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Do you have a higher effective tax rate than mitt romney

Do you have a higher effective tax rate than mitt romney?

  • Yes

    Votes: 21 53.8%
  • No

    Votes: 18 46.2%

  • Total voters
    39
I missed the point where the article spelled out whether it was included or not. However, the vast difference between FICA and FIT is a huge topic. That's why I did another thread.

Effective federal taxes are what a person actually pays.

"While payroll taxes eat up 6 percent of the income of Americans earning the national median income of $50,221, Mr. Romney and his wife paid just one-tenth of 1 percent of their income in payroll taxes."



So, do we remove the cap? Romney would see millions in SS coming back at him. His rate would go up, but he wouldn't really be contributing more. Do we make it progressive? If so, he still gets more back.

Please cite your source that says SS benefits were increased the many times the cap has been increased in the past?

I've seen other suggestions, like freeze benefits but remove cap. Basically, this is stating that after he's managed to cover his retirement, he should pay for everyone else's retirement with his money. This would be the most direct wealth redistribution I can see flowing through government short of taking your paycheck and handing it to the next guy.

Am I missing an option to fix it?

Yes:

Today, the richest 1 percent of Americans take home over 20 percent of the nation’s total income, almost twice as much as they did in 1983. And, thanks to the ceiling—currently set at $106,800—they pay no Social Security tax on most of what they make. As a result, the Social Security payroll tax now touches only 84 percent of the nation’s income, down from 91 percent in 1983. Lifting the cap to $180,000 would close that 7 percent gap.
Another Bad Ceiling | Commonweal magazine


"Remember, the Social Security payroll tax applies only to earnings up to a certain ceiling. (That ceiling is now $106,800.) The ceiling rises every year according to a formula roughly matching inflation.

Back in 1983, the ceiling was set so the Social Security payroll tax would hit 90 percent of all wages covered by Social Security. That 90 percent figure was built into the Greenspan Commission's fixes. The Commission assumed that, as the ceiling rose with inflation, the Social Security payroll tax would continue to hit 90 percent of total income.

Today, though, the Social Security payroll tax hits only about 84 percent of total income.

It went from 90 percent to 84 percent because a larger and larger portion of total income has gone to the top. In 1983, the richest 1 percent of Americans got 11.6 percent of total income. Today the top 1 percent takes in more than 20 percent.

If we want to go back to 90 percent, the ceiling on income subject to the Social Security tax would need to be raised to $180,000.

Presto. Social Security's long-term (beyond 26 years from now) problem would be solved."
Robert Reich: Budget Baloney: Why Social Security Isn't a Problem for 26 Years, and the Best Way to Fix It Permanently
 
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Okay, Cat, if you want to take this up in the other thread, I'm happy to. However, since I don't believe that making the wealthy pay for everyone's retirement or that using that retirement fund to increase already outrageous spending are good things, I think we will have plenty to talk about there. In fact, I'm interested to see your input since you seem to have some interesting points here.

Simply put, though, FICA is not FIT because it is a forced retirement pyramid scheme that was supposed to pay out what you put into it and used it's initial funding to help those who had not had the chance to pay in. The fact that they've had to raise the cap to keep the pyramid from collapsing does not mean it should suddenly become progressive, it just means the government should never be in charge of money.
 
Okay, Cat, if you want to take this up in the other thread, I'm happy to. However, since I don't believe that making the wealthy pay for everyone's retirement or that using that retirement fund to increase already outrageous spending are good things, I think we will have plenty to talk about there. In fact, I'm interested to see your input since you seem to have some interesting points here.

Simply put, though, FICA is not FIT because it is a forced retirement pyramid scheme that was supposed to pay out what you put into it and used it's initial funding to help those who had not had the chance to pay in. The fact that they've had to raise the cap to keep the pyramid from collapsing does not mean it should suddenly become progressive, it just means the government should never be in charge of money.

Since payroll taxes are a factor in Romney paying a lower effective rate on his federal taxes, this thread is exactly the right place to discuss this. The greater good is higher priority than your personal preference.

No one has claimed that FICA is FIT, but is part of the effective federal taxes everyone pays.
 
Since payroll taxes are a factor in Romney paying a lower effective rate on his federal taxes, this thread is exactly the right place to discuss this. The greater good is higher priority than your personal preference.

No one has claimed that FICA is FIT, but is part of the effective federal taxes everyone pays.

and since FICA is not intended to be progressive trying to claim it makes the FIT system less progressive is dishonest
 
and since FICA is not intended to be progressive trying to claim it makes the FIT system less progressive is dishonest

FICA is suppose to be funded so that it is self sufficient, that is the point. As stated before:

"Today, the richest 1 percent of Americans take home over 20 percent of the nation’s total income, almost twice as much as they did in 1983. And, thanks to the ceiling—currently set at $106,800—they pay no Social Security tax on most of what they make. As a result, the Social Security payroll tax now touches only 84 percent of the nation’s income, down from 91 percent in 1983. Lifting the cap to $180,000 would close that 7 percent gap."
 
FICA is suppose to be funded so that it is self sufficient, that is the point. As stated before:

"Today, the richest 1 percent of Americans take home over 20 percent of the nation’s total income, almost twice as much as they did in 1983. And, thanks to the ceiling—currently set at $106,800—they pay no Social Security tax on most of what they make. As a result, the Social Security payroll tax now touches only 84 percent of the nation’s income, down from 91 percent in 1983. Lifting the cap to $180,000 would close that 7 percent gap."

wow that is some serious ink spewing in a squid like evasion. The top one percent make 22 percent of the income but pay almost 40% of the income tax (federal) and when you add in the death tax its over 40% and guess what

that means those evil one percenters are the ONLY GROUP That pays MORE OF THE INCOME TAX BURDEN than their share of the INCOME
 
Since payroll taxes are a factor in Romney paying a lower effective rate on his federal taxes, this thread is exactly the right place to discuss this. The greater good is higher priority than your personal preference.

No one has claimed that FICA is FIT, but is part of the effective federal taxes everyone pays.

Trying to include it with FIT is misleading at best. It is not a progressive tax for the reasons stated. It is not a tax. It is a loan to the government who has severely mishandled the money they confiscated. The "greater good" is not served by trying to throw oranges in when you are counting apples.

The reason I keep pointing to the other thread is that it was designed to discuss the distinctions here. I'll be the first to admit that the government took a higher percentage of your income to "hold" for you until you retire, but I won't throw it in when discussing the already progressive tax rates. They are separate entities.

This is not my personal preference. This is asking to count apples and oranges separately as they are not the same thing.
 
wow that is some serious ink spewing in a squid like evasion. The top one percent make 22 percent of the income but pay almost 40% of the income tax (federal) and when you add in the death tax its over 40% and guess what

that means those evil one percenters are the ONLY GROUP That pays MORE OF THE INCOME TAX BURDEN than their share of the INCOME

Once again you ignore payroll taxes, the middle class is aware that they have to pay FICA taxes on their entire income, whereas the rich that make their income primarily from investments like Romney, who only had to pay payroll tax on one-tenth of 1% of his income.

40% of federal revenues come from payroll taxes for which the working class pay 90%.
 
Once again you ignore payroll taxes, the middle class is aware that they have to pay FICA taxes on their entire income, whereas the rich that make their income primarily from investments like Romney who only had to pay payroll tax on one-tenth of 1% of his income.

40% of federal revenues come from payroll taxes for which the working class pay 90%.

the income tax is plenty progressive. trying to argue it should be more progressive based on the inclusion of a non-progressive tax is blatantly dishonest
 
"Payroll Taxes
Basic Information for Employers" (and for those that think they are not a tax)
Payroll Taxes: Basic Information for All Employers

Okay, fair enough. I'll give you the semantics, but that doesn't change the incredible difference between FICA and FIT and why they should definitely not be mixed.

SS is still not a fund to cover other social programs and is not designed to supplement social or military spending.
Any money spent from SS is just a hidden new debt the government has created from overspending.
FICA was never intended to be progressive as it is not a part of FIT and supposedly gives you a return based on your investment.
SS is a forced retirement account. If you make more than the 106k cap, then you probably don't need more help with your retirement. Or are you worried about Romney's future?

We are talking about two distinctly different beasts.
 
Okay, fair enough. I'll give you the semantics, but that doesn't change the incredible difference between FICA and FIT and why they should definitely not be mixed.

They have been mixed since 1969 when SS funds were put into, and were spent from, the general fund. When they are unmixed, then you will have a valid point.
 
They have been mixed since 1969 when SS funds were put into, and were spent from, the general fund. When they are unmixed, then you will have a valid point.

I think you are referring to the Johnson administration putting the SS fund "on-budget" or showing it as part of the total holdings of the government. This was not a change in how the spending was handled in 1969. Additionally, this was changed in 1990 when it was taken "off-budget" again.

Social Security History FAQs Internet Myths II
 
I think you are referring to the Johnson administration putting the SS fund "on-budget" or showing it as part of the total holdings of the government. This was not a change in how the spending was handled in 1969. Additionally, this was changed in 1990 when it was taken "off-budget" again.

Social Security History FAQs Internet Myths II

From your source:

"This means only that they are shown as a separate account in the federal budget."

We should have listened to Gore:

"When Al Gore was running for President in 2000, one of the linchpins of his campaign was that he would take the entitlement trust funds and put them in a "lock box," thus preventing Congress from raiding the funds to pay for its pet projects at the expense of future generations. He was routinely ridiculed by the vast right wing noise machine for this idea. With his defeat, the idea of protecting the trust fund went out the window and as we all know, the Republican Congress treated it like a free lunch, eating away at our future in order to avoid raising taxes on the wealthy."
http://www.dailykos.com/story/2011/07/15/994921/-Al-Gore-was-Right-We-DID-Need-a-Lockbox
 
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Yep ... I provide healthcare and work about 50+ hours a week. My income is close to 200K ... I pay 38 % of my income in federal taxes and if you add up all my taxes I pay slighter more than 50% of my income in taxes.

I have two children (tuition/healthcare) etc and another family member connection I help financially due to health issues.

The republican candidates tax policies disrespects people like me ... middle American chump working my ass off.

Warren Buffet is right on target.
 
From your source:

"This means only that they are shown as a separate account in the federal budget."

We should have listened to Gore:

"When Al Gore was running for President in 2000, one of the linchpins of his campaign was that he would take the entitlement trust funds and put them in a "lock box," thus preventing Congress from raiding the funds to pay for its pet projects at the expense of future generations. He was routinely ridiculed by the vast right wing noise machine for this idea. With his defeat, the idea of protecting the trust fund went out the window and as we all know, the Republican Congress treated it like a free lunch, eating away at our future in order to avoid raising taxes on the wealthy."
Daily Kos: Al Gore was Right -- We DID Need a Lockbox

So the spending did not change in 1969 or again when that was reversed. It is supposedly a retirement program. But hey, I'm all for dropping or fixing SS. I'm just not for pretending it's the same as FIT or goes to the same places or should be progressive like FIT.

Show me a candidate ready to fix the debt spending the government is doing and I'll happily take a look. Show me any one ready to take on the mess that is SS and I'll take a look.

FICA is not FIT and any money spent out of it is a debt the government isn't admitting to because of overspending.


This is why JS bores me. He wants to make fun of Romney for having money. I'm sure JS really understands the plight of the middle class.
 
Yep ... I provide healthcare and work about 50+ hours a week. My income is close to 200K ... I pay 38 % of my income in federal taxes and if you add up all my taxes I pay slighter more than 50% of my income in taxes.

I have two children (tuition/healthcare) etc and another family member connection I help financially due to health issues.

The republican candidates tax policies disrespects people like me ... middle American chump working my ass off.

Warren Buffet is right on target.

Actually, with three dependents that you mentioned, an income of 200k pays 22% in FIT after standard deductions, which don't include the tuition and healthcare deductions. I also assumed you were single, since you didn't mention otherwise. You are absolutely in the top 3% and fall in the rare exception who have a higher rate than Romney, however.

Even if you pretend FICA counts as FIT and add the maximum (which you hit at 106k) and apply both sides to your paycheck (making it 8.4 instead of 4.2), you end up with an additional 4.4%.

Let's look at it. 22% FIT, 4.4% FICA. That puts you at 26.4% federal taxes. Are you saying your state has a tax rate of 23.6%?? Where do you live? I won't be going there.

I also hate to be the one to tell you, but President Obama isn't out there fixing things for people in the 200k pay range. Right now, he's pushing for more taxes on people wealthier than you, but not with the intent of lowering your taxes. He just wants to cover a bit more of the incredible spending habit government can't seem to break.

Unfortunately, neither party is looking out for you.
 
Yep ... I provide healthcare and work about 50+ hours a week. My income is close to 200K ... I pay 38 % of my income in federal taxes and if you add up all my taxes I pay slighter more than 50% of my income in taxes.

I have two children (tuition/healthcare) etc and another family member connection I help financially due to health issues.

The republican candidates tax policies disrespects people like me ... middle American chump working my ass off.

Warren Buffet is right on target.

so you think Obama respects you more by wanting to tax you even more

that is idiotic. and if you do what my grandparents did-save as much as they could and invest it, the dems want to tax what you derive from that investment at a rate at least as twice as high as it is now taxed.

rather than complaining rightfully that your earned income is taxed too much because too many people want to much government and the politicians don't want to tax those masses for what they want, you seem envious of those who have investment income even though dividends are currently taxed at 45% and dems want to tax it at over 60%
 
Actually, with three dependents that you mentioned, an income of 200k pays 22% in FIT after standard deductions, which don't include the tuition and healthcare deductions. I also assumed you were single, since you didn't mention otherwise. You are absolutely in the top 3% and fall in the rare exception who have a higher rate than Romney, however.

Even if you pretend FICA counts as FIT and add the maximum (which you hit at 106k) and apply both sides to your paycheck (making it 8.4 instead of 4.2), you end up with an additional 4.4%.

Let's look at it. 22% FIT, 4.4% FICA. That puts you at 26.4% federal taxes. Are you saying your state has a tax rate of 23.6%?? Where do you live? I won't be going there.

I also hate to be the one to tell you, but President Obama isn't out there fixing things for people in the 200k pay range. Right now, he's pushing for more taxes on people wealthier than you, but not with the intent of lowering your taxes. He just wants to cover a bit more of the incredible spending habit government can't seem to break.

Unfortunately, neither party is looking out for you.

The GOP might not be as helpful as it should be but its the dems that want to tax her more and more and more
 
Yep ... I provide healthcare and work about 50+ hours a week. My income is close to 200K ... I pay 38 % of my income in federal taxes and if you add up all my taxes I pay slighter more than 50% of my income in taxes.

I have two children (tuition/healthcare) etc and another family member connection I help financially due to health issues.

The republican candidates tax policies disrespects people like me ... middle American chump working my ass off.

Warren Buffet is right on target.

I don't know how you're figuring your taxes, my friend, but I'd suggest you get a new tax preparer. Seriously.

$190,000 earnings; 4 dependants claimed; $18,000 mortgage interest tax deduction [estimated] = Effective tax rate for Federal income taxes: 18.53%. Add SS/Medicare onto that and you've got, this year, 22.73%. (If you looked at Line 60 of your income tax return, you should see a number somewhere around $35,000, assuming your income is around $190,000. If you have other deductions, it would be less.)

Marginal Tax Rate Calculator
 
Romney's marginal rate is 35%.

what sorts of deduction is he using to make his effective rate half as much?
 
I don't know how you're figuring your taxes, my friend, but I'd suggest you get a new tax preparer. Seriously.

$190,000 earnings; 4 dependants claimed; $18,000 mortgage interest tax deduction [estimated] = Effective tax rate for Federal income taxes: 18.53%. Add SS/Medicare onto that and you've got, this year, 22.73%. (If you looked at Line 60 of your income tax return, you should see a number somewhere around $35,000, assuming your income is around $190,000. If you have other deductions, it would be less.)

Marginal Tax Rate Calculator

i don't think he understands how tax brackets work.
 
Romney's marginal rate is 35%.

what sorts of deduction is he using to make his effective rate half as much?

Actually, a lot of his income (by far most) is capital gains which is treated differently and has a marginal rate of 15%. That is a slightly different topic and could be gone into here, but it's covered kind of ad nausea in other threads. We are grouping it with standard income tax because even with that lower marginal rate, his FIT comes out higher than 97% of income earners.

It's not as much about his deductions, but more about where it comes from is the simple answer.
 
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