Taxing in the US

[Dinner]

Originally posted by Spiffor
One third is two thirds short of being good

Additudes like that are why France's economy is the unemployment backet case it is today.

[Imran Siddiqui]

and, after all, you're the government and you do control the army.

[Kidlicious]

Originally posted by JohnT
Cutting spending?

Not gonna happen. Anyway 90% of spending is absolutely needed.

Originally posted by JohnT
In another thread quite a while back I linked to an IRS excel spreadsheet that showed percentage of taxes paid by income bracket... and I noted that the top 50% of income earners in this country, according to the IRS itself and not some biased Left/Right site, paid 96% of the Federal Income Tax in this country and 50% of the FICA taxes, while the bottom 50% paid 4% of the income taxes and 50% of the FICA.

I have no problem with the bottom 10, or even 25% paying no federal income tax, but 50??

You could also raise corporate profit taxes by a smaller amount than the dividend tax and watch them squirm as they really can't complain all that much... and, after all, you're the government and you do control the army.

So you want to tax the middle class on their wages and salaries and cut out the dividend tax. Do you really think that's fair.

Let me use my family as an example. My family came over the Sierra Nevadas in a covered wagon and bought up a bunch of land dirt cheap. That land is now worth a lot of money. We could sell that land and buy stocks that pay dividends and assuming there were no dividend tax, not pay any tax. Maybe we would have enough money not to have to work. So you think a middle class family should pay our tax just because my great great great grandfather bought some land for dirt cheap?

[JohnT]

Since we're pulling examples out of our lives, let me give you one...

Suppose you're a 73 year old woman living on Social Security, her husbands $1,500/month pension, and $20,000 of dividends from his holdings in various stocks that they've accumulated over 50 years of marriage. Because of recent medical problems, her monthly medical bill comes to $1,834/month, or $22,000 a year. You want some family of five who makes $50,000/year require that she cover their tax burden? That's your definition of "fair"?

You think about rich people... I think about retirees. You think about money being denied the government... I think about money being denied the elderly.

The fact is that this country needs a serious adjustment to the issues of becoming an aging society, and one of the biggest problems we need to face is the problem of retirement... and our tax code is geared against the idea of "idle" income and wealth. With a long-term failure of the social security system more than probable, one of the ways that you attract Americans to save is to remove taxes on savings.

Let me make myself clear: I truly believe that there needs to be a serious reduction in capital gains and dividend taxes, not because I'm a wealthy nob but because demographic trends towards an aging society demands it. Otoh, I do agree that there should be a ceiling on dividend/capital gains income, and once that ceiling is reached then the excess should be taxed... say, the first $50,000/year is tax free while the excess is taxed at 35%+? That way, your family can pay a proper tax on their land holdings while leaving 80-90% of retirees tax free.

Oh, I know, it'll help a few rich people too, but I'm not worried about them... I'm just worried about me and where I'll be in 40 years.

[Zkribbler]

Originally posted by Imran Siddiqui
No, bad bad double taxation. It's simply unfair for one body to tax people twice on the same incomes... and unproductive.

What people?? The government taxes a corporation once on it's profits...not it's income. The government taxes the shareholders on their income.

No one seems to be able to deal with the concept that, under the law, a corporation is a separate person. Passing money to the shareholders is the functional equivalent of passing money to the employees--it's a transfer of funds and, as such, should be taxed.

Originally posted by JohnT
Your government doesn't exist to love you.

No, it obviously exists to love big corporations.

Originally posted by JohnT
I'm just worried about me and where I'll be in 40 years.

On that's an easy one. You'll be working two jobs to pay the taxes needed to pay down the deficits run up by the Republicans 40 years earlier.

[HershOstropoler]

Originally posted by JohnT
Suppose you're a 73 year old woman living on Social Security, her husbands $1,500/month pension, and $20,000 of dividends from his holdings in various stocks that they've accumulated over 50 years of marriage. Because of recent medical problems, her monthly medical bill comes to $1,834/month, or $22,000 a year. You want some family of five who makes $50,000/year require that she cover their tax burden? That's your definition of "fair"?

How would the taxation look in your example?

[HershOstropoler]

Originally posted by Zkribbler

No one seems to be able to deal with the concept that, under the law, a corporation is a separate person. Passing money to the shareholders is the functional equivalent of passing money to the employees--it's a transfer of funds and, as such, should be taxed.

You can trust me to understand the concept of legal personality. But I don't get your point. The corp pays its employees, which reduces its taxbase. If you as an individual recieve say 1000$ for a service and pay 500$ to people helping you perform that service, that reduces your taxbase (at least it does here, I'm virtually sure it does in the United States of Deductions).

So what is that income/profit point supposed to be?

[Spiffor]

Originally posted by JohnT
Suppose you're a 73 year old woman living on Social Security, her husbands $1,500/month pension, and $20,000 of dividends from his holdings in various stocks that they've accumulated over 50 years of marriage. Because of recent medical problems, her monthly medical bill comes to $1,834/month, or $22,000 a year. You want some family of five who makes $50,000/year require that she cover their tax burden? That's your definition of "fair"?

In my definition of a civilized country, her health bill would be paid by the community, and as such I don't see why the old lady shouldn't pay her taxes on her dividends.

[JohnT]

Irrelevant, because in the real (US) world, only a portion of her health care is paid for by the community. Since she doesn't live in Spifforland, comparisons to Spifforland are baseless.

[JohnT]

Herr, to figure out her tax payments you'd essentially have to fill out a 1040 with my assumptions thrown in there and see what comes out. I'd do it, but I don't have the time right now. Maybe later...

[Spiffor]

Originally posted by JohnT
Irrelevant, because in the real (US) world, only a portion of her health care is paid for by the community. Since she doesn't live in Spifforland, comparisons to Spifforland are baseless.

There is no need for Spifforland when you have civilized countries like Sweden around.

[chequita guevara]

Originally posted by Kidicious
Let me use my family as an example. My family came over the Sierra Nevadas in a covered wagon and bought up a bunch of land dirt cheap. That land is now worth a lot of money. We could sell that land

-20% for a capital gains tax.

and buy stocks that pay dividends and assuming there were no dividend tax, not pay any tax. Maybe we would have enough money not to have to work. So you think a middle class family should pay our tax just because my great great great grandfather bought some land for dirt cheap?

Well, I'm for a 100% inheritence tax (excepting personal items of sentimental value).

[HershOstropoler]

Originally posted by JohnT
Herr, to figure out her tax payments you'd essentially have to fill out a 1040 with my assumptions thrown in there and see what comes out. I'd do it, but I don't have the time right now. Maybe later...

Just very roughly.

[Kidlicious]

Originally posted by JohnT
Since we're pulling examples out of our lives, let me give you one...

Suppose you're a 73 year old woman living on Social Security, her husbands $1,500/month pension, and $20,000 of dividends from his holdings in various stocks that they've accumulated over 50 years of marriage. Because of recent medical problems, her monthly medical bill comes to $1,834/month, or $22,000 a year. You want some family of five who makes $50,000/year require that she cover their tax burden? That's your definition of "fair"?

Hmmm.. Seeing how the elderly will be getting the lion share of the transfer payments and govt services in the near future I support the dividend tax even more. Thanx JohnT. I hadn't thought of that.

[Imran Siddiqui]

What people?? The government taxes a corporation once on it's profits...not it's income. The government taxes the shareholders on their income.

The Shareholder's income, from dividends, IS the corporation's profits. That's like your employer being taxed all the money he takes in, and then the rest of the money, a part of which he gives to you, is then taxed. But we don't do that. In order to promote higher salaries, we only tax on profits. If we taxed on income, your salary would undoubtably fall.

The dividend tax simply prevents dividends from being given out. That hurts the economy because a portion of those increased number of divident payments would be spent on goods and services.