Middle Class, Rich, taxes, argument

[OrangeHeat]

So I have this running argument with my brother on taxes and have ventured off my normal path to ask for opinions here in the OT.

He believes that the rich (he defines this as +100K) should pay more taxes than they do now. Ideally he wants no one under 100K paying taxes. He is a proud member of the UAW and staunch Democrat.

I believe that there should be no reason a person making 60,000 should pay less of a percantage of their income than one making 150,000 and vice versa.

He couldn't answer this question for me :

Why should one individual who has worked 30 years and makes $150,000 pay more of a percentage of his income than another guy who has worked 30 years and is making $50,000 a year?

Can you?

I think it should be the same. Why punish the guy doing better for being successful(i.e. flat tax - no IRS - str8 X% out of payrolls)?

Thanks,

Orange

PS I am not affiliated with any party. I like Guns (Right), I like the ACLU (Left), I hate abortion (Right), I like Unions (Left), etc... Neither one fits.

[El Barto]

[ QUOTE ]
I like Guns (Right)

[/ QUOTE ]


Now I understand what "Orangeheat" stands for:


http://www.karatedepot.com/catalog/images/items/wp-tr-06.jpg

[OrangeHeat]

Lol...I should have said I like my rights to own a gun. I have a carry concealed permit but don't use it much.

I do have hunting rifles/shotguns which I used to use when I had time.

Orange

[andyfox]

A person earning less has to devote a higher percentage of his income to the basics of life. Plus he already pays a higher percentage of his income in other taxes (social security, medicaire, sales taxes, excise taxes, etc.).

On income tax, both the person making $50,000 and the person making $150,000 are paying the exact same percentage on the first $50,000 of income. The $150,000 earner is paying a higher rate on the additional $100,000 of income.

[Boris]

Rich people benefit more from our public infrastructure and laws. Therefore they should pay more. Also the marginal utility of a dollar is less for a rich person so it doesn't hurt them as much to pay taxes.

[ddollevoet]

I am also in favor of a flat tax. I really grew interested in the flat tax when Forbes was running for president. He was suggesting something like a $13,000 exemption ($26,000 if you were married) and 18% on everything over that. That way lower class pay little to no tax and everyone else pays their fair share.

Unfortunately, I doubt that this would ever be put in place. It is too logical...

[ddollevoet]

[ QUOTE ]
Rich people benefit more from our public infrastructure and laws.

[/ QUOTE ]

How is that?

[andyfox]

We already have a flat tax.

I'll let others elaborate.

[adios]

[ QUOTE ]
Why should one individual who has worked 30 years and makes $150,000 pay more of a percentage of his income than another guy who has worked 30 years and is making $50,000 a year?

Can you?

[/ QUOTE ]

To affect the distribution of income to the desired levels through transfer payments and indirectly through services.

[ QUOTE ]
I think it should be the same. Why punish the guy doing better for being successful(i.e. flat tax - no IRS - str8 X% out of payrolls)?

[/ QUOTE ]

I've decided that I will never vote for a politician who promises to raise taxes on anyone or anybody unless they indicate the desired distribution of income after the taxes are paid. Flame away but it's my vote /images/graemlins/smile.gif. BTW the distribution of income has been skewed more towards the higher income quintiles for the last 20 years or so since Reagan took office. Also GDP growth has been well, IMO, great during this time period. Raising taxes is a slippery slope. Some would have it that income be re-distributed such that everyone basically gets the same income. Yuck...

[OrangeHeat]

Yes - but why should the more successful person be charged more on the 100,000?

Orange

[OrangeHeat]

Not all "rich" people have huge tax shelters if that is what your implying.

If your talking about utility of a dollar I still ask why the successful person should pay more just because he can afford it in your eyes?


Orange

[stripsqueez]

[ QUOTE ]
I believe that there should be no reason a person making 60,000 should pay less of a percantage of their income than one making 150,000 and vice versa

[/ QUOTE ]

first against the wall come the revolution

teachers get paid crap here - i used to make almost 3 times what a good teacher makes doing a job that required 1 extra year at uni to get a degree and less effort to do

stripsqueez - chickenhawk

[OrangeHeat]

[ QUOTE ]
first against the wall come the revolution

[/ QUOTE ]

Because I believe a successful person has the same right to keep his earnings as a person with less earnings?

Orange

[stripsqueez]

[ QUOTE ]
Because I believe a successful person has the same right to keep his earnings as a person with less earnings?


[/ QUOTE ]

no - successful has little correspondence to how much money you make - in your definition successful doesnt always correspond with useful

do you think that lower income earners should pay more proportionally for the services required by us all because they are not as useful as higher income earners ?

stripsqueez - chickenhawk

[MMMMMM]

"do you think that lower income earners should pay more proportionally for the services required by us all because they are not as useful as higher income earners ?"


Yes!

When I cleaned windows for a living, I didn't charge stores and restaurants a variable amount based on their proportional ability to pay me for this necessary service. I thought they should all pay me at approximately the same rate, and that whatever they themselves earned was none of my damned business.

[Stu Pidasso]

[ QUOTE ]
Yes!

When I cleaned windows for a living, I didn't charge stores and restaurants a variable amount based on their proportional ability to pay me for this necessary service. I thought they should all pay me at approximately the same rate, and that whatever they themselves earned was none of my damned business.

[/ QUOTE ]

I don't think this a is fair comparison MMMMM. I'm sure you set your price based on whatever the market would bare. Taxes do not follow the same supply and demand model that market pricing does.

Stu

[adios]

It's also a bogus argument since many government "services" explicitly don't help the wealthy, they're directed at helping the poor and the middle class. An accounting of government services and who they help might be useful. Off the top of my head:

At the Federal level:

Defense - Helps us all equally but some might argue otherwise.

Medicare/Medicaid - The poor and middle class more than the wealthy IMO.

Social Security - The poor and middle class more than the wealthy IMO.

"Welfare" - The poor.

These are big ticket Federal spending items. Anyone can feel free to insert their own government services. I realize people contribute to social security but I'd bet a lot of money when it comes time to fix social security the odd man out will be the rich guy who's contributed but doesn't need it (means testing). I know I'm preaching to the choir, but the bottom line is that when you take a $ from someone at a higher percentage rate from someone making more income, than those making a lower incomes, IMO you're more or less giving it to those folks with lower incomes.

[Chris Alger]

You seem to be married to the assumption that fairness can only be defined as an equal percentage of income, rather than an equal sacrifice of the means for living. At the extreme, this would mean that it would be fair if some must do without food or shelter to pay taxes while others must only forgo their ninth luxury car, as long as the percentages are the same. This doesn't necessarily militate against a flat tax, only that the logic of real world fairness (degree of actual sacrifice) doesn't point to a flat tax.

The "extreme" example I used actually understates the degree of income inequality: "It has been estimated that if children's play blocks represented $1000 each, over 98 percent of us would have incomes represented by piles of blocks that went not more than a few yards off the ground, while the top one percent would stack many times higher than the Eiffel Tower." (Michael Parenti).

[OrangeHeat]

[ QUOTE ]
do you think that lower income earners should pay more proportionally for the services required by us all because they are not as useful as higher income earners ?

[/ QUOTE ]

No I think they should pay the same proportion i.e. percentage. The lower earners are the ones using most government programs.

Also I said nothing about usefullness - don't twist the question.

Orange

[OrangeHeat]

[ QUOTE ]
You seem to be married to the assumption that fairness can only be defined as an equal percentage of income, rather than an equal sacrifice of the means for living.

[/ QUOTE ]

I am not married to either. However when someone like my brother keeps claiming the rich (not me by any means) do not pay there fair share because he wants to pay less (not needs to pay less) - I want to know thje reasoning other than class envy and re-disribution of wealth.

Orange

[Rooster71]

[ QUOTE ]
Yes - but why should the more successful person be charged more on the 100,000?

Orange

[/ QUOTE ]
Because it costs money to run the government. The poor obviously can't pay much more in taxes because they don't have the money to pay. Progressive taxation has nothing to do with "punishment" as conservatives would have you believe, it is just a way to pay for operating the government.

Unless Bush is president, in which case the government just drops tax rates for the wealthy as much as possible and grows the national debt for future generations to pay.

[Rooster71]

[ QUOTE ]
"do you think that lower income earners should pay more proportionally for the services required by us all because they are not as useful as higher income earners ?"


Yes!

When I cleaned windows for a living, I didn't charge stores and restaurants a variable amount based on their proportional ability to pay me for this necessary service. I thought they should all pay me at approximately the same rate, and that whatever they themselves earned was none of my damned business.

[/ QUOTE ]
Equating business to government is ridiculous. They are not the same, they don't operate for the same reasons/goals and they don't operate in the same manner.

[Rooster71]

[ QUOTE ]
It's also a bogus argument since many government "services" explicitly don't help the wealthy, they're directed at helping the poor and the middle class. An accounting of government services and who they help might be useful. Off the top of my head:

At the Federal level:

Defense - Helps us all equally but some might argue otherwise.

Medicare/Medicaid - The poor and middle class more than the wealthy IMO.

Social Security - The poor and middle class more than the wealthy IMO.

"Welfare" - The poor.

These are big ticket Federal spending items. Anyone can feel free to insert their own government services. I realize people contribute to social security but I'd bet a lot of money when it comes time to fix social security the odd man out will be the rich guy who's contributed but doesn't need it (means testing). I know I'm preaching to the choir, but the bottom line is that when you take a $ from someone at a higher percentage rate from someone making more income, than those making a lower incomes, IMO you're more or less giving it to those folks with lower incomes.

[/ QUOTE ]
What about the huge sums of money handed out as "foreign aid?" What US citizens benefit from that?

[Wake up CALL]

[ QUOTE ]
At the extreme, this would mean that it would be fair if some must do without food or shelter to pay taxes while others must only forgo their ninth luxury car, as long as the percentages are the same.

[/ QUOTE ]

Just what is so unreasonable about that?

[Mano]

I would be in favor of a flat tax, if it was truley flat and all encompassing. The poor pay a larger percentage of their income for sales tax. The rich derive a large portion of their incomes from investing in stocks and bonds, which are taxed at the marginally lower capital gains rates. If you flatten the tax structure, you must make it so the the total tax paid is the same percentage, not just the income tax.

[Wake up CALL]

[ QUOTE ]
What about the huge sums of money handed out as "foreign aid?" What US citizens benefit from that?


[/ QUOTE ]

Ask that question to Kerry since you like him so much. He would have us at the beck and call of the UN as well as increasing foreign aid.

[Rooster71]

[ QUOTE ]
[ QUOTE ]
What about the huge sums of money handed out as "foreign aid?" What US citizens benefit from that?


[/ QUOTE ]

Ask that question to Kerry since you like him so much. He would have us at the beck and call of the UN as well as increasing foreign aid.

[/ QUOTE ]
LOL...if you can't answer the question just say so. Your remarks like the one above are almost as asinine as Bush's tax and economic policies.

[Utah]

I havent liked a single answer from anyone as they are all incomplete or they are just wrong.

There is more than just an interest in fairness here. Tax rates, tax laws, and distribution of taxes have strong effects on the productivity and wealth of the nation. Therefore, fairness is simply one element.

For example, if you tax capital gains at a higher rate and investment in the stock market goes down. If you throw in a luxury tax then sale of higher end goods goes down, productivity is lost, and jobs are destroyed.

The value of a flat tax is not in its fairness. The value is in the fact that the US economy wastes a tremendous amount of resources interpeting and applying the tax code. With a flat tax those resources could be shifted to better use.

The question of fairness is a tricky one. Although my leanings on fiscal matters are usually very conservative, I think from a "fairness" standpoint that we should tax the hell out of the rich. The reason being is that this country afforded the rich the opportunity to be rich. Its a very fair system to say - "well, if you struggle we wont tax you too much, but if you do well then we will take a much larger percentage". This is the same as contingency rent in the retail world. Who wouldnt sign up for this plan before they knew they were going to be rich? Its very easy to hate it once you are rich - but thats a different matter.

There is one huge problem though with this fairness plan - it has a damaging effect on the economy. Therefore, you have a tradeoff between economic strengh and fairness/equality.

[adios]

[ QUOTE ]
What about the huge sums of money handed out as "foreign aid?" What US citizens benefit from that?

[/ QUOTE ]

The amount of money allocated and spent for entitlements makes foreign aid a drop in the bucket.

[adios]

The government spends over $1.6 trillion on the items I mentioned as well as health care and about $25 billion on foreign aid. That's right greater than 1.6 trillion friggen dollars.

Check it for yourself.

Historical Budget Data of the U.S. Government (http://www.whitehouse.gov/omb/budget/fy2004/pdf/hist.pdf)

[MMMMMM]

[ QUOTE ]
Yes!

When I cleaned windows for a living, I didn't charge stores and restaurants a variable amount based on their proportional ability to pay me for this necessary service. I thought they should all pay me at approximately the same rate, and that whatever they themselves earned was none of my damned business.


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I don't think this a is fair comparison MMMMM. I'm sure you set your price based on whatever the market would bare. Taxes do not follow the same supply and demand model that market pricing does.

Stu

[/ QUOTE ]


I quite agree it's not a fair comparison, Stu. But, it's what I think, especially the 'damned business' part.

Keep government-provided services to a bare minimum; charge everyone based on usage regardless of what they earn; and beyond that, stay out of their damned business. That sums up my notion of good government, in a nutshell.

[Patrick del Poker Grande]

[ QUOTE ]
do you think that lower income earners should pay more proportionally for the services required by us all because they are not as useful as higher income earners ?

stripsqueez - chickenhawk

[/ QUOTE ]

They're useful, but you're forgetting the SUPPLY part of supply & demand. These people are in HUGE supply. Their wage is set accordingly.

[MMMMMM]

"Equating business to government is ridiculous. They are not the same, they don't operate for the same reasons/goals and they don't operate in the same manner."

I wasn't trying to equate them; just offering some thoughts. However I do think government should operate somewhat more like a business and less like a bureaucracy than it currently does.

[riverflush]

Ugh.....a tax thread. I could go on for hours here. But I won't.

The progressive income tax is the single most inhibiting piece of government regulation ever unleashed on the citizens of the United States. Progressively taxing productivity? Bass ackwards. I really can't believe it ever became acceptable in the U.S. - considering the reasons we became a sovereign nation in the first place. It inherently favors "old money" (like the Bushies and Kerrys) while simultaneously making it harder and harder for the middle class to climb the income hill with hopes of establishing wealth for future generations. I don't even want to get started here. It should be the #1 issue for everyone who values real freedom, yet it isn't.


I recommend to anyone and everyone: break free from your employee status, form your own LLC or S-Corp (detail cars, clean houses, paint, sell cookies, open a Subway, whatever) and buy as much of your everyday living expenses with pre-tax dollars (within the law). Spend it before it's taxed. Break even, or show a loss if you have to. Pay yourself as little salary as possible and dispense income as dividends. Buy real estate. (Pay your property taxes, tolls, and sales taxes)

That's it, I'm done...