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Stop the Machine! (anyone seen this?)
Rover:
Sorry for not letting it rest.
-Shades (August 18, 2011, 10:16 AM)
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We're having a nice civil discussion. No reason to feel sorry.
Although I see your point and actually agree with practically all of it, there is something nagging.
Taken from the U.S. Census bureau:
In 2009 there were 117,181,000 households in the US. The phrase that keeps returning is: "the top 1% controls 95% of the money in the US"
So that leaves a solid 116 million households. How much Federal taxes are for each of those households I don't know, but assume that when on average each of these households pays 1000 USD/year, there would be 116,000,000,000 USD/year on tax revenue.
How can one say that the rich pay the lion share? (yes, I am fully aware that this projection of numbers is way too simple)
Then again, such numbers also mean that taxing the rich more will not make much of dent either. So government spending is the major issue.
-Shades (August 18, 2011, 10:16 AM)
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Agreed - Gov't spending is the major issue we can agree on.
I think your numbers got scrambled. According to Wikipedia (the 100% most accurate source in all the world :P ) 2007 Fed Income Tax was 1.366 Trillion and change. There were just under 139 million returns filed giving a flat average of ~$9,800 per return. We don't know if those are households or not.
If I'm reading the graph correctly and it's accurate, the top 25% of all income earners paid 85% or 1.161 Trillion of those dollars. The bottom 50% of earners paid 0.041 Trillion or 41 Billion of those dollars. Leaving the top 51-74% of income earners to pay the remaining 164 Billion dollars.
Warren and his other top 1% friends paid 505 Billion of that themselves.
Hmmm, how many secret agencies you you really need? The US military machine is also quite costly. Spent a few less percentage points (single digit!) less on these and invest that money in infrastructure (more jobs), alternative energy sources (more high-tech jobs).
Everyone is better off for it (incl. the rich, so I truly don't understand why the Tea party gets their knickers in such a twist about tax increases if the need arises).
-Shades (August 18, 2011, 10:16 AM)
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I'm not in the tea party. My understanding is they get their knickers twisted for exactly the reason agreed on above. Gov't spending needs to be brought back in-line. Until then, raising taxes is out of the question because we've had so many "fake" spending cuts in the past. e.g. We'll cut spending by eliminating the cost of the war. We have plans to be out by 2011. Then something changes and that deal of off. The spending cut isn't realized.
If the above makes me a socialist simpleton, so be it. Live and let live.
-Shades (August 18, 2011, 10:16 AM)
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I never thought that about you. Hope I didn't imply that.
I'm all for changing the tax code. They're are way too many loop holes for guys like WG Buffett. Why does he only pay 17% and I pay more.
I'm a little on the fence here.
On the one hand, companies that make lots of money also tend to create lots of jobs. Not always, but usually. Should we penalize profitable companies with more taxes? When you think about it, taxes are like insurance or rent. It costs money to keep the USA safe from bad guys, keep the roads repaired, etc. etc. Since we all benefit from National Scale perks, we should all share in the cost of those perks. But how do you fairly distribute the cost?
Flat taxes have pros and cons, so do sliding scales.
I don't know what's "fair" but I pretty darn sure all the rhetoric from some liberals about "Taxing the Rich" is a distraction and is designed to incite class envy; even more enmity.
I think we all agree things need to change.
40hz:
...but assume that when on average each of these households pays 1000 USD/year...
-Shades (August 18, 2011, 10:16 AM)
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FWIW most households in the US pay more than $1000 per year for income tax.
Tax Year:
Filing Status:
If your taxable income is between... your tax bracket is:
0 and 8499 10%
8500 and 34499 15%
34500 and 83599 25%
83600 and 174399 28%
174400 and 379149 33%
379150 and over 35%
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Most US taxpayers currently fall within the 15% and 25% tax brackets.
CORRECTION: Disregard following example and see Mouser's post immediately below.
Ignoring allowed deductions to income (which will vary from individual to individual) someone who earned $8499 would owe $850 in taxes. If they earned $1 more to make it $8500, their tax wold jump to $1275!
The rudest shock most US taxpayers ever experience is when they discover that they just barely made it into a higher tax bracket than they thought they'd be in. Usually, it was due to some windfall unexpected taxable income they made during the year. Often it's a small company bonus, a minor stock sale, or a prize of some sort that tipped the scale. When that happens, our hapless earner often finds himself scrambling to come up with several hundred additional dollars to pay off Uncle Sam by April 15th.
In the US, May 30th is referred to as Tax Freedom Day. Because that's the date by which the average wage earner has traditionally made enough to pay all of his or her tax obligations. So for five months out of the twelve, all US taxpayers are basically working for their government. They don't start working for themselves until June 1!
According to The American Spectator however, in 2011, the date is more correctly August 12th...
:'(
mouser:
If they earned $1 more to make it $8500, their tax wold jump to $1275!
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That's a *VERY* common misunderstanding of how things work in the US , but it's incorrect.
See http://money.howstuffworks.com/personal-finance/personal-income-taxes/tax-brackets1.htm
In short, only the money ABOVE the previous tax bracket gets taxed at the additional rate.
So in your example, the person making $8500 would pay:
10% in taxes on the first $8499 = $850
15% in taxes on the $1 = $0.15
Note 1: When I say it's a common misperception, I mean that it's believed by most people in the US who are in middle/lower income tax brackets. You can bet your ass that the rich people understand very well how it really works and aren't too concerned with correcting the misunderstanding.
Note 2: I have very strong feelings about these issues like many of you -- but let's remember our policy of avoiding divisive political/religious arguments on DC on the basis that there are better places to debate such things more fully.
40hz:
hat's a *VERY* common misunderstanding of how things work in the US , but it's incorrect.
-mouser (August 20, 2011, 08:30 AM)
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Mouser is correct. (Sad thing is I knew that too!) :-[
That's what I get for posting something when I've been up most of the previous night. :redface:
Original post has been annotated. Apologies to all.
Rover:
In the US, May 30th is referred to as Tax Freedom Day. Because that's the date by which the average wage earner has traditionally made enough to pay all of his or her tax obligations. So for five months out of the twelve, all US taxpayers are basically working for their government. They don't start working for themselves until June 1!
According to The American Spectator however, in 2011, the date is more correctly August 12th...
:'(
-40hz (August 20, 2011, 07:25 AM)
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It's interesting to me that we all accept May 30 or Aug 12 as Tax Freedom Day. And then we think we're paying something less than 41.6% tax. May 30 equals 41.6% of the year and typically 41.6% of the money I'll earn that year. :o
Just something to think about I guess.
@mouser: If you think this is becoming divisive we should probably lock the thread.
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