Fair Share

[chance1]

Um, what is the point of this?

the point was to commend a fellow JUBBER for a good post

sorry

 

[chance1]

thinking i like a flat tax

why should those who make more pay more?

was thinking about this today as i rode my bike - 65-70 here in nyc today - beautiful

people making money is not the problem

and not sure incentive to make MORE should be tempered by higher marginal rates

just saying

 

[Stardreamer]

Our taxes do not do this. Using your example let's have the tax bracket begin at 30k. Your first 30k of income is taxed at 30%, every dollar you earn after that number is taxed at 50%. Your entire income is not taxed at 50% if you make $30,001, only that one additional dollar.

Exactly, if that is the way taxes are done then it is inherently fair as everyone is treated the same. I was under the impression though that we base our taxes on total income subjected to the bracket you are in, thus you aren't treating everyone the same. I would be happy to be wrong on that point.

 

[Stardreamer]

Yes. And I would suggest looking at more brackets rather than less, with the top bracket being at 70%. Pick an amount for the 70% bracket. Is $500,000 too low? Perhaps. How about $2,000,000? That may be better.

Then let's re-examine some of the deductions and exclusions. Let's prospectively eliminate Roth IRAs and prohibit further contributions to the ones already in place, for example. Let's scrap the deduction for donations to charity. Let's think about eliminating the mortgage interest deduction. These are a few ideas on reform of the personal income tax. Remember what Leona Helmsley said--"Taxes are for the little people." She was right, and that needs to be changed.

Oh, and capital gains should be taxed as ordinary income.

Corporate income tax may need more work than that. I suspect playing the system is easier there, and that needs to be stopped.

I'm not entirely sure that income is the most effective means to fairly tax folks. There is too many ways to shelter income. A consumption tax may be the more fair option.

 

[SuprSonic]

Consumption taxes are inherently regressive.

 

[SteveyBoyLA]

I think the question of the fair rate (average, marginal, or flat) is a tough one. Because the current marginal tax rate is so high on those who make a lot of $, we have constructed intricate tax code deductions and loop holes that frankly benefit the 'rich', and those companies that make a very good profit e.g., General Electric and pick your oil company. (No wonder GE has 975 people full time working on taxes and the interpretation of tax codes!)

Many of these deductions and loop holes are compliments of the many lobbyists and special interests who benefit from getting what is the equivalent of tax shelters, into the tax code.

The whole tax code is a complete load of bullshit. Frankly, I personally support a flat tax rate, regardless of income level. Get rid of all of the suites (politicians and lobbyists) in DC that make a living on constructing an arcane tax code that leaves the average 'joe' holding the bag, and unfairly taxes those who have put time and effort into earning a high wage or high income (as though this is a bad thing - it's the American dream, and ought to stay as such).

To answer your question, how about everyone pays 10% on what ever level of income they or corporatations make, and get of all tax deductions (number of kids, losses due to fire, charitable contributions, the miriad of corporate depreciation rates, etc.)

 

[Kulindahr]

What would do the BEST is to get rid of all the loopholes, and lower the rates across the board. The gov't would get a dependable ammount of cash, and I would know exactly how much I owe, without having a quarterly nightmare with the IRS.

All loopholes? Depends what you mean -- if deductions, then no; just do what one billionaire said, and eliminate all deductions taken only by those in the top two brackets.

Beyond a certain level of taxation revenues actually decrease because of evasion and people and businesses actually relocating to other jurisdictions. So, just below that level is "fair" in that it maximizes public good.

That's the pragmatic approach.

Yes. And I would suggest looking at more brackets rather than less, with the top bracket being at 70%. Pick an amount for the 70% bracket. Is $500,000 too low? Perhaps. How about $2,000,000? That may be better.

Both -- 50% at $500k... but because I like fractions, make it 2/3 at $1 mil, 3/4 at $2 mil, 4/5 at $3 mil, skip a few and go to 7/8 at $5 mil, 9/10 at $10 mil.

Then let's re-examine some of the deductions and exclusions. Let's prospectively eliminate Roth IRAs and prohibit further contributions to the ones already in place, for example. Let's scrap the deduction for donations to charity. Let's think about eliminating the mortgage interest deduction. These are a few ideas on reform of the personal income tax. Remember what Leona Helmsley said--"Taxes are for the little people." She was right, and that needs to be changed.

Eliminate IRAs and you kill the ability of a broad swath of the population to try for a better future. A good third of Americans can't save for retirement anyway; making it harder for those who barely can won't help.

If anything, that situation needs improved the other direction: all of a sudden, this year I'd get penalized if I tried saving more for retirement. Why should I be punished for wanting to save more?

Oh, and capital gains should be taxed as ordinary income.

I've been saying that for two decades. Why is it any different? Income is income.

Corporate income tax may need more work than that. I suspect playing the system is easier there, and that needs to be stopped.

Easy: corporate minimum tax.

why should those who make more pay more?

They benefited more from the system, they should pay more back.

and not sure incentive to make MORE should be tempered by higher marginal rates

just saying

It doesn't discourage the rich at all. When you have piles of money, actually having more doesn't matter; it's the numbers you see coming your way that count -- they're points in the game. The fun is seeing them generated, not accumulating them.



My take:

fair would be a tax rate where a person pays in proportion to the ratio of their income to the GDP. Your income is a bigger piece of the GDP, you pay more.

Right now, fair would be that those with the means pay at the same patriotic rate they did under Eisenhower -- with everything above 35% going not into the budget, but straight on the debt (starting with foreign debt).

 

[Kulindahr]

All loopholes, all exemptions and deductions except for those for dependents, gone, and no more recognition of marriage status.

Also, FICA taxes would no longer have a ceiling.

Keep those deductions actually used by the lowest brackets.

Except get rid of deductions for donations to religious outfits. If it doesn't have a secular function, tax deductions are a way of subsidizing churches.

 

[construct]

Eliminate IRAs and you kill the ability of a broad swath of the population to try for a better future. A good third of Americans can't save for retirement anyway; making it harder for those who barely can won't help.

I am not opposed to all IRAs. I'm only asking for the attrition of Roth IRAs--IRAs funded by post-tax dollars with no taxation of gains within the account. Traditional IRAs funded by pre-tax dollars should be left alone.

 

[Stardreamer]

I heard Arthur Laffer (the man the Laffer Curve is named for) talking on the radio this morning. He was providing a demonstration of how the rich can and will shelter income to protect it from taxing. A method is unrealized capital gains, these are gains that exist on paper (such as increases in stock values) but are not realized until the investment is actually liquidated. You can't tax it because it is not 'yet' income but potential income. So a savy investor leaves it alone but uses that potential income to obtain loans and credit from the banks. Thus they able to use that potential income indirectly.

That is why income may not be the best means to tax, net worth might be better but far to complicated to impose, you already spending an extra $.33 for every dollar of taxes on accounting and tax preparation, imagine how bad that would be if you had to calculate your net work every year?

 

[Stardreamer]

Consumption taxes are inherently regressive.

Progressive and regressive in taxes is more often a code for social manipulation and shifting the tax burden to the folks you don't like. I'd rather have a 'fair' tax system than a 'progressive' tax system. There is no perfectly fair progressive tax system, you have to addresses those inequalities when devising the tax systems. There are ways to mitigate the regressive nature of consumption taxes, sheltering necessities, rebates, etc. and still provide a fairer more efficient tax system than we have now.

 

[bankside]

This is what makes me happy to pay taxes. I can't put it any more simply:

[ame]http://www.youtube.com/watch?v=7QDv4sYwjO0&feature=player_embedded[/ame]

Taxes open up more possibilities for us than we could possibly hope to achieve in isolation.

 

[bobo425]

Guys,

I have to ask a question, because I really want to know the answer to it. I am not trying to bait anyone into an argument. I really want to know your ideas and thoughts.

I have heard a number of people say they want the rich to pay their fair share, but I have no clue to what that means. From context, I get they are saying they want the rich to pay more without providing a firm number--essentially raising the bar without telling the person how high it will go. No details are mentioned with it.

What does "fair share" mean to you? Is there a number / percentage you have in mind? Or is it a conceptual amount?

Thank you in advance.

Personally, I think this is as much a moral issue as it is a sense of what's fair or not. The gap between "rich" and "poor" is getting wider and wider with the middle class headed for extinction. Being such a great nation, we should not have the level of poverty that we do. It's not because, as Republicans suggest, that folks are simply too lazy to find a job and work and make a living, it's because there simply aren't any jobs or enough jobs. If we profess to be a nation of christians (and other charitable religions as well), then let us act as such and help those in need.

Should those making $250k or more (some much much more) get a tax credit so they pay less taxes at the same time the elderly are being forced off of their health insurance life line because the Republicans want to eliminate all entitlements that are designed to help those less fortunate.

However, in that same system, there are those who take advantage of Medicare and Social Security who really can afford to have good/excellent health coverage through their own means.

Maybe some sort of "means testing" would be appropriate.

But to answer your question, fairness is guess is like beauty --- it's in the eye of the beholder.

 

[Kulindahr]

I am not opposed to all IRAs. I'm only asking for the attrition of Roth IRAs--IRAs funded by post-tax dollars with no taxation of gains within the account. Traditional IRAs funded by pre-tax dollars should be left alone.

No savings should be taxed. If your IRA is invested in stocks or something, fine; if it's basic savings or a CD or something, no. We need a higher savings rate.

This is what makes me happy to pay taxes. I can't put it any more simply:

Taxes open up more possibilities for us than we could possibly hope to achieve in isolation.

Good points, except the moron who did it is ignorant of libertarianism.

 

[Stardreamer]

This is what makes me happy to pay taxes. I can't put it any more simply:

Taxes open up more possibilities for us than we could possibly hope to achieve in isolation.

Despite some of the overzealous statements of some of its proponents, Libertarianism is about minimum government not no government (anarchy). Government is best that is closest to the people. If a local city or community popularly decided to purchase and maintain a public beach, most Libertarians would not have a problem with that as the people using it are the people who approved it and wanted to pay for it. It is if you go to the Federal government to get money from other people who don't use it to pay for that beach that it is a problem.

 

[Kulindahr]

Despite some of the overzealous statements of some of its proponents, Libertarianism is about minimum government not no government (anarchy). Government is best that is closest to the people. If a local city or community popularly decided to purchase and maintain a public beach, most Libertarians would not have a problem with that as the people using it are the people who approved it and wanted to pay for it. It is if you go to the Federal government to get money from other people who don't use it to pay for that beach that it is a problem.

Pretty on target. If we could get "government... by the people" to stop meaning government by people so far away they haven't a clue, and aren't accountable because they're hired, not elected, most libertarians would be immensely happier.

 

[Stardreamer]

So feudalism, and even the Plantation system, work for Libertarianism.

No because those system do not represent the people. Libertarianism is also about enabling individual freedom as much as possible in a shared society. Since those system are repressive they are not in line with Libertarian ideals. Many Libertarians would say concentrating too much power in the Federal government is also repressive and little better than feudalism and plantations.

 

[bankside]

I always laugh when libertarians assert that government is "close to the people" on account of geographical proximity. What the hell has that to do with anything?

To me, government being close to the people means they anticipate my needs, and the needs of my fellow citizens, more accurately.

 

[Stardreamer]

Bullshit. Considering how much "we the people" bend over to corporate interests thanks to their "Libertarian" enablers, you are selling an idealism unshackled from reality.

You will find that most idealisms are unshackled from reality. Socialism certainly is. It doesn't mean those concepts don't have useful elements or are not desirable. Nor should you confuse Corporatism and Plutocracy with Libertarianism, they are different ideals and goals. Much of the power those 'corporate interests' have is because they can manipulate the Federal Government who has too much power.

 

[Stardreamer]

I always laugh when libertarians assert that government is "close to the people" on account of geographical proximity. What the hell has that to do with anything?

To me, government being close to the people means they anticipate my needs, and the needs of my fellow citizens, more accurately.

And who is more likely to do that and more importantly who is easier to get out of office if they don't? Your local city or state official or the President of the US?