASDI tax is unfair, but some changes do need to be made. The less the wealthy are taxes, the more there is for investment and expansion. At the same time, the poor shouldn’t be paying the same percentage of their income towards taxes as the wealthy.

Somewhat agree. I think if we substantially cut the budget and then put in a flat percentage for everyone then it would actually be very fair and everyone would reap the benefits from it.

I do understand that percentages still hit lower income people slightly harder but it's also really nice to get a raise and your money goes much further than it would have before. To be clear, I think everyone needs a tax cut across the board (those paying taxes anyway). Our government spending is way out of control, only way to rein it back in is to cut, cut, cut.

 

[CaptainObvious]

I do agree with that, I believe EVERYONE should be paying less in taxes. OASDI, federal income tax, capital gains taxes, ALL taxes across the board should be cut. Way too much money is paid to give needless bureaucratic jobs that basically do nothing.

 

[dDave]

I do agree with that, I believe EVERYONE should be paying less in taxes. OASDI, federal income tax, capital gains taxes, ALL taxes across the board should be cut. Way too much money is paid to give needless bureaucratic jobs that basically do nothing.

A lot of it is also stolen. It’s absurd that the government thinks they own 35% of what I earn and then want to charge me 8% sales tax when I try to spend the remaining 65% and then charge me a few thousand in property taxes after that.

Unfortunately, we are a socialist country in many ways. It is immoral to take from those that earn something to give to those that won’t work or are simply greedy.

One of the best things about a flat tax is that people would not vote to increase taxes because that would increase their taxes as well. I think that’s what we need, a good motivator for people not to vote for increased taxes. More taxes means more government control which means we are more and more living under government overreach and tyranny.

Right now it’s all class warfare. The lower and middle classes are obviously much larger than the upper class so everyone pretty much votes to take more from the rich and the rich just have to take it. It’s the tyranny of the majority.

I realize to pull this off the government budget would need to be cut way back. That’s fine, over 50% of government programs are unconstitutional anyway. Cut them.

 

[Impaired]

Flat taxes have problems too - I was big fan of them but was talked out of them in favor of a national sales tax.

Given a consumer driven economy, capturing the tax only when money is SPENT encourages both saving and investment. It also has the benefit of being able to tax illegal income, since criminals also spend money.

 

[dDave]

Flat taxes have problems too - I was big fan of them but was talked out of them in favor of a national sales tax.

Given a consumer driven economy, capturing the tax only when money is SPENT encourages both saving and investment. It also has the benefit of being able to tax illegal income, since criminals also spend money.

This idea does have merit and is worth discussing.

I'm not an expert but I imagine that would have the unintended consequence of black market becoming very popular as a method of tax evasion if you were to drive sales tax way high. Like you said, criminals also spend money, I think they would be very likely to turn to additional means of acquiring materials illegally to avoid paying taxes. Cash transactions also can't be easily tracked.

Could always just leave sales tax where it is (roughly 4~10% depending on your area) and cut out income tax entirely. All we would need to do to accomplish this is rein in government spending like we've never seen before and cut out all the insane bureaucracy and illegal (ie unconstitutional) government programs.

One thing that intrigues me is the state of Wyoming, neighbor to my native Colorado. Wyoming has no state income tax and has somehow pulled off a 4-6% sales tax. They also have very low property taxes and maintain a state debt of less than $1 Billion in total (50th out of 50 states in debt, in other words, the least debt of any state). Not perfect (as they are still in debt) but from a tax perspective, that sounds like a very good way to run a state compared to any other. There are a few other states run in a similar manner.

 

[Impaired]

I'm not an expert but I imagine that would have the unintended consequence of black market becoming very popular as a method of tax evasion if you were to drive sales tax way high. Like you said, criminals also spend money, I think they would be very likely to turn to additional means of acquiring materials illegally to avoid paying taxes. Cash transactions also can't be easily tracked.

Could always just leave sales tax where it is (roughly 4~10% depending on your area) and cut out income tax entirely. All we would need to do to accomplish this is rein in government spending like we've never seen before and cut out all the insane bureaucracy and illegal (ie unconstitutional) government programs.

One thing that intrigues me is the state of Wyoming, neighbor to my native Colorado. Wyoming has no state income tax and has somehow pulled off a 4-6% sales tax. They also have very low property taxes and maintain a state debt of less than $1 Billion in total (50th out of 50 states in debt, in other words, the least debt of any state). Not perfect (as they are still in debt) but from a tax perspective, that sounds like a very good way to run a state compared to any other. There are a few other states run in a similar manner.

I have no doubts it would create a big black market.
Barter might increase drastically.

I'm okay with that. Black markets will always exist. They are policed now.

The US economy is the consumer. We used to make things, but then we got all crazy and started weekends, and 40 hours weeks, and benefits - and our workers cost too much to make our product affordable, as long as people here prefer a cheap flat screen made by slave labor, to an expensive one, made here. People say they don't support slave labor but their shopping choices have proven that is a lie.

 

[CaptainObvious]

Flat taxes have problems too - I was big fan of them but was talked out of them in favor of a national sales tax.

Given a consumer driven economy, capturing the tax only when money is SPENT encourages both saving and investment. It also has the benefit of being able to tax illegal income, since criminals also spend money.

I’ve never been a fan of flat taxes. The poor gets hit harder. 10% of $50,000 is tougher than 10% on someone making $500,000.

I like a national sales tax. It will create bigger black markets, but can encourage saving.

I’ve never liked the term “slave labor”. Someone making $10/day in a certain economy isn’t the same as that person making it in our economy. It provides a cash flow that person wouldn’t otherwise have. The guy in China making an iPhone or Nike shoes would starve to death without those $10. And those $10 goes further in China than it does here.