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Did you pay your $12K?

austrianecon said:
Oh, it's much worse then that. Roughly 45% of those with taxable income actually pay ZERO in federal income taxes.
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That would not be correct, sir. If you have taxable income, by definition, you pay tax. Sorry, that technicality may be lost on most. I get your point.

Some of those that comprise the delta between citizens and taxpaying citizens are children, the retired and the infirm. That said, 45 (or lower these days) of wage earners do not pay FIT.... that is another story, but it starts with the fact that income tax is a tax on discretionary income, not total income.... and 45% of Americans have no discretionary income.
 
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Nuber said:
Please note all numbers are rounded for ease of discussion.

2016 Federal expenditures were about $4 trillion dollars.

2016 estimates for USA population are 325 million people.

In order to be fair, everyone in the US should have paid the feds about $12K in 2016.

Did you pay your $12K?
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It doesnt work that way.
 
molten_dragon said:
Social security and medicare expenditures make up about half of the $4 trillion OP mentioned. So if those aren't included, each person's share is only $6,000.
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Those are definitely included because I had to pay them against my will.
 
As a single man, I wish 12k was all I had to pay in.
 
austrianecon said:
Oh, it's much worse then that. Roughly 45% of those with taxable income actually pay ZERO in federal income taxes.
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Well, sort of. They're still paying social security and medicare taxes, which are federal taxes on income. So they're paying something, it's just a low percentage.
 
I don't know why I am responsible for other peoples reckless spending.
so I pay as little in tax as I can.
 
upsideguy said:
That would not be correct, sir. If you have taxable income, by definition, you pay tax. Sorry, that technicality may be lost on most. I get your point.

Some of those that comprise the delta between citizens and taxpaying citizens are children, the retired and the infirm. That said, 45 (or lower these days) of wage earners do not pay FIT.... that is another story, but it starts with the fact that income tax is a tax on discretionary income, not total income.... and 45% of Americans have no discretionary income.
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Actually it would be correct. I clearly defined it as INCOME TAX.. i.e. what payment is due every year by April 16th. Having taxable income doesn't actually mean you pay taxes either. You have such things as deductibles as well. If you read the charts in that article you will find that the lower 40% of American earners actually pay negative taxes, i.e. get a transfer of wealth back to them.

Another fact you are wrong on is it's not a tax on discretionary income. Discretionary income is the amount of income that a household or individual has to invest, save or spend after taxes and necessities are paid.
 
molten_dragon said:
Well, sort of. They're still paying social security and medicare taxes, which are federal taxes on income. So they're paying something, it's just a low percentage.
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FICA taxes are an insurance tax, i.e. a form of a premium. They actually contribute ZERO to funding the Federal budget.
 
I don't want to thanked as much as I want to NOT be demonized. Don't crap all over me, then take my tax contribution, just take it and keep lips shut ;0
 
Mach said:
I don't want to thanked as much as I want to NOT be demonized. Don't crap all over me, then take my tax contribution, just take it and keep lips shut ;0
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Keep your lips shut! :) Yes, every member of my family pays their 12K annually or more.
 
austrianecon said:
Actually it would be correct. I clearly defined it as INCOME TAX.. i.e. what payment is due every year by April 16th. Having taxable income doesn't actually mean you pay taxes either. You have such things as deductibles as well. If you read the charts in that article you will find that the lower 40% of American earners actually pay negative taxes, i.e. get a transfer of wealth back to them.

Another fact you are wrong on is it's not a tax on discretionary income. Discretionary income is the amount of income that a household or individual has to invest, save or spend after taxes and necessities are paid.
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Actually, I am not wrong. Taxable income, by definition, its Total Income less adjustments (to arrive at Adjusted Gross Income) then less exemptions and deductions to arrive at Taxable Income, on which you assuredly pay income tax. That would be line 43. No taxable income / no income tax. (FYI, I hold a cpa certificate -- feel free to continue to argue this point with me....after you double check what you are saying)

https://www.irs.gov/pub/irs-pdf/f1040.pdf


As to the tax being on discretionary income, that is more of a descriptive opinion. No, we pay tax on taxable income (calculated as per above). However, if you follow that tax theory, you will note that provision is made to reduce total income through deductions and exemptions. These deductions and exemptions (and credits) are generally about necessities / basic living expenses... hence, what is left over is functionally on discretionary income, on which tax is assessed. Those without sufficient income to cover basic living expenses generally have no taxable income and pay no tax.

The idea of the earned-income credit is to generally "give back" a portion of the payroll taxes paid to persons who's income is so low so as to qualify for the E-I-C.
 
austrianecon said:
FICA taxes are an insurance tax, i.e. a form of a premium. They actually contribute ZERO to funding the Federal budget.
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You sure?

Searching FICA it says
---
Federal Insurance Contributions Act
FICA is an acronym for "Federal Insurance Contributions Act." FICA tax is the money that is taken out of workers' paychecks to pay older Americans their Social Security retirement and Medicare (Hospital Insurance) benefits. It is a mandatory payroll deduction
----
 
austrianecon said:
FICA taxes are an insurance tax, i.e. a form of a premium. They actually contribute ZERO to funding the Federal budget.
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That is true or not true depending on which budget theory you subscribe to.

If you think the federal budget is >$4T, then you subscribe to the theory the FICA contributes to the funding. You also subscribe to that theory if you think Bush's tax cut worked OR that the federal deficit was ever under $350B during his administration, then you also subscribe to the theory that FICA is federal tax monies.
 
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austrianecon said:
FICA taxes are an insurance tax, i.e. a form of a premium. They actually contribute ZERO to funding the Federal budget.
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Only if you're talking about the federal budget with medicare and Social Security removed from it. Which is kind of stupid to do, since those two things make up half the federal budget.
 
One of the reasons for starting this thread was to find out reactions to the proportional individual expense that the feds spend on our behalf.

For my two cents, the discussions about whether or not FICA is a tax, or a fee, or a banana doesn't interest me. We are talking about nomenclature. The bottom line is the federal government obtains revenue, and spends it. Nuanced verbiage is looking at the micro, and I was interested in the macro. Valid discussions to be sure, just not what I was interested in.

I am curious, if you can't afford to pay your $12K (and an additional $12K for each of your charges), what is your opinion about federal spending?
 
Nuber said:
Please note all numbers are rounded for ease of discussion.

2016 Federal expenditures were about $4 trillion dollars.

2016 estimates for USA population are 325 million people.

In order to be fair, everyone in the US should have paid the feds about $12K in 2016.

Did you pay your $12K?
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This is an excellent way to demonstrate what's wrong with the system.

For starters, the idea that some people pay nothing while others pay $120,000 or $1.2 million is ridiculously unfair to those who acquire wealth in this country. With roughly half of Americans not paying net taxes at all, we have a serious disconnect between those who are supporting the federal government and those who are not. It is manifestly unfair to those of us who are that those who pay nothing receive the benefit of the franchise. Thomas Jefferson's warning about voting yourself funds from the treasury being the road to disaster has certainly been proven true in modern America.

Another enlightening idea here is that roughly a third of that $12,000 are legitimate functions for federal expenditures and that less than 25% of that $12k would be necessary were our debt down to a reasonable level. Imagine a yearly tax bill of just $3,000 or $4,000 instead? Wouldn't you prefer to have that $8-9k back so you can take care of your own health insurance and retirement needs? I sure would!

It's unconscionable how the federal tax system has evolved over the past century into a punitive redistributionist model for the purpose of buying votes from the ignorant and lazy among us. It's theft, pure and simple.
 
Wheelgun said:
I didn't think our nation adopted a rule or law that said we all pay the same? I only made $9600 last year it'd be hard for me to pay $12,000.
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I would also be hard for you to reduce "your share" of federal spending. The idea that federal sending must be offset by federal taxation has ceased to exist.
 
Nuber said:
One of the reasons for starting this thread was to find out reactions to the proportional individual expense that the feds spend on our behalf.

For my two cents, the discussions about whether or not FICA is a tax, or a fee, or a banana doesn't interest me. We are talking about nomenclature. The bottom line is the federal government obtains revenue, and spends it. Nuanced verbiage is looking at the micro, and I was interested in the macro. Valid discussions to be sure, just not what I was interested in.

I am curious, if you can't afford to pay your $12K (and an additional $12K for each of your charges), what is your opinion about federal spending?
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That (bolded above) assertion is simply not true. Federal spending is not limited to (by?) federal revenue and it is certainly not distributed to (or on behalf of) each citizen equally.
 
Moderate Right said:
Neither should be included.
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Wrong. There is no mandated relationship to the form of taxation (or borrowing) used and the spending that it supports. The "trust me" fund (a pile of IOUs?) was spent on other things. Social security and Medicare currently run in the red - they pay out more than their "dedicated" revenue supplies. How can you not count that?
 
Nap said:
As a single man, I wish 12k was all I had to pay in.
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My single children feel your pain. :lol: Of course now that we're double income empty nesters we really feel your pain. That being said I wouldn't trade places with my former self when we were young and struggling to raise a family and paying a fraction of the taxes we do now, no way, no how.
 
upsideguy said:
Actually, I am not wrong. Taxable income, by definition, its Total Income less adjustments (to arrive at Adjusted Gross Income) then less exemptions and deductions to arrive at Taxable Income, on which you assuredly pay income tax. That would be line 43. No taxable income / no income tax. (FYI, I hold a cpa certificate -- feel free to continue to argue this point with me....after you double check what you are saying)

https://www.irs.gov/pub/irs-pdf/f1040.pdf
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We don't disagree here. As I clearly said, Taxable income is after deductions. 40% of Americans deductions (and credits) put them at no taxable income due things like Earned Income Tax Credit. So we aren't arguing about anything here. Hell 15% of all "tax units" pay no payroll or federal income taxes.


upsideguy said:
As to the tax being on discretionary income, that is more of a descriptive opinion. No, we pay tax on taxable income (calculated as per above). However, if you follow that tax theory, you will note that provision is made to reduce total income through deductions and exemptions. These deductions and exemptions (and credits) are generally about necessities / basic living expenses... hence, what is left over is functionally on discretionary income, on which tax is assessed. Those without sufficient income to cover basic living expenses generally have no taxable income and pay no tax.

The idea of the earned-income credit is to generally "give back" a portion of the payroll taxes paid to persons who's income is so low so as to qualify for the E-I-C.
Click to expand...

It's not a descriptive opinion. Discretionary income = gross income - taxes - all compelled payments (bills). Disposable income is: total personal income - personal current taxes. Discretionary is measuring what you have left over to spend on non-essential items.

Taxes aren't assessed on your discretionary income or your disposable as you are taxed every pay period and then file.
 
Wheelgun said:
You sure?

Searching FICA it says
---
Federal Insurance Contributions Act
FICA is an acronym for "Federal Insurance Contributions Act." FICA tax is the money that is taken out of workers' paychecks to pay older Americans their Social Security retirement and Medicare (Hospital Insurance) benefits. It is a mandatory payroll deduction
----
Click to expand...

It's an insurance tax. It's earmarked specifically for Social Security and related programs. Federal Government borrows from it, thus a debt, not an tax income.
 
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