45 % of americans pay no federal income tax.

Citizen.Seven said:

The only fair tax is a flat tax: everyone pays the same rate. If you want a federal government that costs north of 20% of all income to run, then you better be willing to fork over your 20%. It's disgusting that so many people who pay nothing want some to pay knocking on 40% on some of their income. No deductions, no marriage penalty or benefit, no dependent deductions, etc. Each individual pays X% of income. Period. Otherwise, you have the current situation of the baby birds squawking for ever more without contributing anything, or a pittance. So, here's the tax form:

1. Gross Income: ___________
2. Multiply 1 by X%: ____________
3. Send the amount in line 2 to the federal government.

So, if you want a federal government that costs 20%, or 25%, or 30% or whatever of total income, then you will be contributing exactly that percentage of your income to it.

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And if that taxation makes you homeless and starving while consumer spending plummets so be it? Why do want blood from stones?

ARealConservative said:

a tax on labor at any rate is a a no no. at no point do people get to decide how much of my time they get to take from me.

we can find other sources of revenue besides servitude.

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I agree with you in principle BUT if you're going to have an income tax, and there is a constitutional amendment allowing it, then this is the only fair way to do it.

KLATTU said:

45% of Americans pay no federal income tax - MarketWatch
Despite the fact that rich people paying little in the way of income taxes makes plenty of headlines, this is the exception to the rule: The top 1% of taxpayers pay a higher effective income-tax rate than any other group (around 23%, according to a report released by the Tax Policy Center in 2014) — nearly seven times higher than those in the bottom 50%.

On average, those in the bottom 40% of the income spectrum end up getting money from the government. Meanwhile, the richest 20% of Americans, by far, pay the most in income taxes, forking over nearly 87% of all the income tax collected by Uncle Sam.

Rich people pay nearly 87% of all federal individual income tax in America.

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So...why is it, then, that ALL the richest, most well-developed democracies in the world have high effective taxes on the rich and little if any on the poor? Why is it that third-world democracies - which generally have low taxes for the rich - aren't nearly as well-off as economic tyrannies like America where the rich are SO downtrodden?

iguanaman said:

And if that taxation makes you homeless and starving while consumer spending plummets so be it? Why do want blood from stones?

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Oh what nonsense. The point of federal taxation is to pay for the federal government. If you want a bigger spendier federal government, then be willing to pay for it or sit down. This gives you more incentive to vote for lower taxation, since it actually affects you.

iguanaman said:

So it sounds fair that the poor pay tax on 100% of their income while the rich only pay on a small % of theirs? How is that fair?

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How do you come up with that? That's DEFINITELY not the way things work in the real world.

Citizen.Seven said:

I agree with you in principle BUT if you're going to have an income tax, and there is a constitutional amendment allowing it, then this is the only fair way to do it.

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I'm not sure if I would call that fair or not. I think it is better then what we have, but it still seems pretty flawed.

so the guy in New York making 50k pays the same amount as the guy in Iowa making 50k? 50k in Iowa provides a much higher standard of living.

the best system would be to tax each state based on something related to both the GDP produced by the state, and population of the state. then each state can figure out for itself how best to raise the money it owes the federal government.

Moderate Right said:

What's wrong with the rich being rich and the poor being poor? I used to be poor. My parents were fairly poor. I'm middle class now, striving to make myself better. Most of the poor can make their lives better if they choose to, just like I did. I didn't win the lottery. If they don't have any incentive to make their lives better, like I did, why should the rich take care of them? I'm jealous of the rich myself but I know it is not their job to take care of me just because they have oodles of money they don't need. Why can't a billionaire give me a measly $100,000? The answer: Because they don't have to and I don't expect them to. I have no problem in taking care of the sick and disabled.

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Who is saying there is a problem with there being both rich and poor? Progressive taxation does not eliminate the rich, it only maximizes the money available for consumer spending which boosts the economy and helps us all. Why is that so hard to grasp? Do you want to pay more so we can further reduce taxes on billionaires that are already paying record low rates? That is the only alternative.

iguanaman said:

Who is saying there is a problem with there being both rich and poor? Progressive taxation does not eliminate the rich, it only maximizes the money available for consumer spending which boosts the economy and helps us all. Why is that so hard to grasp? Do you want to pay more so we can further reduce taxes on billionaires that are already paying record low rates? That is the only alternative.

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What is wrong with the status quo? As you said, there are both rich and poor now and who said anything about there being a problem with that? Let's tax the rich more and give it the poor. But, if there are still poor then we will need to tax the rich more, and if there are still poor after that we will need to tax the rich even more. Who decides when we tax the rich more? If you are ok with there being rich and poor then why not just leave things the way they are now?

ARealConservative said:

I'm not sure if I would call that fair or not. I think it is better then what we have, but it still seems pretty flawed.

so the guy in New York making 50k pays the same amount as the guy in Iowa making 50k? 50k in Iowa provides a much higher standard of living.

the best system would be to tax each state based on something related to both the GDP produced by the state, and population of the state. then each state can figure out for itself how best to raise the money it owes the federal government.

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That's pretty much the way it was prior to the 16th amendment, per article 1, section 2, clause 3:

Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers

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However, that was pretty much nullified by the 16th amendment.

Citizen.Seven said:

That's pretty much the way it was prior to the 16th amendment, per article 1, section 2, clause 3:



However, that was pretty much nullified by the 16th amendment.

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close. they used population only, but the actual revenue of citizens of a state would be a factor in this system.

KLATTU said:

45% of Americans pay no federal income tax - MarketWatch
Despite the fact that rich people paying little in the way of income taxes makes plenty of headlines, this is the exception to the rule: The top 1% of taxpayers pay a higher effective income-tax rate than any other group (around 23%, according to a report released by the Tax Policy Center in 2014) — nearly seven times higher than those in the bottom 50%.

On average, those in the bottom 40% of the income spectrum end up getting money from the government. Meanwhile, the richest 20% of Americans, by far, pay the most in income taxes, forking over nearly 87% of all the income tax collected by Uncle Sam.

Rich people pay nearly 87% of all federal individual income tax in America.

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Then why when ALL taxes are included into the equation is the amount paid by rich people, working people, and poor people within just a few percentage points of each other as percentages of income?

ARealConservative said:

close. they used population only, but the actual revenue of citizens of a state would be a factor in this system.

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I disagree with that addition, as it just gives poorer states incentive to increase taxation on the richer. This is really no different than the current progressive taxation system, the only difference being that individual states would have to figure out how to apportion the taxes among its citizens. It also means that individuals would have to fill out "income reports" for the federal government, otherwise the total state income tax due would be based on (manipulable) projections. We have the census already, that should be sufficient.

Of course, all of this is moot as long as the 16th amendment is in force. The United States are still subject this amendment, as are their citizens.

Citizen.Seven said:

I disagree with that addition, as it just gives poorer states incentive to increase taxation on the richer. This is really no different than the current progressive taxation system, the only difference being that individual states would have to figure out how to apportion the taxes among its citizens. It also means that individuals would have to fill out "income reports" for the federal government, otherwise the total state income tax due would be based on (manipulable) projections. We have the census already, that should be sufficient.

Of course, all of this is moot as long as the 16th amendment is in force. The United States are still subject this amendment, as are their citizens.

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this is way different. states would have to compete with each other. a state with a draconian tax policy would chase the revenue producers out of the state, which would successfully prevent what you are concerned with.

David_N said:

Look how much the rich are suffering! They're getting no new income and can't afford to save anything!

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And how does that relate to the OP.

KLATTU said:

45% of Americans pay no federal income tax - MarketWatch
Despite the fact that rich people paying little in the way of income taxes makes plenty of headlines, this is the exception to the rule: The top 1% of taxpayers pay a higher effective income-tax rate than any other group (around 23%, according to a report released by the Tax Policy Center in 2014) — nearly seven times higher than those in the bottom 50%.

On average, those in the bottom 40% of the income spectrum end up getting money from the government. Meanwhile, the richest 20% of Americans, by far, pay the most in income taxes, forking over nearly 87% of all the income tax collected by Uncle Sam.

Rich people pay nearly 87% of all federal individual income tax in America.

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Just to point out.. this figure is a misnomer. It should be that "at any one time".. 45% of americans pay no federal income tax. THAT is true. But the reality is that the vast majority of these folks will be net TAX PAYERS over their lifetime.

I pay a buttload of federal income taxes.. I dare say more than most on this board.

I paid no federal income taxes when I was in school because my income was lower than what was required for federal income tax.

My grandmother paid federal income taxes for most of 80 years.. and did not pay federal income taxes for that last 7years.

Moderate Right said:

What's wrong with the rich being rich and the poor being poor?

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Nothing, as long as the rich aren't too rich, and the poor aren't too poor.

From a purely practical perspective: A mass of poverty, in the wealthiest nation on earth, doesn't make sense, and will lead to deep political unrest. We also rely heavily on local funding for education, which all but guarantees that the poor will stay poor -- because the students who need the most services wind up being the students who receive the least and weakest educational resources.

To make matters worse, we've increasingly shredded the safety nets. Welfare is basically gone, AFDC pays a pittance, subsidized housing covers a fraction of those who qualify.

Intense concentrations of wealth in the hands of a few is also problematic, as it concentrates too much power into the hands of a few. This effectively disenfranchises most citizens, since it is only the wealthy who can buy access (or run for office).

I used to be poor. My parents were fairly poor. I'm middle class now, striving to make myself better.

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That's nice, but anecdotes don't really change anything. Statistically speaking, we are nowhere near optimal levels of economic mobility.

Most of the poor can make their lives better if they choose to, just like I did.

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No, they can't. It is much harder to get ahead when you are one paycheck away from homelessness; and simply because you made the jump to an upper quintile does not mean everyone can.

For example, jumping from lower incomes to middle incomes was relatively easier in the 1950s and 1960s, as there was lots of well-paying union-protected low-education jobs, mostly in manufacturing. For a variety of factors, those jobs are mostly gone; thus, someone with only a high school education is far less likely today to earn a middle-class living. Meanwhile, the cost of higher education is outstripping inflation, and loans (many of which are private) can place a huge burden on students.

Why can't a billionaire give me a measly $100,000?

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No one is asking billionaires to give cash grants to individuals.

What we are doing is using the tax system, and other government actions, to blunt the sharp edges of income inequality.

I have no problem in taking care of the sick and disabled.

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Good news! Huge chunks of federal spending pay for Social Security, Medicare and Medicaid. Oh, and military. You do want a military, right?

How about FBI? DEA? Federal courts? Debt servicing? Education? Veterans? Highways and transportation?

The reality is that very little of the federal budget goes to anything we'd call "welfare" today. AFDC, TANF and housing are very likely 5% of the budget or less. Nearly 80% of the federal budget goes to Social Security, Medicare, Medicaid, military, and interest on debt.

haymarket said:

Then why when ALL taxes are included into the equation is the amount paid by rich people, working people, and poor people within just a few percentage points of each other as percentages of income?

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A percentage of 20K single earner is a heck of a lot different than single 100K earner, even if you tax them at identical percentages.

They use the same Highways, libraries, parks, and other government operated facilities.

Why should a 100K earner have to pay more for the same facilities?

The entire TAX system is a sham, and a selective redistribution of wealth.

A pay as you go tax is the only fair tax.

ARealConservative said:

this is way different. states would have to compete with each other. a state with a draconian tax policy would chase the revenue producers out of the state, which would successfully prevent what you are concerned with.

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Sure, the state's implementation of collecting taxes to pay the federal bill would foster competition between the states. I get that. But the problem is determining how big the federal government is (i.e. how much it spends), as well as how it determines the amount apportioned to each state based on income.

Let's say we have two states of identical population, but one has 2x the income of the other. First of all, in order to determine that 2x number, each individual in every state would still have to report to the federal government their income. Think of it as an income census. From that, the feds determine what each state owes. So, it still means individuals reporting income, which is one of the obnoxious intrusive elements of the 16th amendment.

Secondly, there's determining the total spending of the feds. The smaller income states are going to want more federal spending. In the example above, the lower income state is going to want to maximize federal spending, as it pays half of what the larger income state does. Since, presumably, federal spending will be more-or-less proportional to population like it is now (and in most iterations of democratic implementations), then the larger income state will be subsidizing the smaller one, and that will only spiral as the current system does to the individual.

Moderate Right said:

You can't tell me that 45% of Americans can't afford to pay ANY federal income taxes, not even $100. The poverty rate I believe is somewhere around 15%, so that means 30% who pay no federal income taxes could afford to pay something, even if only a little.

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Oh, it gets far better than that, many get back in refunds more than they actually paid into the system, guess who paid for that little bonus. I agree with the Consumption tax, no loop holes for the rich and the less affluent only pay on items they buy beyond the necessities of life fair for all consumers. Strange how being fair in taxation gets some all bent out of shape, that is until them themselves start earning good money and then the tune changes quickly.

RetiredUSN said:

A percentage of 20K single earner is a heck of a lot different than single 100K earner, even if you tax them at identical percentages.

They use the same Highways, libraries, parks, and other government operated facilities.

Why should a 100K earner have to pay more for the same facilities?

The entire TAX system is a sham, and a selective redistribution of wealth.

A pay as you go tax is the only fair tax.

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I am talking about percentages of income. Why is it that when ALL taxes paid are considered, the difference in percentage points between all classes of people is only a few points different?

Citizen.Seven said:

Let's say we have two states of identical population, but one has 2x the income of the other. First of all, in order to determine that 2x number, each individual in every state would still have to report to the federal government their income. Think of it as an income census. From that, the feds determine what each state owes. So, it still means individuals reporting income, which is one of the obnoxious intrusive elements of the 16th amendment.

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3 or 4 states would have some difficulty, but the rest have sales tax, which is essentially a percentage of GDP activity within the state. so they already have the capability of reporting income in the state.

akrunner88 said:

But it's tyranny that they don't pay taxes :roll:

It's a consumption based economy people. And the poor and middle class do most of the consuming. Get over it.

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The rich consume more than the poor. Sure, its a smaller share of their income, but its a larger share of the economy. Thus, the rich do most of the consuming, not the poor.

Economist's View: Consumption and Income Inequality

haymarket said:

I am talking about percentages of income. Why is it that when ALL taxes paid are considered, the difference in percentage points between all classes of people is only a few points different?

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But not everyone will read and fully understand what you wrote.

A percentage system is by design is a selective distribution of wealth.

Citizen.Seven said:

The only fair tax is a flat tax: everyone pays the same rate. If you want a federal government that costs north of 20% of all income to run, then you better be willing to fork over your 20%. It's disgusting that so many people who pay nothing want some to pay knocking on 40% on some of their income. No deductions, no marriage penalty or benefit, no dependent deductions, etc. Each individual pays X% of income. Period. Otherwise, you have the current situation of the baby birds squawking for ever more without contributing anything, or a pittance. So, here's the tax form:

1. Gross Income: ___________
2. Multiply 1 by X%: ____________
3. Send the amount in line 2 to the federal government.

So, if you want a federal government that costs 20%, or 25%, or 30% or whatever of total income, then you will be contributing exactly that percentage of your income to it.

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No, thats still not fair, because the more you make, the more you pay, for the same service. Imagine paying for hamburgers that way. A poor person would get it for 1 cent. A rich person would pay $1000. Is that fair, ie. equal?

jonny5 said:

The rich consume more than the poor. Sure, its a smaller share of their income, but its a larger share of the economy. Thus, the rich do most of the consuming, not the poor.

Economist's View: Consumption and Income Inequality

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The rich buy boats, yachts, air planes, very nice cars, live in expensive houses.....etc. etc. etc.

Their spending and taxes contribute to a lot of jobs and tax revenue for local, state, and the Federal.