How much of our earnings is enough?

Old Sarge said:

Do you trust the money hungry congress not to restart an income tax along with a national sales tax? I sure don't. The VAT in Europe was supposed to replace income taxes as I remember. But now they have both.

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The national sales tax would require the repeal of the 16th amendment or it's definitely a no go.

lefty louie said:

Pretty simple question, it's estimated that American's pay about 50% of earnings towards taxes and fees. At what point is it too much?

When will you say, enough already, you (the govt.) needs to stick to an income level. (Keep in mind that, every time you or I get a raise or earn more money the govt. gets an increase too. If we must stick to a predetermined budget why should we not expect our govt. to?

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Its too much when its more than someone else pays for the same services, and more than required to fund the minimal services required to protect life and liberty, and whatever else we all agree to fund (as opposed to just the majority).

MTAtech said:

Federal taxes, which are the majority of taxes, were never based upon taxes on assets. Since 1913, there was a tax on income. During and after WWII, top income tax rates were high, which did a lot of good things, especially lower income inequality. Since lowering those taxes in the late 1970s, income inequality has overrun the robber baron days in the 1920s.

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Correlation without causation fallacies are not arguments.

If you look at who paid that rate pretty much no one. Maybe 1-5% of the population.

MTAtech said:

That's the most regressive tax. The wealthy consume but a fraction of their income while the poor consume all of it. Thus, the poor will be paying the highest p% of their income in taxes.

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As long as there is a minimum income of which no tax is paid then no it isn't regressive.
Payroll taxes are much more regressive on the poor.

Someone who spends 10m dollars in a year will pay well more in tax than someone who spawned 24k ahead and pays nothing in tax.

ludin said:

Correlation without causation fallacies are not arguments.

If you look at who paid that rate pretty much no one. Maybe 1-5% of the population.

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Hmmmmm .... perhaps the TOP 1-5%??

That's kinda the friggin point.

lefty louie said:

Pretty simple question, it's estimated that American's pay about 50% of earnings towards taxes and fees. At what point is it too much?

When will you say, enough already, you (the govt.) needs to stick to an income level. (Keep in mind that, every time you or I get a raise or earn more money the govt. gets an increase too. If we must stick to a predetermined budget why should we not expect our govt. to?

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We should pay however much we have to pay to achieve the objectives of our society.

You want clean water?
An education populace?
Roads?
Effective power grid?
Security from foreign invaders?
Protection and assistance when natural disasters occur?
The list goes on and on...

It's not cheap to have a first class society. But, if that's not what you want, there are other places on Earth that can provide you with what you seek.

Critter7r said:

Hmmmmm .... perhaps the TOP 1-5%??

That's kinda the friggin point.

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Which was basically no one at that time.

Maybe a few thousand people at the time.
The reason that people did better is that the majority of people paid nothing in taxes.
I would do a lot better if I didn't have to pay taxes.

The amount of money I lose every month to the federal government is insane.
Which is why I am looking forward to this tax bill.

I will have a few thousand extra dollars a year that I don't have now.
I already ran the numbers. Even though they are early.

They kept the senate tax brackets. Which will highly benefit lower and middle income class people.

Still it is a correlation without causation fallacy.

Investment income is probably the biggest reason why there is a difference. People that
Invest are in general more wealthy than people that do not.

ludin said:

Which was basically no one at that time.

Maybe a few thousand people at the time.

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So was it "basically no one"? Or was it between 1% and 5% of the employed population?

If there are a hundred million people employed (that level was reached during Reagan's tenure), that's between 1 and 5 MILLION people. That's just a bit more than "a few thousand" either way.

The reason that people did better is that the majority of people paid nothing in taxes.
I would do a lot better if I didn't have to pay taxes.

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The tax schedule hasn't been structured significantly different than it is now. (Warning, all of the numbers I'm about to post are adjusted to 2013 dollars, so they can be directly compared. Sorry Conservative) In fact, people at lower incomes used to pay MORE than they do now, not less. For example, in say, 2013, the 15% bracket went all the way up to $72,500, but in 1970 the 15% bracket only went to $5,917 (in 2013 dollars). Then (still in 1970) a Single person paid 16% up to $8,876; 17% up to $11,835; 19% up to $23,669; 22% up to $35,504; 25% up to $47,339; 28% up to $59,174; 32% up to $71,008 and 36% up to $82,843.

A single person earning $75,000 would have paid $18,182 in Federal Income tax in 1970, whereas that same person earning $75,000 would have paid only $10,607 in Federal Income tax in 2013. So no, the majority of the people DIDN'T "pay nothing in taxes". And the median income in 1970 was almost $61,000.

The amount of money I lose every month to the federal government is insane.

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It's peanuts compared to 40 years ago.

Which is why I am looking forward to this tax bill.

I will have a few thousand extra dollars a year that I don't have now.
I already ran the numbers. Even though they are early.

They kept the senate tax brackets. Which will highly benefit lower and middle income class people.

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And it will even more highly benefit the top earners in both percentages and nominal dollars.

Still it is a correlation without causation fallacy.

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Possibly. But if Conservative can stick to his narrative about Reagan's tax cuts causing Federal revenues to increase by 60% without taking into account the fact that inflation went up 45% during the same period and interest rates were cut by more than half, then I don't feel too bad about sticking with the idea that higher tax rates on the wealthy is at least one factor that will help to keep income inequality in check.

Investment income is probably the biggest reason why there is a difference. People that
Invest are in general more wealthy than people that do not.

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Because poor people don't have extra money lying around that they aren't using to survive.

Critter7r said:

So was it "basically no one"? Or was it between 1% and 5% of the employed population?

If there are a hundred million people employed (that level was reached during Reagan's tenure), that's between 1 and 5 MILLION people. That's just a bit more than "a few thousand" either way.



The tax schedule hasn't been structured significantly different than it is now. (Warning, all of the numbers I'm about to post are adjusted to 2013 dollars, so they can be directly compared. Sorry Conservative) In fact, people at lower incomes used to pay MORE than they do now, not less. For example, in say, 2013, the 15% bracket went all the way up to $72,500, but in 1970 the 15% bracket only went to $5,917 (in 2013 dollars). Then (still in 1970) a Single person paid 16% up to $8,876; 17% up to $11,835; 19% up to $23,669; 22% up to $35,504; 25% up to $47,339; 28% up to $59,174; 32% up to $71,008 and 36% up to $82,843.

A single person earning $75,000 would have paid $18,182 in Federal Income tax in 1970, whereas that same person earning $75,000 would have paid only $10,607 in Federal Income tax in 2013. So no, the majority of the people DIDN'T "pay nothing in taxes". And the median income in 1970 was almost $61,000.



It's peanuts compared to 40 years ago.



And it will even more highly benefit the top earners in both percentages and nominal dollars.



Possibly. But if Conservative can stick to his narrative about Reagan's tax cuts causing Federal revenues to increase by 60% without taking into account the fact that inflation went up 45% during the same period and interest rates were cut by more than half, then I don't feel too bad about sticking with the idea that higher tax rates on the wealthy is at least one factor that will help to keep income inequality in check.



Because poor people don't have extra money lying around that they aren't using to survive.

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You are not even in the right year. He is talking about 1930-1940s during WWII 2.

In 1945 the tax rate was 94% but only applied to incomes over 200k.
Tax Rates of the Mid-20th Century | Teachinghistory.org

income inequality isn't an issue due to the nature of our money system.
Income inequality is only an issue if we have a zero sum banking system.

I really wish people would understand the economy instead of mindless talking points.
Maybe if those people could keep more of the money they earn they could invest.
Interesting.

ludin said:

Your not even in the right year. He is talking about 1930-1940s during WWII 2.

In 1945 the tax rate was 94% but only applied to incomes over 200k.
Tax Rates of the Mid-20th Century | Teachinghistory.org

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He said ...

Quote Originally Posted by MTAtech View Post

Federal taxes, which are the majority of taxes, were never based upon taxes on assets. Since 1913, there was a tax on income. During and after WWII, top income tax rates were high, which did a lot of good things, especially lower income inequality. Since lowering those taxes in the late 1970s, income inequality has overrun the robber baron days in the 1920s.

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So I picked a year that was a little while prior to when he claimed those taxes were lowered. The top rate in 1970 was 70%, I just didn't list them all out.

In 1970, there were about 71 Million people employed, the top 1% of earners would be 710,000 people. STILL more than "a few thousand".

Even back in 1945, there were 45 Million people employed ... 1% of that is 450,000 people. Also, STILL more than "a few thousand".

Critter7r said:

He said ...



So I picked a year that was a little while prior to when he claimed those taxes were lowered. The top rate in 1970 was 70%, I just didn't list them all out.

In 1970, there were about 71 Million people employed, the top 1% of earners would be 710,000 people. STILL more than "a few thousand".

Even back in 1945, there were 45 Million people employed ... 1% of that is 450,000 people. Also, STILL more than "a few thousand".

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You didn't even read anything I posted which is typical.
The fact is he committed a correlation without causation fallacy.

In 1945 the tax rate was about 94%, but no one paid it and it was only on people that made 200k a year or more.

https://almostclassical.blogspot.com/2011/03/90-tax-rate-myth.html

Needless to say there is not link between lower taxes and wealth inequality.
Wealth inequality starts with segments of the population not working to their full potential.
Whether it is not finishing high school or not going to college or not completing college.

Also wealth inequality is fueled by a society that is bent on spending rather than saving and investing.
https://www.cnbc.com/2017/11/17/shoppers-are-still-paying-off-debt-from-2016-holidays.html

Next is just general debt. Most income inequality occurs over credit card debt.

The average American has 15k in credit card debt. Which is virtually insane.
That is money taken away from disposable income.

It hurts you rather than helps you.
I know. We use to have a good bit of credit card debt. More when I got married.
In that time we have paid off over 10k in credit cards and paid off 2 vehicles.
Over all almost 30k in just that. Now we have financial freedom that other people don't.

Perotista said:

During WWII the government came up with the with holding of taxes from your check. If one had to write a check to the government every April instead of having some with held every week, the percentage would be much lower. Most Americans wouldn't stand for the government taking as much as they do.

This goes back to what one doesn't have, one doesn't miss it. If you never see the total amount of money you make, you don't really know how much goes to the government. You'd be surprise at how many people think the net amount they get is actually what they earn and not the gross.

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Sure, if you're happy asserting superstitions as facts.

lefty louie said:

And not 1 answer to a simple question, "How much is too much?"

Let's see if maybe you'll answer it simply with this:

Is 10% too much?
20%
30%
40%
50%
55%
60%
70%
75%
80%?

At what point do you throw your arms up and say, "WTF, how much of what I earn are you going to leave me with?"

Don't overcomplicate this folks.

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Don't you suppose it makes sense to consider what resources the government needs before arbitrarily dictating something stupid that will crash our economy because our country would fall apart?