Jump to content

Progressive Income Tax


ScubaCinci
 Share

Recommended Posts

How so? If I make $500k annually and am taxed at 40% and you make $40k annually and are taxed at 20% rate, what benefit am I getting from the extra taxes I paid above and beyond what you get? In fact, if you are below the poverty line, not only do you likely not pay taxes but are government subsidized in some way (food stamps, etc) so in effect, the person paying nothing gets more benefits.

Link to comment
Share on other sites

4 minutes ago, ScubaCinci said:

How so? If I make $500k annually and am taxed at 40% and you make $40k annually and are taxed at 20% rate, what benefit am I getting from the extra taxes I paid above and beyond what you get? In fact, if you are below the poverty line, not only do you likely not pay taxes but are government subsidized in some way (food stamps, etc) so in effect, the person paying nothing gets more benefits.

Where to start.  Your effective rate is going to be nowhere near that 40%.  Probably more in the 20's.  My effective in this scenario is probably 10%.  So not as great a difference as you are trying to say.  I always find it interesting that people in this country view making enough to pay a significant amount in taxes as some huge burden on them.  In countries such as India it is a great honor to be making enough to have to pay taxes.  Do you not think the person making $40k would gladly pay more taxes to make $500k?  This country does not continue to function in any manner with say a flat 10%.  So person making $500k if you wish to continue to live in a country enabling you to make $500k you have to pay more.  Or hey you could stop making $500k if you don't want to pay so many taxes and just live off $40k.  See how you like that. 

Link to comment
Share on other sites

Yes but, at the current methods, at the high end, a lot of tax breaks and deductions open up to reduce the tax liability. Not many of us make it there. Only the top income levels get there. And it requires a lot of business and charity investing and creation. So basically the cash flow is still intact back to the middle and lower tiers. But directed by individuals instead of the national government. Times change, people used to do charity and business by free will. Now it's mandated. Take it away and where does it go. Free will might go the other way, and it's gone. We aren't the same people, society, and not the same government. Just thinking out loud. I don't have real answers.

Link to comment
Share on other sites

Ok, I'll play.

There are a lot of government services that the rich folks use that the poor folks don't ues.  The poor people are not flying around using airports and TSA and all that.  The poor people are not driving 1000's of extra miles on the roads on their motorcycles (cuz they don't have one) causing wear and tear. Or using the national parks.

Link to comment
Share on other sites

I am not in any way saying the current tax system is perfect.  By which I mean the amount of paperwork and shenanigans required, deductions etc.  Pretty much the opposite however I do not agree that a progressive system is bad. 

Link to comment
Share on other sites

 

51 minutes ago, MichaelS said:

Where to start.  Your effective rate is going to be nowhere near that 40%.  Probably more in the 20's.

Look it up - 39.6%...and if you're a small business owner, it gets worse.

 

51 minutes ago, MichaelS said:

Do you not think the person making $40k would gladly pay more taxes to make $500k?  This country does not continue to function in any manner with say a flat 10%.  So person making $500k if you wish to continue to live in a country enabling you to make $500k you have to pay more.  Or hey you could stop making $500k if you don't want to pay so many taxes and just live off $40k.  See how you like that. 

You still haven't said why the video isn't an accurate representation (outside of it being normalized by using triplets, same house, job etc for illustration purposes). BTW, I don't make $500k a year, it was just an example.

 

Link to comment
Share on other sites

52 minutes ago, Tonik said:

Ok, I'll play.

There are a lot of government services that the rich folks use that the poor folks don't ues.  The poor people are not flying around using airports and TSA and all that.  The poor people are not driving 1000's of extra miles on the roads on their motorcycles (cuz they don't have one) causing wear and tear. Or using the national parks.

They may or may not use it, but it's still available to them and that's the point.

Link to comment
Share on other sites

1 minute ago, ScubaCinci said:

 

Look it up - 39.6%...and if you're a small business owner, it gets worse.

 

You still haven't said why the video isn't an accurate representation (outside of it being normalized by using triplets, same house, job etc for illustration purposes). BTW, I don't make $500k a year, it was just an example.

 

I know what the top rate is.  But who actually pays that much, pretty much nobody including the guy in your example making $500k.  "The richest 1% pay an effective federal income tax rate of 24.7% in 2014; someone making an average of $75,000 is paying a 19.7% rate." 

To your question about the video.  The guy that has the stay at home wife and don't save.  They don't have nearly as much income to enjoy.  As grumpy cat went into above they don't have the income to enjoy some of the government paid for benefits.  It doesn't take into account so many nuances of the tax code.  It is just too simple an example to be truthful. 

Here is a fun example of exactly what myself and others have said.  The wife and I when both working paid a lower effective tax rate than with just me working because we no longer have the same level of deductions because we downsized and aren't paying so much in taxes. 

Link to comment
Share on other sites

Just now, MichaelS said:

Here is a fun example of exactly what myself and others have said.  The wife and I when both working paid a lower effective tax rate than with just me working because we no longer have the same level of deductions because we downsized and aren't paying so much in taxes. 

There's certainly something to be said for smart planning. Sometimes it doesn't pay to work harder :)

For the record, I'm not saying the system is right or wrong, it is what it is. I just think that the people who play little or no taxes and yell to heap it on the rich have no clue how much they are paying and what happens if they get their wish.

Link to comment
Share on other sites

1 minute ago, ScubaCinci said:

There's certainly something to be said for smart planning. Sometimes it doesn't pay to work harder :)

For the record, I'm not saying the system is right or wrong, it is what it is. I just think that the people who play little or no taxes and yell to heap it on the rich have no clue how much they are paying and what happens if they get their wish.

That is certainly up to each.  In this case I am willing to pay a little more in taxes on a percentage basis so the wife can stay at home and us live in a cheaper house.  I will most likely up my pretax retirement contributions which will bring down the taxable amount and get it closer.  However I am fine with how much I pay in taxes.  As I mentioned above, I am nowhere near the amount of money where I would not want more even if it increased my taxes. 

Link to comment
Share on other sites

Top tax rates were significantly higher decades ago and the country was far better off as a whole.  That wasn't the only reason but it certainly contributed some.  Here is the other thing.  As wages have not increased as they did in the past the bottom tier cannot really afford to pay taxes.  If you take even 10% from a family of three making a combined $40,000 that doesn't do any of us any good.  They now have to likely make choices about food, clothing, shelter etc.  Money in the pockets of the poor and middle class drive our economy, not the top.  So we have to make a choice as to whether we want the ability to accumulate staggering amounts of wealth in the hands of a few or have the bottom and middle take home more of the pie to then purchase things, save for retirement etc and have our economy growing again.  They ARE mutually exclusive.  We have tried the staggering wealth concentration for the last few decades and look at where we are. 

Edited by MichaelS
Link to comment
Share on other sites

24 minutes ago, ScubaCinci said:

Not - because I'm legally not eligible so I couldn't if I wanted to..

You could enjoy the bounty that are the programs for the poor if you wanted to take a pay cut.  I hear it is totally worth it.

Link to comment
Share on other sites

6 minutes ago, MichaelS said:

You could enjoy the bounty that are the programs for the poor if you wanted to take a pay cut.  I hear it is totally worth it.

and conversely if the poor did something like take primary education seriously to make it to secondary education and get a better job to make a pay raise they could enjoy the bounty that is airports, roads and the TSA. I hear it is totally worth it.

Edited by Bad324
  • Upvote 2
Link to comment
Share on other sites

18 minutes ago, ScubaCinci said:

Only if I can get an Obama phone too!

Taxes and the Federal government have nothing to do with the Obama phone. But if you want to name it after a President then 'Reagan Phone' would be far more accurate.

  • Upvote 2
Link to comment
Share on other sites

34 minutes ago, Bad324 said:

and conversely if the poor did something like take primary education seriously to make it to secondary education and get a better job to make a pay raise they could enjoy the bounty that is airports, roads and the TSA. I hear it is totally worth it.

That is a whole different discussion. 

Link to comment
Share on other sites

Top tax rates were significantly higher decades ago and the country was far better off as a whole. 

Seriously? I lived through that era and remember paying 15.75% on my first car loan. If you did something more than shit your diaper back then you prolly wouldn't make that statement.

Not saying the tax code created all the evils, but the 1980 I lived through was not a place that was "better off."

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

×
×
  • Create New...