Inequality in American Income ... Something Wrong Here.

[Steve]

I agree with most of your points, we're mostly in agreement.


My whole thing is, I don't hate the rich, I want to be the rich.
I got everything but the money part down.

I hope that I don't come off as hating the rich. I just don't believe they're victims.

Bill, the only problem I have with a consumption tax is that the tax burden then becomes effectively regressive. If you make $100k per year and I make $10k per year, our milk still costs about the same... and the taxes we pay would be the same too. Your gasoline costs the same as mine. While you might fill up a Bentley and I'm filling up a Ford F250, we're both paying the same, and consequently the same amount of taxes.

I see your points and agree completely that a strict "payroll" tax isn't equitable. I personally believe that taxing revenue is the best way to go, and it would be pretty easy to do. Just my opinion.

 

[ballen0351]

I'm all for fairness in taxation. They should give as much, proportionally, as everyone else. They don't. I've said many times on this board that a flat tax on ALL income is as fair as it gets. Dividends, royalties, honoraria, wages, interest, capital gains, gambling... the works.

In my opinion, that's fair.

I would love to see the Fair tax or flat tax I think they are both better then what we have now.

I see this argument all the time that the rich pay a lower tax rate the then poor I just dont see that as being true.
Per the IRS website
if you make
0-8375 you pay 10% tax rate
8376-34000 15%
34001 -82400 25%
82401-171850 28%
171850-373650 30%
373650 and above 35%
and starting in 2013 the top two brackets go up even more

So how can you claim the poor pay more then the rich? The top 5% of all wager earners pay over 50% of all taxes. The bottom 50% of all tax payer only pay in about 3% of all tax dollars.

 

[K-man]

It's true, especially if you bother to research it past a basic google search. Though I recognize that denial is a natural coping mechanism LOL

The historic inevitability was addressed by Yale Historian Paul Kenedy in his book "The Rise and Fall of Great Powers" printed way back in 1988.

Of course, a few well known and simple examples would be France in 1789 and most recently the former Soviet Union. It doesn't matter if you think it's "true" or not... it happened and it can happen in the good ole USA as well.

Not to mention the recent GFC and the problems in Portugal, Italy, Ireland, Greece and Spain and total financial collapse of Greenland.

The GFC was caused by excessive greed and people inventing things of no value like derivatives to make huge profits. As to the US economy, just for how long is the national debt sustainable. The $US has diminished by 40% against the $Au. You can't just keep printing money to fuel the excesses. :asian:

 

[K-man]

So what how does that concern you? If thats what the shareholders decided was adequate for him to leave then so be it. Unless the Govt decided to bail out the company with Tax payer dollars then thats a different story. Now truth be told hes not the first CEO to fail and get paid yet he was your example. Hmm could it be that he insulted your country and your people and thats why your upset and it has nothing to do with his bonus.

I'm a shareholder in the company and all our superannuation funds are major shareholders. This guy dropped the value of the company 50% and gets paid $14m to break his contract.

Sorry Guess Im a realist I dont believe everyone should make the same wage no matter the job. I dont believe its immoral for a CEO to make more then the cleaning lady. I dont find it crazy for a Doctor or Lawyer or CEO to make more then I do since Im only a police officer.

I didn't say that. You did.


Your entire post was bitter

Not only you can't read, you also can't comprehend.

Enough is enough so whats your solution? Set wage caps on jobs? Take from the rich give to the poor? Who gets to decide who has made too much? Who too rich?

Read the posts. They are all on the same page. We are not saying one person isn't entitled to be paid more than another. We are discussing inequity.

BTW, self depreciation is admirable, but not an excuse. ("I'm only a police officer.")

As I said in my first post "Just don't ask me for the solution. I'm not that bright." :asian:

 

[Steve]

I would love to see the Fair tax or flat tax I think they are both better then what we have now.

I see this argument all the time that the rich pay a lower tax rate the then poor I just dont see that as being true.
Per the IRS website
if you make
0-8375 you pay 10% tax rate
8376-34000 15%
34001 -82400 25%
82401-171850 28%
171850-373650 30%
373650 and above 35%
and starting in 2013 the top two brackets go up even more

So how can you claim the poor pay more then the rich? The top 5% of all wager earners pay over 50% of all taxes. The bottom 50% of all tax payer only pay in about 3% of all tax dollars.

Oh come on, Bill. Surely you understand that the tax rate above applies only to net taxable income. We do have a progressive tax schedule. But the effective tax rate is much less progressive, because people who are in higher tax brackets are much better at, and have access to more legal ways to, shelter their income. Getting into middle income brackets and even, now that the housing market has crashed, up into the middle class, you have fewer and fewer wage earners able to itemize their deductions. That means that they're not even able to take advantage of the most basic deductions, such as donations.

I have also posted in the past that there are thousands of people up into the millionaire range who legally pay zero taxes. That's right. Goose egg. There are thousands more who pay under 10%.

I'm not saying that everyone should pay other than his or her share. What I'm saying is that as you talk about how the poor should pay more and how the rich are victims, I believe that the rich should pay their share. Period. Every one of them.

I don't believe that we should pity Scrooge McDuck.

 

[Bill Mattocks]

I see your points and agree completely that a strict "payroll" tax isn't equitable. I personally believe that taxing revenue is the best way to go, and it would be pretty easy to do. Just my opinion.

I see your point also, but I've become convinced that revenue-hiding is much easier to do than consumption-hiding. And given that a good-sized portion of our economy is based on illegal revenue (drug traffic, etc), I see a consumption tax as capturing a large portion of that; a bonus making the criminals pay their share.

 

[Twin Fist]

the problem is, too many people dont pay any taxes at all.

like the bottom 30% or wage earners, who pay NOTHING in taxes.

 

[LuckyKBoxer]

Oh come on, Bill. Surely you understand that the tax rate above applies only to net taxable income. We do have a progressive tax schedule. But the effective tax rate is much less progressive, because people who are in higher tax brackets are much better at, and have access to more legal ways to, shelter their income. Getting into middle income brackets and even, now that the housing market has crashed, up into the middle class, you have fewer and fewer wage earners able to itemize their deductions. That means that they're not even able to take advantage of the most basic deductions, such as donations.

I have also posted in the past that there are thousands of people up into the millionaire range who legally pay zero taxes. That's right. Goose egg. There are thousands more who pay under 10%.

I'm not saying that everyone should pay other than his or her share. What I'm saying is that as you talk about how the poor should pay more and how the rich are victims, I believe that the rich should pay their share. Period. Every one of them.

I don't believe that we should pity Scrooge McDuck.

Proof??
or are you just towing the company line..
seriously lets see the proof on this one..
there are some people who pay no taxes, but its because they are paying it elsewhere.
deducations are deductions for a reason. Not because its there to get us who use them off of paying taxes, but they are there to not punish us for using money in specific ways that either pay off costs of business, or donations, or putting money into specific places where it will work towards the future..... sure there are cases of fraud, but I know people in the poor and middle income brackets who do jobs under the table and dont report it, who claim more in deductions then they should, who dont claim casino winnings, etc.
its not the rich screwing everyone over like you seem to like to think

 

[Big Don]

the problem is, too many people dont pay any taxes at all.

like the bottom 30% or wage earners, who pay NOTHING in taxes.

IIRC, the number was 47% last year.

 

[billc]

Steve, I believe in a consumption tax basic foods, from grocery stores and medicine are exempt. I think I heard that somewhere.

 

[CanuckMA]

Steve, I believe in a consumption tax basic foods, from grocery stores and medicine are exempt. I think I heard that somewhere.

But how do you devide what is 'basic foods'?

How about basic furniture? basic clothing?

The concept of a consumptin tax, and we're usually talking about one high enough to eliminate income tax, is that it becomes increasingly complex as exempt items are addes, or taxed at different rates. Like the flat tax, it sounds good as a 10 second sound ite, but is not practical in the real world.

The concept of a progressive tax, on all monies received, with no exemptions, save for a minimume income level before tax is taken, makes more sense.

 

[Bill Mattocks]

But how do you devide what is 'basic foods'?

How about basic furniture? basic clothing?

The concept of a consumptin tax, and we're usually talking about one high enough to eliminate income tax, is that it becomes increasingly complex as exempt items are addes, or taxed at different rates. Like the flat tax, it sounds good as a 10 second sound ite, but is not practical in the real world.

The way I see it, you tax everything sold. Tax luxury items higher. You can tell the difference between a bag of groceries and a boat, for example. We already do this for many things anyway; states have had 'sin taxes' on such items for years. It works.

The concept of a progressive tax, on all monies received, with no exemptions, save for a minimume income level before tax is taken, makes more sense.

It makes more sense until you start thinking about what is 'monies received'. If I buy stock and it goes up in value 10% by September, then another 20% by December, then down %30 by April, what's my basis profit or loss? Now you're back into the kind of figuring we already try to get people to do. And what of the money they hold overseas that we can't easily track, or property in lieu of liquid assets held outside the USA? A person can have a huge net worth and still arrange to 'receive' a fairly small amount of that on an ongoing basis; and that's all via legal or semi-legal ways of avoiding taking actual profits and thus having income to declare. People have to spend their money on something; tax it when the sale happens. And capture the huge off-the-grid revenue from things like illegal drug profits. Drug dealers and illegal aliens buy groceries, too. The rich ones buy boats, cars, and houses as well. Take a cut. Even if they're operating in the underground economy, get some tax revenue from them.

 

[Steve]

Proof??
or are you just towing the company line..
seriously lets see the proof on this one..
there are some people who pay no taxes, but its because they are paying it elsewhere.
deducations are deductions for a reason. Not because its there to get us who use them off of paying taxes, but they are there to not punish us for using money in specific ways that either pay off costs of business, or donations, or putting money into specific places where it will work towards the future..... sure there are cases of fraud, but I know people in the poor and middle income brackets who do jobs under the table and dont report it, who claim more in deductions then they should, who dont claim casino winnings, etc.
its not the rich screwing everyone over like you seem to like to think

If they're not paying taxes, they're not paying taxes. The information is easily verified on IRS.gov.

We went down this road before, in a thread that Bill Mattocks posted thanking taxpayers. In light of the directino that this thread is headed, I went back and reread the entire thing. I still believe that my position was both reasonable and correct, although I let the issue drop out of consideration to those who were getting upset, like Brian.

What spurred me to look into the data available at irs.gov was the chart Bill posted. I saw the percentage of people in the upper brackets who paid no taxes and wondered how many people that represented. Look it up. Knock yourself out.

And I will say this one time just to be very, very clear, becaue this is where people got butthurt in the last thread. I don't think that "the rich" are screwing anyone. I don't think that "the rich" are inherently dishonest. I DO think that they're doing just fine and aren't being victimized. I ALSO think that rich people, like everyone else, should pay THEIR SHARE. I'll go ahead and make a text file of this paragraph, because I know many people will fail to read it the first time.

@billcihak, are you looking at some kind of rule book for tax code I'm not aware of? While I would hope that a national sales tax would exclude unprepared food and other essentials, that would be completly up to the bill passed by Congress and signed by the POTUS.

@Bill Mattocks, stocks are easy. You tax them just as you do now, at the moment they are converted to cash. An income tax is exactly that, tax on income. An asset generates no income unless it's liquidated. Dividends paid to stockholders is also income. Very simple.

And again, just to be clear, I am not completely opposed to a national sales tax, but I believe that a tax on all income is more fair.

 

[LuckyKBoxer]

If they're not paying taxes, they're not paying taxes. The information is easily verified on IRS.gov.

We went down this road before, in a thread that Bill Mattocks posted thanking taxpayers. In light of the directino that this thread is headed, I went back and reread the entire thing. I still believe that my position was both reasonable and correct, although I let the issue drop out of consideration to those who were getting upset, like Brian.

What spurred me to look into the data available at irs.gov was the chart Bill posted. I saw the percentage of people in the upper brackets who paid no taxes and wondered how many people that represented. Look it up. Knock yourself out.

And I will say this one time just to be very, very clear, becaue this is where people got butthurt in the last thread. I don't think that "the rich" are screwing anyone. I don't think that "the rich" are inherently dishonest. I DO think that they're doing just fine and aren't being victimized. I ALSO think that rich people, like everyone else, should pay THEIR SHARE. I'll go ahead and make a text file of this paragraph, because I know many people will fail to read it the first time.

what are you smoking Steve? that article says nothing about thousands of millionaires paying no taxes.
please show me where it says that thousands of millionaires are paying no taxes.
I call BS on this one.

besides do you know how many deductions you have to have at a million plus income to qualify for a zero income tax?
my guess is that category is one of, if not the heaviest audited as well.

 

[Sukerkin]

http://www.guardian.co.uk/commentisfree/2010/oct/22/vodafone-tax-case-leaves-sour-taste

http://www.guardian.co.uk/business/series/tax-gap

Not America, I know. But the principles are the same. The poor are relieved, the middle pays, the top evades.

 

[Steve]

what are you smoking Steve?

That's a whole 'nuther thread, LuckyKBboxer!

that article says nothing about thousands of millionaires paying no taxes.
please show me where it says that thousands of millionaires are paying no taxes.
I call BS on this one.

Look at the chart. As I said before, that chart was what got me thinking about it in the first place. Below is a chart posted by Bill Mattocks in the OP of that other thread. His thrust was to thank the people who actually pay taxes, which isn't a bad thing at all, IMO. And, while 83.6% of income earners between $10k and $20k paid no taxes, I was surprised to see anything other than ZERO above $100k. My effective rate is about 30%, so the idea of even one person who made over a million who pays no taxes makes me a little cranky. Much less, 1.5% of them.

I thought, surely they can't mean 1.5% of millionaires pay no taxes. As I said, all of the information's easily verified if you take a look at the stats page on irs.gov.

besides do you know how many deductions you have to have at a million plus income to qualify for a zero income tax?

I wish!

my guess is that category is one of, if not the heaviest audited as well.

And to be clear once again, I'm not suggesting and have never suggested that they're sheltering their income illegally. My point is that they are sheltering it so effectively using any and every legal loophole that their effective tax rate is 0%. As we discuss whether or how poor people should pay their "fair share" we must also, IMO, discuss whether or how the rich should do the same. We presume the rich is being victimized because we're told so over and over. I do not believe that the wealthiest 10% of our population are victims.

 

[LuckyKBoxer]

That's a whole 'nuther thread, LuckyKBboxer!

Look at the chart. As I said before, that chart was what got me thinking about it in the first place. Below is a chart posted by Bill Mattocks in the OP of that other thread. His thrust was to thank the people who actually pay taxes, which isn't a bad thing at all, IMO. And, while 83.6% of income earners between $10k and $20k paid no taxes, I was surprised to see anything other than ZERO above $100k. My effective rate is about 30%, so the idea of even one person who made over a million who pays no taxes makes me a little cranky. Much less, 1.5% of them.

I thought, surely they can't mean 1.5% of millionaires pay no taxes. As I said, all of the information's easily verified if you take a look at the stats page on irs.gov.I wish!And to be clear once again, I'm not suggesting and have never suggested that they're sheltering their income illegally. My point is that they are sheltering it so effectively using any and every legal loophole that their effective tax rate is 0%. As we discuss whether or how poor people should pay their "fair share" we must also, IMO, discuss whether or how the rich should do the same. We presume the rich is being victimized because we're told so over and over. I do not believe that the wealthiest 10% of our population are victims.

well I am curious how that number comes out to 1.5%....
btw that is not millionaires... its people who made over a million dollars for the year. oh and over a million dollars in cash as well... I am pretty sure that there 1.5% of the people making over a million in cash income is not anywhere near 8000 peoplel
there are plenty of millionaires who dont make anything close to a million a year...
I have to wonder how many people in our coutnry made over a million dollars that year first of all.
and then out of those 1.5% that did not pay any taxes I wonder how that broke down.
I imagine that people like Buffet who made well over a million dollars but may have donated ten times what he earned for the year to various charities was probably given a pass... and in cases like that I have no problem.... I am not saying that is what happened, but I really would like to see what the circumstances were.
You are assuming the worst case scenario and are getting pissed about it..... also did it say that all of those 1.5% were legally paying no taxes, or did they just not file and are being gone after by the IRS?
to many things that are unknown here..
I can not look at that and get pissed off, because there is not enough information to be pissed off about.
I have heard of people in public office who have donated their entire paychecks to charity for various reasons... whether they did and whether it was for various reasons, I would have little issues with them not paying taxes on that money... would you?

 

[ballen0351]

Steve Im looking all over the IRS website I cant find any info on 1.5% of millionaires not paying taxes. I then goggled it thinking well if its true it would be on every left wing blog out there and still nothing. Can you point me to the right place where you found this info.

 

[Sukerkin]

A quick Google found this:

http://www.csmonitor.com/Business/2010/0415/Tax-Day-101-How-some-millionaires-can-owe-no-taxes

Not the same chart but the same point.

I also found this which, tho' politically biased, does have some good visuals and is written by a professional economist:

http://www.american.com/archive/200...zine-contents/guess-who-really-pays-the-taxes

And this one is interesting as it gives a bit of background on how things got that way:

http://www.cbsnews.com/stories/2009/04/15/politics/otherpeoplesmoney/main4945874.shtml

 

[LuckyKBoxer]

Thanks Sukerkin,
I see where Steve got his 8000 figure now.
those stories give a much different feel then what Steve was giving.
Like I said, there is generally a damn good reason why someone who makes over a million in cash income in a year is not paying any taxes.
there are cases of fraud, but they are generally gone after,
also that same fraud is all through the system from top to bottom, but it only seems to matter when the top guys are doing it, not the bottom guys.