Free Health Care For All...

[carpedm9587]

I think you're a pretty smart fella generally, but this, IMOHBAO, shows that you're letting your feelings overpower your brain - it's just dumb to think that you're actually helping people more through taxes than through direct giving, or giving through a much more efficient agency than the US government. You're probably buying way more cruise missiles and financing the "tearing children out of the arms of their parents" thing than helping people in need. Dumb.

My accountant handles my taxes, CP. My comment about paying everything I owe simply means I do not cut corners to save taxes. I use a SEP IRA and have used a Roth IRA for years to put money aside for retirement. I report all of my charitable giving (cash and materials) and miles. I'm not an idiot. I just do not do things like shelter money overseas, or lie/cheat in any way. The only taxes I "overpay" (according to my accountant) are to FICA and the Medicaid/Medicare taxes, which are targeted to those specific programs. If everyone took my view, perhaps the trust fund would not be as much in jeopardy, if at all. I also believe that "caps" on those programs are ridiculous. All it means is that the wealthiest people pay the lowest percentage into the program. If the caps were removed, the trust fund issues would resolve overnight. Yes - I would pay even more in taxes into those programs than I do now, but I would do so gladly.

The "I hate government" mantra we hear from so many on the right is, to me, ridiculous. Government is us. We live in a representative democracy. It is our neighbors who serve in political office. Some are bad apples - most are not. The people I interact with in government on a regular basis are good people usually looking to do their best. When I treat them with respect - I get respect back. Yes, there's ridiculous red tape, but no more or less than any other major institution. Anyone who has worked for a Fortune 500 company knows about bureaucratic red tape, and the government is bigger than WalMart - by a LOT. Yet it is not "too big," as far as I can tell. It is median sized, based on a comparison of the size of governments of other countries (measured per capita).

I find people hate government as soon as it does something they don't agree with, ignoring that most other Americans probably DO agree with whatever is being done. That's what happens when you live in a country the size of the U.S., with as many varying individuals: everyone has to give a little ground and tolerate things they don't like. Nobody gets to have it "all their way." But we live in a self-centered age - where many (most?) of our population wants to have it all their way and gets angry the minute they don't get it. It's an amazing (and ugly) time.

[carpedm9587]

Not sure it works like that. I have never had to calculate my tax rate in chunks like that.

Basically you put down how much you earned. They you deduct what you are allowed to or take the standard deduction. What is left is your taxable income. At that point you just look up your taxable income on a table and pay the amount listed. all as one chunk. You don't take the first 9K and take the tax for that, then the next chunk and so on.

Here is a sample tax table:

If you do the math on the table, you will find that Starlight's assessment is correct. They simply pre-calculate the amount and put the results in a table for easy look-up. They do that because the calculation becomes onerous as you get higher and higher in the tax brackets. It's another reason a flat-tax is attractive. Same deductible for everyone (the amount that person and their dependents need to be above the poverty level), then the same tax across the board for all the rest - including all forms of income. The result is a progressive tax (because of the deductible) with no loopholes. The ONLY deduction I would keep is the charitable one. Everything else would go.

[Sparko]

I was answering to your second question, not your first assertion. In other words yes, I did want to lecture you, and so I did. As far as my comment about being independently wealthy, I explained that to you long ago even though you like to pretend you never heard it. By being indepentently wealthy, I meant to say that I am retired, I no longer need to work for a living. My sister, as a single mom, getting government support for her continued education occured many decades ago. She, in large part because of that government assistance, makes a lot of money now, and pays a lot of taxes. In other words, the government got a huge return on it's investment.

Dang CP, you hit it on the head. You can't outmock the real JimL!

I think he meant he wanted to lecture, and did.

[Sparko]

You, as usual, have no idea what you are talking about. My sister did need it, desperately. She was a single mom whose husband died suddenly. She had nothing, and the government assistance was instrumental in turning her life, and the lives of her children around. I understand you don't like that idea, but at least know what you're talking about before making your argument.

Well until you just admitted you are NOT actually wealthy, I was expecting her rich brother should have taken care of her.

[Sparko]

If you do the math on the table, you will find that Starlight's assessment is correct. They simply pre-calculate the amount and put the results in a table for easy look-up. They do that because the calculation becomes onerous as you get higher and higher in the tax brackets. It's another reason a flat-tax is attractive. Same deductible for everyone (the amount that person and their dependents need to be above the poverty level), then the same tax across the board for all the rest - including all forms of income. The result is a progressive tax (because of the deductible) with no loopholes. The ONLY deduction I would keep is the charitable one. Everything else would go.

Okay - I will take your and Starlight's word on it. It doesn't really affect my initial argument to Leon, just lowers the effective tax rate a bit.

[Starlight]

If you do the math on the table, you will find that Starlight's assessment is correct. They simply pre-calculate the amount and put the results in a table for easy look-up. They do that because the calculation becomes onerous as you get higher and higher in the tax brackets.

Yep.

It's another reason a flat-tax is attractive.

Or you could just have a computer do the tax calculation and be doing absolutely zero of this by hand. Why Americans have such a complex, hand-filled out tax system is a mystery to the rest of the world. Most people here don't do tax returns ever - their income/payroll taxes are deducted automatically from their paychecks and so they have no need to file any tax return with the government. I do file a yearly tax return myself because I have some overseas income that is taxed already in another country, so once a year I fill out a computerized form here noting how much was taxed already and it takes about half an hour or less.

Same deductible for everyone (the amount that person and their dependents need to be above the poverty level), then the same tax across the board for all the rest - including all forms of income. The result is a progressive tax (because of the deductible) with no loopholes.

I am deeply skeptical that your proposed system would be sufficiently progressive. It's basically a two-bracket system where the bottom bracket is 0%.

The ONLY deduction I would keep is the charitable one. Everything else would go.

Why keep the charitable deduction? It just creates bureaucracy and paperwork and takes time and effort to find receipts for all donations and write them all down etc. Far, far easier to have zero deductions. Then amount of total income gets entered into the computer, taxes number comes out, and you're done.

[Sparko]

Yep.

Or you could just have a computer do the tax calculation and be doing absolutely zero of this by hand. Why Americans have such a complex, hand-filled out tax system is a mystery to the rest of the world. Most people here don't do tax returns ever - their income/payroll taxes are deducted automatically from their paychecks and so they have no need to file any tax return with the government. I do file a yearly tax return myself because I have some overseas income that is taxed already in another country, so once a year I fill out a computerized form here noting how much was taxed already and it takes about half an hour or less.

I am deeply skeptical that your proposed system would be sufficiently progressive. It's basically a two-bracket system where the bottom bracket is 0%.

Why keep the charitable deduction? It just creates bureaucracy and paperwork and takes time and effort to find receipts for all donations and write them all down etc. Far, far easier to have zero deductions. Then amount of total income gets entered into the computer, taxes number comes out, and you're done.

Pretty sure under the Starlight government, the Government would just take it all and give you back a small allowance based on your "need"

[carpedm9587]

Yep.

Or you could just have a computer do the tax calculation and be doing absolutely zero of this by hand. Why Americans have such a complex, hand-filled out tax system is a mystery to the rest of the world. Most people here don't do tax returns ever - their income/payroll taxes are deducted automatically from their paychecks and so they have no need to file any tax return with the government. I do file a yearly tax return myself because I have some overseas income that is taxed already in another country, so once a year I fill out a computerized form here noting how much was taxed already and it takes about half an hour or less.

Electronic tax systems are common here too.

I am deeply skeptical that your proposed system would be sufficiently progressive. It's basically a two-bracket system where the bottom bracket is 0%.

Yes, it is. And if the bottom bracket is set to ensure a tax-free subsistence-level income for all, it then creates a level playing field for all. Everyone gets that first $30-40K (I don't know what the actual numbers would have to be) tax-free, and then everyone is taxed on the "excess" at the same level. Ideally, that level should be set to align with government spending annually. So if it is 30%, you get the following (assuming a standard deduction of $30K:

$30K - 0%
$40K - 7.5%
$50K - 12%
$60K - 15%
$70K - 17.1%
$80K - 18.75%
$90K - 20%
$100K - 21%
$1M - 29.1%

The rate of climb slows and approaches 30% as a limit. By the time you're at $2M, it's pretty much 30%

Why keep the charitable deduction? It just creates bureaucracy and paperwork and takes time and effort to find receipts for all donations and write them all down etc. Far, far easier to have zero deductions. Then amount of total income gets entered into the computer, taxes number comes out, and you're done.

My thought is to stimulate donations to charities. If you think about it, this a mechanism by which people can take tax dollars they otherwise would have given to the government, and direct them to a charity of their choice as a "matching" contribution. But I have to admit that I do not know the relationship between charitable giving and the tax deduction. If it is negligible (i.e., most people's charitable giving is not impacted by the deduction), then I agree it should go.

[carpedm9587]

Okay - I will take your and Starlight's word on it. It doesn't really affect my initial argument to Leon, just lowers the effective tax rate a bit.

When you add in the significantly lower tax on capital gains (which is a huge percentage of where the wealthy get their income), and the exclusions available to businesses through a variety of tax techniques, the true tax rate (not the effective rate) for the wealthiest is pretty low. I am not surprised by Buffett's claim, and suspect a LOT of wealthy people are paying similar (or lower) numbers. I'd love to have a chance to run the numbers by comparing the net income of the top 20% against the total tax paid by the top 20%, but finding those numbers is hard.

[Leonhard]

I am talking about the tax rate for income tax. yeah there are ways to lower the actual amount paid.

Alright... and a company tax of 20% is very similar to what we have in Denmark. Now you stated 39% tax on the money they make, but that's for income... what's the capital gain tax?

More power to them. I do it too. As do you.

Yeah no, if rich people are cheating the tax system then it basically means that its the lower and middle class that are paying for the party. That should be rectified.

[Sparko]

Alright... and a company tax of 20% is very similar to what we have in Denmark. Now you stated 39% tax on the money they make, but that's for income... what's the capital gain tax?



Yeah no, if rich people are cheating the tax system then it basically means that its the lower and middle class that are paying for the party. That should be rectified.

Using the legal methods of reducing your tax burden is not cheating. It is how the system is made.


The poor don't pay the taxes they should either. They usually get money back that they didn't even pay in. A negative income tax if you will.


From a liberal site: NBC...

The rich do not pay the most taxes, they pay ALL the taxes

Buried inside a Congressional Budget Office report this week was this nugget: when it comes to individual income taxes, the top 40 percent of wage earners in America pay 106 percent of the taxes. The bottom 40 percent...pay negative 9 percent.

You read that right. One group is paying more than 100 percent of individual income taxes, the other is paying less than zero.

It's right there in Table 3 on page 13 of the report. The numbers are based on 2010 IRS and Census Bureau figures.
...
However, the greatest disparity in the report is the one mentioned above, regarding the share of individual income taxes paid by various income groups.

First, let's look at incomes. The report shows the lowest-paid Americans earned on average $8,100 in 2010 but received nearly $25,000 in government aid. You begin to see how "transfers" create a negative tax burden.

But wait, there more. The CBO says about a quarter of the lowest earning group actually paid negative 15 percent of all individual income taxes. Contrast that with the combined share of the wealthiest two groups, which totals more than 100 percent.

Fair or not, I will let you be the judge.

People who make more should pay more, generally speaking. In America, they are. Yes, the rich (and almost rich) are getting richer. When it comes to individual income taxes, they're also covering the entire bill. And leaving a tip.
https://www.cnbc.com/2013/12/11/the-...the-taxes.html

[Cow Poke]

My accountant handles my taxes, CP. My comment about paying everything I owe simply means I do not cut corners to save taxes.

Neither do I, but I'm not dumb enough to pay more than I owe.

[Cow Poke]

The "I hate government" mantra we hear from so many on the right is, to me, ridiculous. Government is us.

And you haven't heard even an INKLING of that from me.

[carpedm9587]

Alright... and a company tax of 20% is very similar to what we have in Denmark. Now you stated 39% tax on the money they make, but that's for income... what's the capital gain tax?

I believe it's still 15% for all but the lowest two tax brackets (it is zero for them). I think Sparko is confusing the "effective rate" (which is achieved by doing simple division on the tax table - the tax divided by the income) with the "actual rate" which is the rate the rich are actually paying on their income after all the deductions, loopholes, and everything is is figured in. Because the rich have such a high percentage of their income from capital gains on investments, they pay 15% for a huge block of their income. Then they pay the effective rate on the rest of their income, minus deductions. That's how Buffett got to 17.1%

Yeah no, if rich people are cheating the tax system then it basically means that its the lower and middle class that are paying for the party. That should be rectified.

Well...maybe we need to be a little tighter with the language here. The top 20% are paying over 70% of the taxes, so it would be hard to say that the lower classes are "paying for the party." But it would be accurate to say that they are paying a disproportionate amount for the party. We have to remember that 97.3% of income taxes are paid by the top 50% of earners. The bottom 50% pay the remaining 2.7% (2014 figures). In 2014, the median income was $56.5K Assuming they are using "median" correctly, that means people making $0-56.5K paid 2.7% of the taxes and people making above $56.5K paid the remaining 97.3%. So the disproportion is largely for the so-called "middle class." Pew Research cites $42K-$125K as the "middle class income range" for the U.S., and that pretty much fits with those numbers. I'll bet most of the 2.7% is coming for the $42-56.5K bracket.

[carpedm9587]

Neither do I, but I'm not dumb enough to pay more than I owe.

It's a matter of personal values. I won't pay more than I owe into the general fund. I will do so for SocSec, Medicare, and Medicaid. If that is "dumb" to you, then your values are apparently not the same as mine.