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

Do the Rich Pay Their Fair Share?

  • Yes

    Votes: 58 48.3%

  • No

    Votes: 62 51.7%
  • Total voters
    120
Canell said:
No. Only a flat tax can give you that.
But then, the tax system is so out of balance (complicated and like a Swiss cheese), so a flat tax per se wouldn't really matter now.
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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? Who will want a flat tax first? rich or not rich?
 
leftofabbie said:
Yes, the top rates are higher, but you're overlooking the fact that the top 10% of America's earners are taking home 50% of America's income. This is much more lopsided than other OECD countries.
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You're going off on a tangent.
 
On the face of it, Romney is just getting by.

With tax loopholes how much does he REALLY pay?

Warren Buffet needs to take a lesson from this. As one of the richest men in the world he states he pays fewer taxes than his assistant. She must make a ton.
 
teamosil said:
People have tried to make the argument you are making in court- that "uniform" means "flat". But that isn't really what it says. What it say is that the federal taxes need to be the same in Delaware as they are in Georgia, which of course they are. We tax every person according to the same tax brackets for wages, the same rules for capital gains, etc.

The amount of benefit somebody draws from society is proportionate to their income. If somebody owns a company with 100 employees, for example, they are drawing benefit from 101 educations, where the employee is only drawing benefit from one. The person with $1 million in investments benefits 1,000 times as much as the person with $1,000 in investments from most bailouts. National security and law enforcement both provide more value the more you have to protect. The richer somebody is, the more stock they own, the more wear and tear they are putting on the roads through those companies, the more pollution they are generating, the more regulatory costs they are creating, etc.

But those are just the benefits they draw directly from the government. All the money they have is drawn from society as a whole obviously. They aren't printing it in their basements on animal skins from animals they killed themselves, they are getting it from transactions with other people. That's the source of their money- society. So, it makes sense that they would pay more to keep that society strong, right?
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Ah, but that same argument, that a citzen making $1,000,000/year is getting 10x the gov't benefits of one that makes $100,000/year would not support taxation at a higher rate at all, that would mean that a "fair" tax is at a FLAT rate. ;-)
 
It's not about the rich being taxed more, so the gov can decide how to waste more of our money it's about the uber-wealthy making too much from using their leverage and influence to imbalance the capitalist system. The best way to spread the wealth is to use the gov to enforce regs and allow more competition, reducing product and service prices, creating more jobs.
 
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? Who will want a flat tax first? rich or not rich?
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That depends. If the AGI basis for FIT, is gross income minus $10K, then the richer (in your example), at the EXACT same tax rate, would pay a much higher percentage of gross income as tax, since the poorer (in your example) will get a 50% break in how much of their gross income is taxable. ;-)
 
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grip said:
It's not about the rich being taxed more, so the gov can decide how to waste more of our money it's about the uber-wealthy making too much from using their leverage and influence to imbalance the capitalist system.
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You have a chicken/egg dilemma in the fact that you have to be wealthy in the first place to be able to corrupt government in your favor, and doing so tends to make those successful at it all the more rich. So it's self-reinforcing.

The best way to spread the wealth is to use the gov to enforce regs and allow more competition, reducing product and service prices, creating more jobs.
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1) If government is beholden to the wealthiest and their corporations, then how exactly do we the people use the government to our own benefit?
2) More competition does not necessarily mean more American jobs. Sometimes this is inversely proportional.
 
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Neomalthusian said:
You have a chicken/egg dilemma in the fact that you have to be wealthy in the first place to be able to influence government in your favor, and doing so tends to make those successful at it all the more rich. So it's self-reinforcing.



1) If government is beholden to the wealthiest and their corporations, then how exactly do we the people use the government to our own benefit?
2) More competition does not necessarily mean more American jobs. Sometimes this is inversely proportional.
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True. It's very hard to uncorrupt the system but threatening the politicians by voting in non party affiliates or a public push for campaign and lobbying reform would be a start.

1) People have power in numbers and can boycott companies, use the Press, demonstrate and vote.
2) Trust me my method historically works. Without greedy executive officers doing anything for 1/4 quarterly profits to boost their bonuses and shareholder earnings there are more funds available for everyone.
 
ttwtt78640 said:
Ah, but that same argument, that a citzen making $1,000,000/year is getting 10x the gov't benefits of one that makes $100,000/year would not support taxation at a higher rate at all, that would mean that a "fair" tax is at a FLAT rate. ;-)
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Yeah, that argument takes you from regressive (everybody pays $x) to why it needs to be relative to income. Snake_Plisskin was arguing that everybody draws equal benefits, so they should pay equal taxes or else it is discrimination. My points refute that position, I think, right?

As for progressive taxation, currently we have a system that is moderately progressive up to about $1 million per year, but then sharply regressive after that. If you favor flat taxes, then you are on the "no the rich do not pay their fair share" side, since you would be arguing that we should increase their tax rates. Flat taxes are more progressive than what we have now at least with regards to the rich.

But, IMO we should go beyond that to actual progressive taxation. The chief argument is the diminishing marginal utility of wealth. Every dollar a person makes has slightly less value to them than the previous dollar. Makes sense, right? If you get $1,000 you'll spend it on the thing you need the very most. If you get another $1,000, you'll spend it on the thing you need next most. By the 100th $1,000, you're spending it on things that are far less important to you than the things you spent that first $1,000 on. Once you get up to billionaire level, each dollar has so little value that even a million wouldn't even be noticed. So, to maximize the utility of wealth, you want it to be less concentrated. That doesn't mean it should be like equally distributed or something, but you need to balance that waste due to concentration against the desire to create incentives for success and whatnot. Progressive taxation is a good way to strike that balance.

IMO that is the strongest argument for progressive taxation, but there are many. Another is that you need consumer spending to drive the economy. Ever since we started these tax policies that radically over concentrate our nation's wealth in very few pockets, our consumer spending has been growing at a lackluster pace and that prevents our economy from really taking off. Another is the obvious moral concerns with people who don't even work or do anything useful getting roughly 1/4 of all the wealth generated by all the working people while many of those people who are actually doing the work are barely able to provide for their families.
 
The poll should include TWO choices for NO, one that says "NO, they pay too much" and another that says "NO, they pay too little", YES is self explanitory, that the current tax system is just and fair. ;-)
 
grip said:
True. It's very hard to uncorrupt the system but threatening the politicians by voting in non party affiliates or a public push for campaign and lobbying reform would be a start.

1) People have power in numbers and can boycott companies, use the Press, demonstrate and vote.
2) Trust me my method historically works. Without greedy executive officers doing anything for 1/4 quarterly profits to boost their bonuses and shareholder earnings there are more funds available for everyone.
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The bolded seems all but forgotten.
 
Neomalthusian said:
The bolded seems all but forgotten.
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Divide and conquer my man they've learned it well by selling knee jerk emotional issues to keep us separated and weak. Only one thing will ultimately get everyone's attention and on the same team, wait till they get into our pockets a little deeper. When enough of us become paupers and peons you'll see an uprising of furious dirty faces.
 
teamosil said:
Yeah, that argument takes you from regressive (everybody pays $x) to why it needs to be relative to income. Snake_Plisskin was arguing that everybody draws equal benefits, so they should pay equal taxes or else it is discrimination. My points refute that position, I think, right?

As for progressive taxation, currently we have a system that is moderately progressive up to about $1 million per year, but then sharply regressive after that. If you favor flat taxes, then you are on the "no the rich do not pay their fair share" side, since you would be arguing that we should increase their tax rates. Flat taxes are more progressive than what we have now at least with regards to the rich.

But, IMO we should go beyond that to actual progressive taxation. The chief argument is the diminishing marginal utility of wealth. Every dollar a person makes has slightly less value to them than the previous dollar. Makes sense, right? If you get $1,000 you'll spend it on the thing you need the very most. If you get another $1,000, you'll spend it on the thing you need next most. By the 100th $1,000, you're spending it on things that are far less important to you than the things you spent that first $1,000 on. Once you get up to billionaire level, each dollar has so little value that even a million wouldn't even be noticed. So, to maximize the utility of wealth, you want it to be less concentrated. That doesn't mean it should be like equally distributed or something, but you need to balance that waste due to concentration against the desire to create incentives for success and whatnot. Progressive taxation is a good way to strike that balance.

IMO that is the strongest argument for progressive taxation, but there are many. Another is that you need consumer spending to drive the economy. Ever since we started these tax policies that radically over concentrate our nation's wealth in very few pockets, our consumer spending has been growing at a lackluster pace and that prevents our economy from really taking off. Another is the obvious moral concerns with people who don't even work or do anything useful getting roughly 1/4 of all the wealth generated by all the working people while many of those people who are actually doing the work are barely able to provide for their families.
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WOW, thats quite a load. I think that we are in basic agreement. That the rich should pay taxes both in a higher amount and at a higher rate based on GROSS income. Where I seem to disagree, with most, is how to do that. Rather than have a complex scheme for determining AGI for income (using all sorts of deductions and credits) I would prefer a using single number for a "standard deduction", say $10K.

All income beyond that is taxed at a single flat rate. Example: Citizen A makes $20K/year and citizen B makes $100K/year. Using a tax rate of 20%, citizen A then owes $2K in taxes or 10% of their gross income, while citzen B then owes $18K in taxes or 18% of their gross income.

Taxation can still be quite "progressive" using a flat rate, you just have to view taxation relative to basic gross income, not some "marginal rate" nonsense and having a huge array of complexity in the tax code.
 
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ttwtt78640 said:
WOW, thats quite a load. I think that we are in basic agreement. That the rich should pay taxes both in a higher amount and at a higher rate based on GROSS income. Where I seem to disagree, with most, is how to do that. Rather than have a complex scheme for determining AGI for income (using all sorts of deductions and credits) I would prefer a using single number for a "standard deduction", say $10K.

All income beyond that is taxed at a single flat rate. Example: Citizen A makes $20K/year and citizen B makes $100K/year. Using a tax rate of 20%, citizen A then owes $2K in taxes or 10% of their gross income, while citzen B then owes $18K in taxes or 18% of their gross income.

Taxation can still be quite "progressive" using a flat rate, you just have to view taxation relative to basic gross income, not some "marginal rate" nonsense and having a huge array of complexity in the tax code.
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If by "all income" you really mean ALL sources of income, then that isn't a terrible plan. I'd go further, but that would be a huge step in the right direction. It's the huge exemptions for inheritance income and the radically lower rates for investment income that are the biggest issue though, not deductions on income taxes on wages.
 
ttwtt78640 said:
WOW, thats quite a load. I think that we are in basic agreement. That the rich should pay taxes both in a higher amount and at a higher rate based on GROSS income. Where I seem to disagree, with most, is how to do that. Rather than have a complex scheme for determining AGI for income (using all sorts of deductions and credits) I would prefer a using single number for a "standard deduction", say $10K.

All income beyond that is taxed at a single flat rate. Example: Citizen A makes $20K/year and citizen B makes $100K/year. Using a tax rate of 20%, citizen A then owes $2K in taxes or 10% of their gross income, while citzen B then owes $18K in taxes or 18% of their gross income.

Taxation can still be quite "progressive" using a flat rate, you just have to view taxation relative to basic gross income, not some "marginal rate" nonsense and having a huge array of complexity in the tax code.
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This would be my preferred solution as well. Every household gets a single cost of living deduction based on some percentage of the poverty level (say 150%) for their family size (and probably where they live since cost of living varies around the country) and pays a flat percentage on everything after that. And that would apply to everything. There would be no special taxes for estates, or for capital gains. All of it would be taxed as income.

Is that too simple to actually work in the real world? Probably. But I think starting with that as a basis and adding the bare minimum of complications necessary to make it work in reality would be better than trying to fix the god-awful complicated pile of crap tax code that we have now.
 
A couple of questions for you all. 1. How many of you are in buisiness or run one and see all the numbers? 2. If you were stuck being misable, would you rather be poor or wealthy? I am not flaming or trolling I just need to see how I should frame my next comments. Thnx. Cheers.:cool:
 
teamosil said:
If by "all income" you really mean ALL sources of income, then that isn't a terrible plan. I'd go further, but that would be a huge step in the right direction. It's the huge exemptions for inheritance income and the radically lower rates for investment income that are the biggest issue though, not deductions on income taxes on wages.
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Gifts and inheritance are not income.

Also a good thing to keep in mind that unrealized gains are also not income and cannot be taxable. For many, a great deal of the net worth is unrealized, and they still technically stand to lose insane amounts of money in their investments--which they have not yet cashed in for a profit--if they head south.

But as far as capital gains tax, the cat is out of the bag. How do you re-jack the CG tax rate without discincentivizing domestic investment?
 
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There is no such thing as fair share so I didn't vote in the poll.
 
Neomalthusian said:
Gifts and inheritance are not income.
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What is the practical difference between them that necessitates a separate tax rate? In the US, for the most part, people are taxed when they receive money. Either from an inheritance, from wages for work performed, or from return on investments. I've yet to hear a good argument why those things should be treated differently, when it would be much simpler to treat them all the same.

Now there are some exceptions. For example inheriting a family business, or a farm, or land, should not be treated the same as inheriting money (unless it's immediately sold off for cash). Which is why I said my preferred tax structure is probably a little too simple to work in the real world.
 
Neomalthusian said:
Gifts and inheritance are not income.
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Of course they are. Why wouldn't they be?

Neomalthusian said:
But as far as capital gains tax, the cat is out of the bag. How do you re-jack the CG tax rate without discincentivizing domestic investment?
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It doesn't matter where somebody invests, it is still taxed the same whether it is invested domestically or internationally. Regardless of where you invest, if you live in the US, you have to pay taxes here. Now, one could argue that people would be more likely to commit tax fraud. IMO we need to ramp the IRS back up to the enforcement power it had pre-Reagan to counter that. Or you could argue that rich people will move out of the US, but they would pay more in any first world country and most third world countries, so that doesn't work either.

But, regardless, it's kind of a meaningless distinction these days. Pretty much every publicly traded company operates in many countries. The distinction between domestic investment and international investment is something of an illusion.
 
teamosil said:
If by "all income" you really mean ALL sources of income, then that isn't a terrible plan. I'd go further, but that would be a huge step in the right direction. It's the huge exemptions for inheritance income and the radically lower rates for investment income that are the biggest issue though, not deductions on income taxes on wages.
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That gets us deep into the accounting swamp. But I will attempt to go there with you for a bit. Obviously, for all except wage income, accounting is required to determine what the "income" is. For a business that is basically "sales minus cost of sales equals income", the devil being in those details of what is, and is not, a legitimate "cost of sales" item. As for inheritance, that is NOT income, as it must have been ALREADY taxed as income by whoever is leaving it (and much of it is passed on as non-cash assets, like a home, family farm or business). As for capital gains, interest and dividend (investment) income, that is a tricky point indeed. It can only be made by investing a portion of your "income", that has already been taxed, so it too, could be left tax free and still be "fair". I am willing to "trade" here.

I would prefer that corporate income, not be taxed (at all) since a corporation is NOT a person (citizen) that can vote, so that creates both taxation without representation and leads (as we all know) to politcal favors (corrupton?) used to alter corporate taxation laws and drive many of them (and their jobs) off-shore. The "trade" I offer, for excuding corporate income from taxation, is this; tax all "investment" income at 1/2 the rate of wage income, by simply adding HALF of investment income to each individual's total income, and then tax that total.
 
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teamosil said:
Of course they are. Why wouldn't they be?
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Because income is something you earn by trading one thing for another (e.g. through work or investments).

It doesn't matter where somebody invests, it is still taxed the same whether it is invested domestically or internationally. Regardless of where you invest, if you live in the US, you have to pay taxes here.
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Then why not tax the **** out of it, say 90%? After all, if you're investing it, you ought not really "need" it in any immediate sense, so have government take it. Taxing CGs is essentially without consequence, according to your analysis.

Or you could argue that rich people will move out of the US, but they would pay more in any first world country and most third world countries, so that doesn't work either.
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Are you sure? It certainly appears to be working for some.
 
If you pay any taxes you pay more than your fair share. True story.
 
ttwtt78640 said:
That gets us deep into the accounting swamp. But I will attempt to go there with you for a bit. Obviously, for all except wage income, accounting is required to determine what the "income" is. For a business that is basically "sales minus cost of sales equals income", the devil being in those details of what is, and is not, a legitimate "cost of sales" item. As for inheritance, that is NOT income, as it must have been ALREADY taxed as income by whoever is leaving it (and much of it is passed on as non-cash assets, like a home, family farm or business). As for capital gains, interest and dividend (investment) income, that is a tricky point indeed. It can only be made by investing a portion of your "income", that has already been taxed, so it too, could be left tax free and still be "fair".
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The argument that inheritance and capital gains shouldn't be taxed as income because they already have been once doesn't really fly. Earned income has been taxed as income before too, just a little more indirectly. For example, I earn money at work, and pay taxes on that income. Then later I go buy some groceries, and with some of the money I spent on groceries, the grocery store pays their employees, who also have to pay taxes on that money. Would you argue that the people working at the grocery store shouldn't have to pay income taxes on their wages because that money has already been taxed as income once?
 
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