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Thread: 47% will pay no federal income tax

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    47% will pay no federal income tax

    Roughly 47 percent of households, or 71 million, will not owe any federal income tax for 2009

    Okay. I'm all for a progressive tax system. But how can it possibly be good for the country when so many voters don't have to pony up any skin in the game? The problem we have with our government is that people vote for politicians who promise to give them things for free. And those that have the guts to try to take stuff away from people immediately get voted out of office. I understand that some people in this country simply can't afford any taxes. But half of the population? No wonder we get the government we get. We get what we pay for, which for almost half of the population is nothing.

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    Re: 47% will pay no federal income tax

    You do realize that income tax alone does not represent all federal taxes no?

    http://www.cbo.gov/publications/coll...ity_shares.xls
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    Re: 47% will pay no federal income tax

    Quote Originally Posted by Cremaster77 View Post
    Roughly 47 percent of households, or 71 million, will not owe any federal income tax for 2009

    Okay. I'm all for a progressive tax system. But how can it possibly be good for the country when so many voters don't have to pony up any skin in the game? The problem we have with our government is that people vote for politicians who promise to give them things for free. And those that have the guts to try to take stuff away from people immediately get voted out of office. I understand that some people in this country simply can't afford any taxes. But half of the population? No wonder we get the government we get. We get what we pay for, which for almost half of the population is nothing.
    Has nothing to do with a progressive tax system. It has everything to do with a broken tax system.

    For example, in my home country, everyone pays taxes regardless of how you get your income. So that means the unemployed pay a certain amount in tax of their unemployment insurance and so on. It might not be much, but the principle of everyone contributing to society regardless of income is a good one.
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    Re: 47% will pay no federal income tax

    Quote Originally Posted by PeteEU View Post
    Has nothing to do with a progressive tax system. It has everything to do with a broken tax system.

    For example, in my home country, everyone pays taxes regardless of how you get your income. So that means the unemployed pay a certain amount in tax of their unemployment insurance and so on. It might not be much, but the principle of everyone contributing to society regardless of income is a good one.
    Every legal worker in the US pays unemployment insurance. It's a separate deal.

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    Re: 47% will pay no federal income tax

    Quote Originally Posted by obvious Child View Post
    You do realize that income tax alone does not represent all federal taxes no?

    http://www.cbo.gov/publications/coll...ity_shares.xls
    There's 3 other things classified as federal taxes. Social Security, Corporate, and Excise taxes. I personally don't consider SS tax as a tax per say, because it's basically a retirement fund that all workers who contribute to it are eventually eligible to receive. Excise taxes are taxes on certain goods, such as cigarettes and liquor.

    Income tax and Corporate tax are the only two that are based on the amount of money you make, and of course very few if any of the bottom 50% of income earners pay Corporate taxes.

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    Re: 47% will pay no federal income tax

    Quote Originally Posted by Grim17 View Post
    Every legal worker in the US pays unemployment insurance. It's a separate deal.

    .
    not what I meant.

    Every PERSON who has any form of income, may it be pension, unemployment payments, student payments or normal wages, pays a percentage in tax. This means if you get unemployment payment from the state, then you pay taxes of that payment, just as if you would if you got a real wage from a company. The only difference is often the % paid and other legal technicalities.
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    Re: 47% will pay no federal income tax

    Quote Originally Posted by obvious Child View Post
    You do realize that income tax alone does not represent all federal taxes no?

    http://www.cbo.gov/publications/coll...ity_shares.xls
    But if we pretend that SS/Medicare are their own things which are separate from general revenues (humor me), then we shouldn't really be considering those payments in looking at tax burden. Even if you don't want to separate those out, another way of looking at what is being linked in the OP is that 47% of the country is not paying any money toward anything other than Medicare/SS. The 53% that is paying taxes is responsible for all other spending as well as their own share of Medicare/SS.

    Quote Originally Posted by PeteEU View Post
    not what I meant.

    Every PERSON who has any form of income, may it be pension, unemployment payments, student payments or normal wages, pays a percentage in tax. This means if you get unemployment payment from the state, then you pay taxes of that payment, just as if you would if you got a real wage from a company. The only difference is often the % paid and other legal technicalities.
    This seems sort of counterproductive to me. Someone in the US earning $10k a year and supporting a family of four is eligible for plenty of programs that will result in him receiving several thousands of dollars of federal and state money in order to help his family. I assume it's the same in your country. In terms of efficiency, why would we want to tax his income at all, if we're just going to be giving him the money back in another way? Adding the tax will only create an additional incentive for him to work off the books, which is what already happens here. It's amazing how often people (especially poor people) work off the books so as to avoid paying SS/Medicare taxes. I think it would be best if we eliminated all up-front taxes for those who made less than $20k or so.
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    Re: 47% will pay no federal income tax

    Quote Originally Posted by Grim17 View Post
    There's 3 other things classified as federal taxes. Social Security, Corporate, and Excise taxes. I personally don't consider SS tax as a tax per say, because it's basically a retirement fund that all workers who contribute to it are eventually eligible to receive. Excise taxes are taxes on certain goods, such as cigarettes and liquor.

    Income tax and Corporate tax are the only two that are based on the amount of money you make, and of course very few if any of the bottom 50% of income earners pay Corporate taxes.

    .
    SS/medicaid taxes go into the general fund and are spent. There is no lock-box. The percentage-return on SS "investment" is pathetic, and it will likely not exist (or be much curtailed) by the time I am 65.

    I'd opt out if I could. Since I can't, it is a TAX.

    As I understand it, everything I buy has "value added" or corporate taxes that contribute to the final price, anywhere from 10% to 50% of what I pay is ultimately because of taxes on business and regulatory compliance costs.

    Not to mention the ways in which gov't taxation affects the economy and the business I work for.

    Almost everyone pays taxes, some are just more obvious and direct than others.

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    Re: 47% will pay no federal income tax

    Quote Originally Posted by Grim17 View Post
    ...of course very few if any of the bottom 50% of income earners pay Corporate taxes.
    What's even worse is that most corporations don't pay corporate taxes:

    "93.9 percent of U.S.-controlled companies pay less than 5 percent of its income in taxes; 63 percent pay no tax at all."

    Do corporations pay too little in taxes? - Atlanta Business Chronicle:

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    Re: 47% will pay no federal income tax

    Quote Originally Posted by RightinNYC View Post
    This seems sort of counterproductive to me.
    It is hardly counter productive.

    For one everyone has a stake in society by paying taxes, whatever the size they pay. If you have large portions of the populace avoiding paying any income taxes then you will create a two tier society causing all sorts of perception problems. Those not paying taxes will think it is better not to earn more since that would mean they had to pay taxes and those earning enough to pay taxes will be pissed at the latter because they are avoiding taxes. No one likes tax dodgers.

    Someone in the US earning $10k a year and supporting a family of four is eligible for plenty of programs that will result in him receiving several thousands of dollars of federal and state money in order to help his family. I assume it's the same in your country.
    yes and no. Our systems are so different on so many fronts. For example, if a person can get state aid because of poverty, that aid will be taxed just as if it was a wage. It is the principle. The tax itself is the minimum of course and it is not much, but in principle there are very few incomes that are taxed regardless of the source.

    In terms of efficiency, why would we want to tax his income at all, if we're just going to be giving him the money back in another way?
    I agree it is not very efficient, however in this case efficiency must give away for fairness. Plus everything is done electronically these days so the administrative stuff is rather minimum. In Denmark companies and banks report what they pay in wages and via the tax paper that every employee has to provide the company, the company on behalf of the tax man, takes the require tax and pays it to the tax man. It is all done automatically. On top of that, the tax man pretty much does the tax return for you and all you have to do is either amend it if something is wrong or add if there is something missing. For example as an election monitor you get 600 kr per day, which has to be reported and is not automatic.

    The whole idea, is that everyone, from the paper boy to the CEO pays income taxes in some way and hence contributes to society.

    Adding the tax will only create an additional incentive for him to work off the books, which is what already happens here. It's amazing how often people (especially poor people) work off the books so as to avoid paying SS/Medicare taxes. I think it would be best if we eliminated all up-front taxes for those who made less than $20k or so.
    You could also argue having a tax break for the first 20k will mean people wont work for more than the 20k.. not exactly good either, since they regardless of income use state services. The way the Danes and most Europeans do it, is that everyone contributes regardless of what part of society.. heck even pensioners pay income taxes in Denmark, granted at the minimum level, but they pay it.
    Last edited by PeteEU; 10-04-09 at 01:45 PM.
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