Tax bills in 2009 at lowest level since 1950

[SC Devs Fan]

I have zero disdain for wealthy people (or any people for that matter), I have no idea how you drew that conclusion.

By reading 100's of your posts. Its not hard to see.

[Devils Dose]

Didn't the Arizona voters just approve higher taxes on themselves?

[squishyx]

By reading 100's of your posts. Its not hard to see.

Oh, surely then you will have no problem citing an example cites where I have shown contempt for rich people.

[thegame346]

I think we can all agree on something about this whole situation.

I don't lament, or have disdain for rich people. Making a successful life for yourself is the cornerstone in which we fight for a free America everyday. What I, and I am sure a lot of people in this thread, and for that matter country have a problem with is rich people who stay rich by consistently exploiting, lieing to, and taking advantage of others whether they be rich, middle classed, or poor.

The problem that exists is a large portion of the weathiest people in our country fit that exact description. The recent economic crisis has exacerbated the lament those much poorer then them have towards the rich. When we see news reports that the people who started this whole thing in the first place had been prior to it receiving millions of dollars in bonuses, coupled with the fact that no one other than Madoff (which TBPH isn't even related really to the economic crisis) has been given jailtime for ANY of this it creates a Rich vs Poor mentality.

I don't know what the absolute correct answer is but I do know this... the poor are not responsible for this mess. sh!t has rolled downhill and unfortunately a lot of people have lost homes, and families have been destroyed because of the greedy nature of the rich prick, slimy, greeseball bastards in the banking industry. So for ANYONE to sit here and whine about 50% of the nations population not paying taxes is bullsh!t. You don't compound the economic problems the average joe is having right now by giving them a bill come April 15th when they have already lost thier jobs, thier house, and thier peace of mind.

[SC Devs Fan]

I don't disagree with that, many people have become wealthy on the back of the less fortunate. To generalize that the rich got rich via some kind of 'scam' or the poor were taken advantage of solely because they are poor are incorrect; obviously some of the wealthy worked hard for their money, worked hard, took chances and received the rewards instead of stealing the money and some of the poor got taken advantagfe of them, some are 'victims' of an entitlement culture which supports those who choose not to work or be productive members of society. The problem I have with things is expanding the entitlement programs for people who aren't even making an effort; I have no problem helping put people back on their feet, I have a problem supporting those who want to lie on their back. For years. And I believe being rich shouldn't afford you the option to skirt the law, all the corporate asswipes that stole from us on wall street should do more then pay a fine.

[thegame346]

I don't disagree with that, many people have become wealthy on the back of the less fortunate. To generalize that the rich got rich via some kind of 'scam' or the poor were taken advantage of solely because they are poor are incorrect; obviously some of the wealthy worked hard for their money, worked hard, took chances and received the rewards instead of stealing the money and some of the poor got taken advantagfe of them, some are 'victims' of an entitlement culture which supports those who choose not to work or be productive members of society. The problem I have with things is expanding the entitlement programs for people who aren't even making an effort; I have no problem helping put people back on their feet, I have a problem supporting those who want to lie on their back. For years. And I believe being rich shouldn't afford you the option to skirt the law, all the corporate asswipes that stole from us on wall street should do more then pay a fine.

I'm definitely not saying that rich people automatically become slimeballs once they reach that tax bracket. What I am saying is that unfortunately a few rotten apples have spoiled the bunch, and rather then get taken advantage of AGAIN those who have been hit hardest by this economic crisis are doing just that... generalizing all the rich until they know who they can trust, and who they can't. The line is so gray right now. Banks, and people who work in banks they have known for YEARS all of the sudden are turning them down for things like car loans, small business loans, etc. Its really hostile out there right now and to be honest I can't blame them. Imagine being in a hospital bed near death and someone in perfect health comes in and starts pinching off your IV?

On your point of freeloaders look... freeloaders exist in every economy. No matter how tight you make your laws someone will always be able to ake advantage of them and get something for nothing. Thats just the way things are. I don't like it anymore then you do but it is what it is.

Edited May 21, 2010 by thegame346

[SC Devs Fan]

Again, I don't disagree, but lets' not just blame the banks in this. Far too many people have been living a higher standard of living then they should have, and just because banks were giving money away doesn't mean you had to take it. I feel sorry for those who lost jobs, houses, etc. but I have no sympathy for someone who makes $50K a year and feels they need a 400K house, two new cars and vacations each year. Banks, no doubt, took advantage of people but they didn't hold a gun to anyone's head and force them to take the money; both parties were n the wrong here. Again, I'm not talking about the guy laid off who is losing his house; I'm talking about the ones who shouldn't have been living there in the first place.

[thegame346]

Again, I don't disagree, but lets' not just blame the banks in this. Far too many people have been living a higher standard of living then they should have, and just because banks were giving money away doesn't mean you had to take it. I feel sorry for those who lost jobs, houses, etc. but I have no sympathy for someone who makes $50K a year and feels they need a 400K house, two new cars and vacations each year. Banks, no doubt, took advantage of people but they didn't hold a gun to anyone's head and force them to take the money; both parties were n the wrong here. Again, I'm not talking about the guy laid off who is losing his house; I'm talking about the ones who shouldn't have been living there in the first place.

Now I have to disagree. The bank is the overall responsible party in this instance. They have the responsibility of declining loans based on the very scenario's you just laid out. They are charged with that responibility to PREVENT what is currently happening. I do agree that the loanee does bear some responsibility but come on. If I have to lay down a percentage of wrong here the bank is 75-80% wrong in this instance. The bank has the final say so in all transactions. They are done with other peoples money not thier own.

[SC Devs Fan]

Now I have to disagree. The bank is the overall responsible party in this instance. They have the responsibility of declining loans based on the very scenario's you just laid out. They are charged with that responibility to PREVENT what is currently happening. I do agree that the loanee does bear some responsibility but come on. If I have to lay down a percentage of wrong here the bank is 75-80% wrong in this instance. The bank has the final say so in all transactions. They are done with other peoples money not thier own.

I'm not saying the banks aren't at fault and I'm not saying what they did didn't border on being criminal. There is plenty of blame to go around; the banks, the people who took the money but more importantly the people who were supposed to be overseeing the banks who turned their heads. Everyone got caught up in the greed but you cannot discount too many Americans got just as caught up in it.

[thegame346]

I'm not saying the banks aren't at fault and I'm not saying what they did didn't border on being criminal. There is plenty of blame to go around; the banks, the people who took the money but more importantly the people who were supposed to be overseeing the banks who turned their heads. Everyone got caught up in the greed but you cannot discount too many Americans got just as caught up in it.

Yeah true. It's a terrible mess. It is times like these I am glad I have never gotten caught up in the buy now pay later credit craze. If I didn't have the money I didn't buy it. I have one loan out right now and thats for our new van. I hate taking things out on credit. I'd much rather pay cash for things.

[Daniel]

The basic question that everyone avoids is this, what's the most any American, no matter how much money they make, should pay in income taxes.

Right now, it's something like 35%, and that's just federal taxes. At some point, you're arguing for confiscatory tax rates, at which time you might as well call yourself a Socialist.

The way I see it, no matter how much we want to pay teachers, no matter how much we want public funds spent on healthcare, or how much we want a kick-a$$ military, we have to first decide what's the most anyone should pay in taxes. (The only exception would be in the case of a national emergency that requires full scale mobilization, like WWII).

In any event, the left-wing mind set that the government can afford to spend as much money as it wants by squeezing more taxes out of a bunch of fat cats has been proven wrong time and again. Just look at NJ, drowning in debt, yet the highest tax rates in the country. (And I can guarantee you that the millionaire tax that Christie vetoed would not make any difference, and in fact would be more likely to be counterproductive.) Look at Texas, no state income tax, but pretty stable public finances.

[squishyx]

The basic question that everyone avoids is this, what's the most any American, no matter how much money they make, should pay in income taxes.

Right now, it's something like 35%, and that's just federal taxes. At some point, you're arguing for confiscatory tax rates, at which time you might as well call yourself a Socialist.

The way I see it, no matter how much we want to pay teachers, no matter how much we want public funds spent on healthcare, or how much we want a kick-a$$ military, we have to first decide what's the most anyone should pay in taxes. (The only exception would be in the case of a national emergency that requires full scale mobilization, like WWII).

In any event, the left-wing mind set that the government can afford to spend as much money as it wants by squeezing more taxes out of a bunch of fat cats has been proven wrong time and again. Just look at NJ, drowning in debt, yet the highest tax rates in the country. (And I can guarantee you that the millionaire tax that Christie vetoed would not make any difference, and in fact would be more likely to be counterproductive.) Look at Texas, no state income tax, but pretty stable public finances.

According to the 2007 tax income returns Americans made $8 trillion collectively and were taxed a total of 1.1 Trillion.

In federal income taxes people payed under 14%.

Edit: About to head down to Jersey but since I sense this counter point is coming... SS is 6% and Medicare is 1.5%. The overall Federal tax rate for the average American is about 20% (actually less since those making over 100k don't pay SS driving that average down). If you were self employed you would be paying something closer to 25% total. Still pretty short of the 35% mark though.

Edited May 21, 2010 by squishyx

[Devils731]

He was talking about the top tax rate, you can tell by the part beforehand where he talks about what is the most someone should be taxed.

[Daniel]

According to the 2007 tax income returns Americans made $8 trillion collectively and were taxed a total of 1.1 Trillion.

In federal income taxes people payed under 14%.

Edit: About to head down to Jersey but since I sense this counter point is coming... SS is 6% and Medicare is 1.5%. The overall Federal tax rate for the average American is about 20% (actually less since those making over 100k don't pay SS driving that average down). If you were self employed you would be paying something closer to 25% total. Still pretty short of the 35% mark though.

see Devils731. 35% figure was referring to top federal income tax bracket, not the average tax payer. Which follows my overall point that while everyone talks about taxing the fatcats, they never tell you how the sausage is made, i.e. how much the fatcats are really being taxed, and perhaps it would be counterproductive if that income tax rate went up significantly higher.

[thegame346]

see Devils731. 35% figure was referring to top federal income tax bracket, not the average tax payer. Which follows my overall point that while everyone talks about taxing the fatcats, they never tell you how the sausage is made, i.e. how much the fatcats are really being taxed, and perhaps it would be counterproductive if that income tax rate went up significantly higher.

Does it really matter? Most of those taxes are pushed to the consumer anyway. So they are paying taxes either directly or indirectly.

[Daniel]

Now I have to disagree. The bank is the overall responsible party in this instance. They have the responsibility of declining loans based on the very scenario's you just laid out. They are charged with that responibility to PREVENT what is currently happening. I do agree that the loanee does bear some responsibility but come on. If I have to lay down a percentage of wrong here the bank is 75-80% wrong in this instance. The bank has the final say so in all transactions. They are done with other peoples money not thier own.

To quote Mick Jagger: "Who killed the Kennedys? Well after all, it was you and me".

Politicians (or more specifically their constituents) demanded that people get easy credit. The banks obliged, which was made easier by the fact that the people running them had no stake in the outcome if things went bad (i.e. they all got their nice bonus packages) and that the government would guarantee mortgages given to anyone no matter how much of a credit risk it was.

It was fun while it lasted, but now people have to live with the pain (which includes you NJEA), lest we dig ourselves into a bigger hole and merely push back the day of reckoning.

Austerity isn't pretty, but sooner or later there isn't an alternative.

Does it really matter? Most of those taxes are pushed to the consumer anyway. So they are paying taxes either directly or indirectly.

Corporate tax is for the most part, but personal income tax generally isn't. That is, if the top marginal income tax rate went down, and the CEO was taking home more of his pay, I don't think the prices that his company charges would go down all that much if at all.

Edited May 21, 2010 by Daniel

[Devils731]

Some tax tidbits, but these come from a paper back in 2008 by Harris Sherline, CPA and former partner in a public accounting firm.

In 2005 we spent 6.4 billion hours working on federal tax compliance. That works out to about $265 Billion Dollars a year of work, or about 3 million people working full time all year to do it. At the time that was an additional 22% to the cost of the taxes collected. (My note: That additional cost isn't really accounted for but it should be since that labor could be spent during other productive work instead)

In 1993 the General Accounting Office audited the IRS for the first time and found major problems, perhaps the biggest being that the agency couldn't account for 64% of it's congressional appropriation.(my note: The Pension Guaranty Fund, I believe, recently failed a GAO audit as well.)

In 2004 the Households with the lowest 20% of income received about $8.21 for every dollar of total taxes collected while the top 20% received $0.41 for every total dollar collected.

The AMT, which everyone agrees is a problem but nobody is really fixing, was created in 1969 to specifically target 21 millionaires who didn't pay taxes. I believe Congress keeps passing 1 year fixes for it or it would hit around 20 million people now. 3 million or so got hit by AMT in 2006.

-------------------------------------

Not totally on the original topic but it handed already meandered so I thought this fit alright and was a little interesting.

Edited May 21, 2010 by Devils731

[squishyx]

see Devils731. 35% figure was referring to top federal income tax bracket, not the average tax payer. Which follows my overall point that while everyone talks about taxing the fatcats, they never tell you how the sausage is made, i.e. how much the fatcats are really being taxed, and perhaps it would be counterproductive if that income tax rate went up significantly higher.

Ok fair enough, but I don't understand why "this" is the question that everyone avoids and is the most important. To me it seems more important at which income level that bracket starts to kick in, not how much. If we made a trillionaires tax bracket at 90% it wouldn't mean much. The highest bracket was between 70% and 90% for much of the last century, were we essentially "socialist" then?

[Devils731]

Ok fair enough, but I don't understand why "this" is the question that everyone avoids and is the most important. To me it seems more important at which income level that bracket starts to kick in, not how much. If we made a trillionaires tax bracket at 90% it wouldn't mean much. The highest bracket was between 70% and 90% for much of the last century, were we essentially "socialist" then?

And for most of our countries history there was no income tax? So what does that have to do with now? I would say both really have nothing to do with the now, except that we've seen reduction in tax rates have still be yielding increases in revenue, which suggest we're still not at the most efficient rate structure, if efficiency of long term revenues is the goal.

Where and when tax rates kick in are probably equally important, IMO.

[squishyx]

And for most of our countries history there was no income tax?

True, but only for about 30 more years.

So what does that have to do with now? I would say both really have nothing to do with the now, except that we've seen reduction in tax rates have still be yielding increases in revenue, which suggest we're still not at the most efficient rate structure, if efficiency of long term revenues is the goal.

Where and when tax rates kick in are probably equally important, IMO.

His earlier post indicated that having the highest bracket at 35% was somewhat close to his "socialist" threshold, so I am curious as to what he thinks of the country for a 50 or so year span when top rates were doubled or almost tripled.

I'm still not understanding why he thinks the top tax bracket is the most important and is some taboo topic that we refuse to discuss, which, btw is entirely untrue. We've (the forum) talked about the top bracket many times.

[Daniel]

If we made a trillionaires tax bracket at 90% it wouldn't mean much. The highest bracket was between 70% and 90% for much of the last century, were we essentially "socialist" then?

In some sense yes, in some sense no. Yes, in the sense that the high marginal income rates were the product of the two world wars, which, as I mentioned, required full-scale government coordinated mobilization. That is socialism in a very real sense, albeit for different ends than in peace time. High marginal tax rates after the wars was probably a mixture of need to pay down the debt from the wars, especially WWII, which was enormous, and inertia.

I would say it wasn't socialism in the sense that the high marginal income tax rate back then, as I understand it, was avoidable, at least by a lot of the people it was intended for, albeit through relatively high transaction costs. So if you owned a business, you could structure in a way that the top marginal tax rate didn't apply at the end of the day. For others, I would imagine it was more difficult, CEOs of publicly held companies, and professionals such as doctors and lawyers.

But again, whatever the tax rate was or was not at some time in the past, the basic question, that again, rarely gets answered, is what is the highest percentage of one's income the government should be entitled to?

[Daniel]

I'm still not understanding why he thinks the top tax bracket is the most important and is some taboo topic that we refuse to discuss, which, btw is entirely untrue. We've (the forum) talked about the top bracket many times.

I can't speak for past discussions here (I'm kind of new here), but to the extent I follow the political zeitgeist in general, I rarely see actually percentages ever discussed, only campaign ads about "tax cuts for the rich", and so forth.

[squishyx]

But again, whatever the tax rate was or was not at some time in the past, the basic question, that again, rarely gets answered, is what is the highest percentage of one's income the government should be entitled to?

I still don't get the importance of this question. Shouldn't we be looking at taxes as a whole? IE we spend X and tax Y, borrow Z. You keep saying that looking at a portion of Y is the big question here, but I just don't see why.

[Devils731]

I still don't get the importance of this question. Shouldn't we be looking at taxes as a whole? IE we spend X and tax Y, borrow Z. You keep saying that looking at a portion of Y is the big question here, but I just don't see why.

Maybe it depends on who you believe holds the original right to property, gov't or the individual. So you're thinking spend x, tax y, borrow z while someone believing the individual comes first would believe it reads more like gov't takes x, spends y, borrow z.

It's only a slight change, the math equation works the same either way, but it's a philosophical difference where spending begets comparable taxing or a certain amount of taxing limits spending.

Edited May 24, 2010 by Devils731

[Daniel]

I still don't get the importance of this question. Shouldn't we be looking at taxes as a whole? IE we spend X and tax Y, borrow Z. You keep saying that looking at a portion of Y is the big question here, but I just don't see why.

It's the most important question because, at least in my book, no matter how rich you are, you have a god given right to what's yours. When the most important part of the calculus becomes how can we squeeze as much money out of anyone to transfer to someone else, you are saying that everything one earns presumptively belongs to the government, which is a very dangerous path to go down.

I get it, taxes are necessary. And I also get that mildly progressive income tax is generally a fair, if highly inefficient, means of doling out the tax bill. But if the government can't pay for the goodies it wants to dole out without taking more than half of what ANYONE earns, then it should put it back on the shelf.