Do the Rich Pay Their Fair Share of Taxes in the United States?

I guess nobody wants to answer so I will post anyhow. If you are offended, too bad. :2razz: First of all I asked the question how many of you own a business or run one because I wanted to know if any of you have any true idea of the tax code is and why it is so convoluted, to use a mild term. If you are employed you are being taxed the highest, by PAYING your taxes FIRST then SPENDING what is left over SECOND. Businesses on the other hand SPEND their money FIRST, then PAY taxes on the leftovers SECOND. Most people who are in congress are fairly wealthy, and they wish to keep it. Most congressmen did NOT make their money being EMPLOYED. They did it though investing, or owning a buisness, or inherintence. Hence the laws are going to be such that they will be able to keep and make more wealth. If you are employed you will most likely NEVER gain any appreaciable wealth. To gain wealth requires calculated risk by investment, in youself, or others. Thats just the way things are rigged in this country. I am the owner of a corporation, I pay as little tax as I possibly can leagaly. Most of my money that I spend is BEFORE it is taxed. This gives me a huge advantage over someone who is just employed as I reduce my gross income down to a fraction of that of the employed person, with that spending. The courts say I have absolutely no obligation to pay more. I will not. I would rather spend my money on assets or with other people, then spend it on the goverment. I consider my self taxed too much because I have to spend so much time considering the Tax ramifications of anything I do. I have to employ accountants and lawers to make help me take advantage of every tax loophole or exculsion I can. This is money I can use otherwise to upgrade equipment, employ people and sponser more charities. This is time and effort that could be used to be more productive and take advantage of more opportunities.

If I am going to be miserable, I d rather be wealthy. I dont know anyone who does not want to be wealthy. Wealth is FREEDOM. The goal of every American ought to be Finacially independent and then free. Wealth allows you the freendom to stand up for yourself, your priciples.

Taxes in my opinion should be no more then 10% total all inclusive on your SPENDING. That includes state and local taxes. If its good enough for god, its good enough for goverment. The locals would collect it and keep 40% and pass the rest to the state. The state would then keep 50% and give 50% to the feds. The totals would break down this way Locals get 40%, state and feds get 30% each, for a total of 100%. The tax would be on all NEW goods and on services. No exemptions. No other tax or fee or other goverment revenue collection would be allowed. The locals would have their state by the short and curlies, and the states would have the feds by the short and curlys as well. This would apply to everyone and every business. Sweet and simple, and equitable.

Thats my take. Cheers.

Neomalthusian said:

I think that letting a family keep its assets in the family is essential. Having to forfeit a large chunk of a person's estate because they died is a bad tax policy idea for a number of reasons. The focus need not be on whether children have a right to inherit, but rather, should people have the liberty to build up savings and (if they don't have to burn through them), leave it to their children?

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Well of course people have the liberty to pass savings on to their children. People also have the liberty to hire people. But that doesn't mean that the recipient of the money can't be taxed for it.

I mean, sure, passing something on to your children is nice and all. We don't want to discourage that for no reason. But the same is true of any potential source of tax revenue. We don't want to "punish" working either, do we? So why the special treatment for this type? Certainly assets being concentrated on familial lines isn't more important to society than working. And morally I just can't get my head around how Paris Hilton getting $200 million in inheritance for doing nothing at all instead of getting $140 million for doing nothing at all seems like a larger problem to anyone than people who are working two jobs just to make ends meet coughing up another $60 million.

Neomalthusian said:

Personally, I think working 50 hours a week is not a sacrifice at all, because it contains virtually no investment risk. I can count on that paycheck if I put in 50 hours. Plus it feels healthy to actually, you know, work. Accepting investment risk, especially after the roller coaster of the last decade, is much more of a sense of sacrifice to me, because usually I'm putting up many, many 50-hour weeks' worth of disposable income and it could just evaporate because rich bankers and corporate knobjobs I've never met are taking enormous, stupid risks that send panic into the system and **** everything up.

To a motivated, risk-averse, conservative, prudent person, working a full time job is not thought of as sacrifice. We are not victims because we work. We are victims if our work is mooched off of excessively, however.

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Investment risk is wildly overblown. First off, the general public is taking some of that risk when the investor invests. Limited liability imposes the worst of that risk on society as a whole. Secondly, on balance they win. It's technically a risk, but not over the long term if they're not stupid about it.

TurtleDude said:

and even more importantly, it castrates the extraconstitutional power the government grabbed with the IRS

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Indeed it would. If I bought a home for fair market value in 1980, for $100,000 cash (made no improvements) and sold it for fair market value in 2012, for $200,000 cash then my "capital gain" is said to be $100,000 yet, after taxes, I can not even afford to buy that same home back (for cash). Is that fair?

TurtleDude said:

The only fair comparison when it comes to progressive tax rates are progressive taxes

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TD. This is so far beyond idiotic that I don't even know what to say. You're just openly admitting that you're intentionally only looking at progressive taxes and then declaring that the system is progressive... That's like saying "all marbles are blue" and ignoring the green marbles and then blurting out that it is only fair to look at the blue marbles. You need to get your act together. Why is this so much harder for you than it is for everybody else. Most people don't seem to have these problems with such basic concepts.

ttwtt78640 said:

Your "either or argument" makes me suspect that you work yet do not invest, so you prefer "equal" treatment of these earnings. Investing is needed to create jobs for all who work directly for, or do business with, any corporation or small business (just about everyone). Why put money in a bank, or invest it in a business if you can simply spend it now? Do you honestly believe that nobody should have any tax incentive to save or invest, rather than simply spend all of their income now? Why invest in the U.S. if they tax 100% of your gains, instead of Singapor or China if they do not? Much of the movement of capital and jobs to off-shore locations is precisely to avoid the higher U.S. taxation. The rich are not rich because they are stupid or patriotic.

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Investing isn't necessarily more beneficial than spending. The economy needs both. Mostly it needs spending. The overwhelming majority of payroll is covered by revenues, not investment. Investment is just there to spur companies along faster than their revenues could sustain in specific circumstances. New businesses often need investment as do businesses taking a very long term R&D approach or something. But overwhelmingly, businesses are sustained by spending, not investment.

teamosil said:

That's not a logical fallacy, that is what regressive means- takes a smaller share of your income the richer you are.

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I heard Warren Buffet admitted recently (the story with his secretary) the US was actually a regressive tax country. I suggest you change it to flat. :2razz:

DrM said:

Flat tax. . . .If a person makes 20K a year and someone makes 500K a year, in a flat tax, who is going to pay a greater "percentage" of their income toward tax?

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None. They will both pay the same %, so it's a "fair tax". In fact, the only fair tax possible at all.

teamosil said:

Investing isn't necessarily more beneficial than spending. The economy needs both. Mostly it needs spending. The overwhelming majority of payroll is covered by revenues, not investment. Investment is just there to spur companies along faster than their revenues could sustain in specific circumstances. New businesses often need investment as do businesses taking a very long term R&D approach or something. But overwhelmingly, businesses are sustained by spending, not investment.

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That is a chicken vs. egg argument. To sell something you must first make, grow or buy it. Try to start (or expand) ANY business with no investment. Use a simple one car, one driver taxi service as an example; it takes over $50K in investment to make that first $20 fare happen, not likely to happen without outside investment. After say, 10 years that taxi guy may be able to repay his investors, and make a decent living, yet he will likely never make enough to buy a second car (it took all his "profits" to replace his own car) and hire another driver, no matter how hard he works. But with investors, he may be able to show his potential for making them some good money, by using his 'experience' to show them he knows how, and get enough backing to buy ten cars and hire ten drivers. ;-)

ttwtt78640 said:

That is a chicken vs. egg argument. To sell something you must first make, grow or buy it. Try to start (or expand) ANY business with no investment. Use a simple one car, one driver taxi service as an example; it takes over $50K in investment to make that first $20 fare happen, not likely to happen without outside investment. After say, 10 years that taxi guy may be able to repay his investors, and make a decent living, yet he will likely never make enough to buy a second car and hire another driver, no matter how hard he works.

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Sure, but the same is true the other way around. How would the taxi cab business fare if nobody hired it to drive them around? So I don't see why we should give perks to investors to stimulate investment at the cost of depressing spending. They're both necessary.

What really is the rational thing to do is to adjust the relative levels over time as your needs for investment capital or consumer spending increase or decrease. Right now, we clearly need consumer spending more desperately than we need more investment.

teamosil said:

Sure, but the same is true the other way around. How would the taxi cab business fare if nobody hired it to drive them around? So I don't see why we should give perks to investors to stimulate investment at the cost of depressing spending. They're both necessary.

What really is the rational thing to do is to adjust the relative levels over time as your needs for investment capital or consumer spending increase or decrease. Right now, we clearly need consumer spending more desperately than we need more investment.

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Again you make a circular argument. I assume you want the the gov't to tax "rich" citizen A and give it to poor citizen B since A was not going to spend it and are quite sure that B will to "get things going". Or perhaps you more prefer the Obama borrow and spend approach, where you borrow and give it to B, so that B will spend that money and "get things going". But eventually you must tax A anyway just to pay back the debt, from that which you borrowed and gave to B. My approach would be to let A keep more after tax income and perhaps A will then invest more here, instead of in China. ;-)

ttwtt78640 said:

Again you make a circular argument. I assume you want the the gov't to tax "rich" citizen A and give it to poor citizen B since A was not going to spend it and are quite sure that B will to "get things going". Or perhaps you more prefer the Obama borrow and spend approach, where you borrow and give it to B, so that B will spend that money and "get things going". But eventually you must tax A anyway just to pay back the debt, from that which you borrowed and gave to B. My approach would be to let A keep more after tax income and perhaps A will then invest more here, instead of in China. ;-)

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It doesn't matter if A invests in China or the US, if they live here, they pay taxes here on investment income.

I'm not arguing anything about giving anybody money. I am arguing that we should tax all kinds of income according to the same brackets. The myth that investment income is somehow inherently more crucial than consumer spending is false, so that argument in favor of giving preferential tax treatment to investors fails.

Do any of you actually know how the Tax code works? I wonder because the rich are NOT as a general rule EMPLOYED. Therefor they are going to be taxed diffrently from those who are.

PirateMk1 said:

Do any of you actually know how the Tax code works? I wonder because the rich are NOT as a general rule EMPLOYED. Therefor they are going to be taxed diffrently from those who are.

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Not sure how you think that as relevant. Can you explain your position. Of course, yes, we realize that the rich mostly get their income from capital gains and investment income, and that because the rich have so much influence over out political system, those sources of income are taxed at lower rates. That's what we think is unfair.

mpg said:

Fairness is when everyone pays the same amount, not the same %, the same amount.

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No, that would mena poorer people pay more, carry more of the burden.

teamosil said:

It doesn't matter if A invests in China or the US, if they live here, they pay taxes here on investment income.

I'm not arguing anything about giving anybody money. I am arguing that we should tax all kinds of income according to the same brackets. The myth that investment income is somehow inherently more crucial than consumer spending is false, so that argument in favor of giving preferential tax treatment to investors fails.

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But you must also agree that the more a PERSON has to spend the more that they will likely spend. Anything taken by the gov't they obviously can not spend. ;-)

ttwtt78640 said:

But you must also agree that the more a PERSON has to spend the more that they will likely spend. Anything taken by the gov't they obviously can not spend. ;-)

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Right, that's the whole point. Shift the tax structure to favor the rich and disfavor the middle class, you get less spending more investment because the middle class spends a higher percentage of their income where the rich invest a higher percentage. Shift the tax structure to favor the rich and disfavor the middle class, you get more investment, less spending. Right now we have it cranked all the way over to favor the rich and we have tons of investment, not enough spending.

teamosil said:

Not sure how you think that as relevant. Can you explain your position. Of course, yes, we realize that the rich mostly get their income from capital gains and investment income, and that because the rich have so much influence over out political system, those sources of income are taxed at lower rates. That's what we think is unfair.

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Its relevent because the rate is pretty much meaningless. Employed people are taxed BEFORE they spend their money. Wealthy people are taxed AFTER they spend their money. We could have the exact same tax rate and make the exact same money, and I would come out on top of you simply because I OWN a business and you are EMPLOYED. Thats how the wealthy KEEP their money. If you want more control over how much tax you pay, dont be employed. Employed people have little control over their taxes. The wealthy CONTROL what they pay out in taxes.

By the way there is a diffrence between weathy and rich. Wealth is the accumulation of riches. Far better to be wealthy than rich.

Life is unfair. It is a cast iron bitch who will smack you down at every opportunity. The real question is are you gona take it lying down, or raise your middle finger to her, call her the she bitch is, and do something about it?

teamosil said:

Right, that's the whole point. Shift the tax structure to favor the rich and disfavor the middle class, you get less spending more investment because the middle class spends a higher percentage of their income where the rich invest a higher percentage. Shift the tax structure to favor the rich and disfavor the middle class, you get more investment, less spending. Right now we have it cranked all the way over to favor the rich and we have tons of investment, not enough spending.

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I love how you leave the poor out of taxation altogther, they get representation without taxation, helping to push your tax the rich plan even more. Perhaps the first thing we need to do is get the gov't limitted to spending only what they dare ask for in taxes, no more borrow and print money "budgets". Now the federal gov't simply borrows and promises to either raise taxes or cut spending, yet the gov't neither raises taxes nor cuts spending, they just raise their own credit limit; rinse and repeat. ;-)

ttwtt78640 said:

I love how you leave the poor out of taxation altogther, they get representation without taxation, helping to push your tax the rich plan even more. Perhaps the first thing we need to do is get the gov't limitted to spending only what they dare ask for in taxes, no more borrow and print money "budgets". Now the federal gov't simply borrows and promises to either raise taxes or cut spending, yet the gov't neither raises taxes nor cuts spending, they just raise their own credit limit; rinse and repeat. ;-)

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People living below the poverty line currently pay an average of 16% in taxes. Slightly more than the super rich do.

The notion that spending levels should be determined by tax revenues instead of the other way round is not something I agree with. The amount of spending we should be doing varies constantly. We should take every opportunity that is better suited to the public sector than the private sector where the benefits outweigh the costs. That could be $1 trillion at one point in history and $10 trillion at another point. If somebody figured out a way tomorrow where by spending $5 trillion we could boost our GDP by $10 trillion, the obvious thing to do would be to increase spending and taxes both by $5 trillion, thus generating a $5 trillion windfall for the American people. I do agree that we should balance our budget, and some of that should be through spending cuts, particularly in the military. But, we shouldn't view it like "we're willing to pay X, so live within that amount". That isn't a sensible strategy.

the options on this thread are deceptive because I don't believe the rich pay their fair share-they pay far far more while the lefties will claim they don't pay enough

teamosil said:

TD. This is so far beyond idiotic that I don't even know what to say. You're just openly admitting that you're intentionally only looking at progressive taxes and then declaring that the system is progressive... That's like saying "all marbles are blue" and ignoring the green marbles and then blurting out that it is only fair to look at the blue marbles. You need to get your act together. Why is this so much harder for you than it is for everybody else. Most people don't seem to have these problems with such basic concepts.

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\you labor under the delusion that the tax rate when every tax is combined -state and federal local and municipal should be strictly progressive. that is the only way you can utter such idiocy.

PirateMk1 said:

Do any of you actually know how the Tax code works? I wonder because the rich are NOT as a general rule EMPLOYED. Therefor they are going to be taxed diffrently from those who are.

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teamosil believes that the rich should always pay a higher rate no matter what. so that attitude transcends all arguments as to why investment income-which is subject to more risk etc than salary income should be taxed at different rates. They can never explain why the rich should be subject to a progressive rate on all taxes other than their assumption the rich should be taxed more. There is no rational reason for it, its based on class envy

Boo Radley said:

No, that would mena poorer people pay more, carry more of the burden.

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why not-maybe if that happened they wouldn't be so quick to demand more government spending

ttwtt78640 said:

I diasgree with having DIFFERENT individual "non-standard" deductions. It is your choice whether you have children, rent vs. buying home, pay cash vs. incurring credit interest, live in a high tax state or any other personal financial decision you make. Taxation is for revenue generation, not for "social engineering" or "social justice" causes. If you want to give away taxpayer money, then do it AFTER tax collection, directly by a gov't check that all may easily see the cost of, not through a sneaky complex quagmire of tax laws, so that its true cost may never be made known.

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I'm not talking about social engineering or anything like that. I simply think it's important that no one be forced to choose between paying their taxes and feeding their kids. Which is why I would base the cost of living deduction on family size. If you were going to have a single deduction with no factors involved for family size or where someone lived, it would have to be fairly high to cover people in high cost of living areas with a lot of kids.

Neomalthusian said:

Those are all transactions that trigger a tax. Exchanging something for another, in the form of a contract. Trade. Labor for money, and money for goods and services. Gifts and inheritance are not examples of this.

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How is a gift or an inheritance not a transaction. It's still money or goods changing hands. Why should money I worked hard to earn, adding some benefit to society, be taxed, while money I did absolutely nothing to earn, adding no benefit to society, be tax free.