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Original post by tstrimp Quote: Original post by ddn3 What does it mean? Simple the vast majority of Americans bear an unequal burden of taxation while the corporations and the rich effectively have minuscule tax burdens compared to the rest.. The rest of who? The bottom 50% of the wage earners in this country pay 2.7% of the income tax. The bottom 90% pay just over 30% of the income tax. You're saying those bottom 90% are being unfairly taxed? The top 10% of wage earners in the country make 45% of the income and pay 70% of the taxes. What would fair be? Should the top 10% pay 80% of all income taxes? 90%? Maybe the top 10% should just pay all the taxes, would that be "fair" in your mind?

Granted I could be mistaken, but the rich at one time had a 91% income tax which was then brought down to 75%. The country didn't implode at either of those times. Also, the income of the rich is in large part from the income of poor. And if the top 10% paid all the taxes then they would get more income and therefore more profit anyway because now the middle-class and poor now have more capital to spend.

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Original post by way2lazy2care Quote: Original post by LessBread Quote: Original post by BronzeBeard Quote: Original post by LessBread The flat tax is a joke. Who said anything about the flat tax, read the site before making assumptions. The so called fair tax is the bastard cousin of the flat tax. The same people who used to push the flat tax now push the so called fair tax. I guess they realized just how unpopular the flat tax was... At any rate, a 30% sales tax is not a fair tax at all. It's a highly regressive tax that would compel poor people to subsidize rich people even more than they already do. It seems these days all that's needed to convince some people that something is good is to give it a name that makes it sound good. Try out this new rat poison. It's called candy... I think most people that want higher sales tax and lower income tax prefer weighted sales tax where necessities have little tax and luxuries carry heftier taxes.

I think that most people that want higher sales taxes and lower income taxes tend to have high incomes and live very frugally. I also think they say they prefer weighted sales taxes because they recognize that the regressive nature of sales taxes renders the idea unpopular and they don't want to be laughed off stage. If they want to place higher taxes on luxury items, they ought to be calling for a return to higher excise taxes rather than trying to get cute with sales taxes.

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Original post by BronzeBeard Quote: Original post by LessBread At any rate, a 30% sales tax is not a fair tax at all. It's a highly regressive tax that would compel poor people to subsidize rich people even more than they already do. Yet again lessbread you're making an ass out of your self by making false assumptions. First off it's a 23% sales tax, working people already pay this in multiple forms of taxation. (payroll, social, medicare, embedded taxes in goods, etc)

You chastised me for not reading the wikipedia entry, then demonstrate that you haven't read it either. To wit:

Fair Tax

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The sales tax rate, as defined in the legislation for the first year, is 23% of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes). This would be equivalent to a 30% traditional U.S. sales tax ($23 on top of every $77 spent—$100 total).[5]

It's a 30% sales tax and clearly, you're making the ass of yourself. Working people don't pay taxes at rates anywhere near that.

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Original post by BronzeBeard Secondly it's not a regressive tax, you're missing the entire section of the bill for prebates. My self, I make 18,000 a year, as of now I've paid ~$4,000 into taxes, at the end of the year I'll get about $700 back so all in all i'm taxed $3300 a year not including embedded taxes. With a FairTax, I'd only be taxed on consumption, And I'll be getting a prebate of $208 a month(based on my income). Being that a majority of my consumption is non-taxed anyway I'd actually have a crap load money more at the end of the year. This is the kind of wealth redistribution you liberals should looooove.

It's a highly regressive tax, otherwise prebates wouldn't be needed.

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Original post by BronzeBeard since you like graphs so much, choke on this from Boston University... Fancy Graph for bread boy

There's no need for you to be rude. That's not a very fancy graph. It's also not proof of anything.

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Original post by BronzeBeard The prebates are built to make sure that the tax isn't passed on to middle incomers, lower incomers actually make money in this system. And yes the rich will probably not be taxed as much.

It's a regressive tax with a phony sweetener tacked on to soften the impact on the poor.

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Original post by BronzeBeard All in hopes, and all likeliness, it'll spur rapid economic growth.

On the contrary, it will likely depress consumer spending and economic growth with it. What do you think would happen to consumer spending if the price of everything suddenly spiked 30%?

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Original post by BronzeBeard I will point out that the states of FL and TX only have consumption taxes, and these are also the two states that had the highest migration rates, and economic growth rates the last decade or so.

Correlation is not causation. In other words, don't assume that people are migrating to FL and TX because of taxes.

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Original post by LessBread Correlation is not causation. In other words, don't assume that people are migrating to FL and TX because of taxes.

what is your proposed cause?

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Original post by tstrimp Quote: Original post by ddn3 What does it mean? Simple the vast majority of Americans bear an unequal burden of taxation while the corporations and the rich effectively have minuscule tax burdens compared to the rest.. The rest of who? The bottom 50% of the wage earners in this country pay 2.7% of the income tax. The bottom 90% pay just over 30% of the income tax. You're saying those bottom 90% are being unfairly taxed? The top 10% of wage earners in the country make 45% of the income and pay 70% of the taxes. What would fair be? Should the top 10% pay 80% of all income taxes? 90%? Maybe the top 10% should just pay all the taxes, would that be "fair" in your mind?

I presume those figures come from Summary of Latest Federal Individual Income Tax Data (October 6, 2010). The bottom 50% also only took a 13% share of income and the bottom 90% only a 54% share of income. In addition, the bottom 80% only hold 15% of the wealth! (Wealth, Income, and Power, December 2010). Furthermore, corporate America just posted a record $1.6 trillion in third quarter profits (Corporate Profits Were the Highest on Record Last Quarter, November 23, 2010). Even as it's sitting on an additional $1.6 trillion in cash reserves (Cheap Debt for Corporations Fails to Spur Economy, October 3, 2010). And to top it all off, Wall Street is set to bestow a record $144 billion in executive bonuses this year (Wall Street Pay: A Record $144 Billion, October 11,2010). For comparison, the annual budget for the State of California is around $100 billion - that's all the schools, all the universities, all the prisons, all the police and firefighters... Instead of limiting the discussion to personal income taxes, we ought to expand it to include corporate taxes. That's what that graph I linked to earlier suggests.

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Original post by tstrimp The other thing you fail to consider is obscene taxes on the wealthy and businesses do not work. People and companies can move as is shown by the exodus from California. If you do this at a national level, you just force more companies to move operations over seas.

Obscene taxes on the wealthy worked pretty good during the 1950's, 1960's and 1970's. And when it comes to moving operations overseas, the way I see it, reducing corporate taxes and wealth taxes served to free up capital to allow corporations and the wealthy to move operations overseas. The very idea that companies have to be forced to move overseas is specious. The reality these days is that they have to be forced to not move operations overseas.

That link doesn't demonstrate why those companies are moving. It just asserts the reason as fact without offering any supporting evidence. For all we know, ebay might be leaving because Meg Whitman lost the election. And then again, it lumps together companies that have moved completely with companies that have partially moved leaving the reader to assume that they are moving rather than expanding their operations. More directly to your point, however, check out this graph.



It's not as informative as the other graph, but it shows that the overall level of taxation in California has stayed fairly consistent since the 1970's.

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Original post by tstrimp You obviously have to reach a balance point with taxes. There is a threshold where if the taxes go too high, people move or change the way their income is being earned. You also are not going to be able to tax your way out of a deficit. The government needs to reduce spending, and it should start with the military. Bring most of our troops home, and stop playing world police and we could save a lot of money. This of course is not something either major party is capable of. Even if they managed to reduce military spending, that money would likely just go into another program with no impact on overall government spending.

I agree that taxes must be balanced. I also agree that high taxes can change behavior. For example, if corporate taxes are increased to painful levels, but tax breaks are offered for hiring Americans, the result will likely be reduced levels of unemployment. I disagree that you can't tax your way out of a deficit. The idea is complete nonsense really. The US paid for WWII and the Cold War with high taxes, "obscene taxes on the wealthy" actually. I agree that it's time we stop playing world police. The Ron Paul-Barney Frank plan to scale back the Pentagon is the best proposal produced so far.

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Original post by way2lazy2care Quote: Original post by LessBread Correlation is not causation. In other words, don't assume that people are migrating to FL and TX because of taxes. what is your proposed cause?

I didn't propose a cause, but if you need alternatives...

Retirees seeking sunny weather in the case of Florida. Former Texans returning home to live near relatives during a recession. Katrina refugees in Houston.

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Original post by tstrimp The rest of who? The bottom 50% of the wage earners in this country pay 2.7% of the income tax. The bottom 90% pay just over 30% of the income tax. You're saying those bottom 90% are being unfairly taxed? The top 10% of wage earners in the country make 45% of the income and pay 70% of the taxes.

- You can hardly call the top 10% "wage earners" as a large percentage of their taxable income is in the form of capital gains which is taxed at 15%.
- The individual income tax has been the largest single source of federal revenue since 1950, averaging just over 8 percent of GDP.
- In 2008 the federal government collected $2.5 trillion.
- the Income tax makes up 45% of the total collected so $1.125 trillion (out of the total $2.5 trillion).
- Dual earner households have a higher median income at $67,348.
- But still, the median household income (single and dual combined) in the United States is $46,326. Yes, 50 percent of families live on $46,000 or less a year.
- Taxpayers on the 95th to 99th steps on the income ladder paid an effective income tax rate of 17.52 percent.

- In 2007 the top 400 taxpayers had an average income of $344.8 million, up 31 percent from their average $263.3 million income in 2006.
- That's a total of 137,920,000,000 (137.92 billion) dollars.
And they're only paying on average an effective rate of less than 20%. That's less than a lot of us by 10-15%.

http://www.tax.com/taxcom/features.nsf/Articles/0DEC0EAA7E4D7A2B852576CD00714692?OpenDocument


So really, the wealthy aren't getting screwed. The poster you responded to was in fact correct... it is the people on the bottom who are taxed unfairly. The wealthy paid higher taxes under Reagan. The country didn't implode then. Today we see embarrassing and shameless screams of bloody murder at the prospect of letting the Bush tax cuts expire. And yet, they are making more greater income then ever. Where are the jobs?

That's another myth that needs to be dispelled. Super wealthy tend to hoard wealth. The real job creators are the regular folk who have an idea, a good paying job, and ample savings that will allow them to take a risk and start a business. But you take away jobs, you take away savings, you take away free time and add tons of stress and people bunker down and don't spend and don't take risks and new jobs don't get created by the real job creators. (indeed what the dotcom boom did was lower the barriers to entry for starting new businesses. Even students in their part time could start multi-billion dollar companies from virtually no major upfront capital expenditures.)

[Edited by - Hypnotron on December 15, 2010 12:35:31 AM]

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Original post by LessBread I disagree that you can't tax your way out of a deficit. The idea is complete nonsense really. The US paid for WWII and the Cold War with high taxes, "obscene taxes on the wealthy" actually.

I can use the same argument. The country didn't implode in the 1910's when the top marginal tax rate was 7%.

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Original post by Alpha_ProgDes Granted I could be mistaken, but the rich at one time had a 91% income tax which was then brought down to 75%. The country didn't implode at either of those times.

EVERYONE paid more taxes in 1945. There was not an attempt to have a small fraction of the population support the entire country and by that measure it was more fair. The lowest tax rate was 23% and applied to all income under $28,000 in today's money and the average family paid 10% more in 1945 than what they would today and they sure as hell didn't have nearly half the working population paying no income tax at all.

It was also a different time. WW2 was a real war against a legitimate enemy and it was a war that the US people supported. The cost of WW2 (in lives and dollars) dwarfed our little tryst in Iraq and Afghanistan.

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Original post by Hypnotron - But still, the median household income (single and dual combined) in the United States is $46,326. Yes, 50 percent of families live on $46,000 or less a year.

I've done it. Not that hard depending on where you live. I also paid almost no federal income tax.

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- In 2007 the top 400 taxpayers had an average income of $344.8 million, up 31 percent from their average $263.3 million income in 2006. - That's a total of 137,920,000,000 (137.92 billion) dollars. And they're only paying on average an effective rate of less than 20%. That's less than a lot of us by 10-15%.

Are you deliberately confusing marginal and effective tax rates to try to make a point? You are stating that "a lot of us" are paying 30% to 35% effective federal income tax which is simply false. No one pays that much in effective federal income tax considering the top marginal rate is 35% on income over $374k.

The effective federal income tax rate for a family making $45,000 per year is around 5.6% if you only use the standard deduction and that burden drops to around 0% if that couple has a child.

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it is the people on the bottom who are taxed unfairly.

By what measure? The people on the bottom don't pay any federal income tax so I'm still a bit confused as to how they are being screwed...

Please keep in mind, I'm not saying that the rich should necessarily be taxed less. I'm just saying that the people who are crying about the rich not paying their "fair share" are full of shit.

I'm glad you pointed out my error when talking about effective tax rates.

The average tax rate on the taxable income of the extremely wealthy is less than 20%. Whereas the tax rate on taxable income for someone making 34k - 370k a year is 25 to 35% (or in the case of some modest capital gains that lower the average, still very close to the actual rate for their respective brackets).

So how is that fair again? How are the people on the bottom (the people in the bottom 90%) not getting screwed in comparison?