(The Truth Behind Right-wing claims): Yes, 47% of Households Owe No Taxes. Look Closer.

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    Apr 14, 2010 9:56 PM GMT
    Yes, 47% of Households Owe No Taxes. Look Closer.
    By DAVID LEONHARDT

    Forty-seven percent.

    That’s the portion of American households that owe no income tax for 2009. The number is up from 38 percent in 2007, and it has become a popular talking point on cable television and talk radio. With Tax Day coming on Thursday, 47 percent has become shorthand for the notion that the wealthy face a much higher tax burden than they once did while growing numbers of Americans are effectively on the dole.

    Neither one of those ideas is true. They rely on a cleverly selective reading of the facts. So does the 47 percent number.


    Given that taxes are likely to be one of the big political issues of the next few years — and maybe the biggest one — it’s worth understanding who really pays what in taxes. Once you do, you can get a sense for our country’s fiscal options. How, in other words, will we be able to close the huge looming gap between the taxes we are scheduled to pay and the services we are scheduled to receive?

    The answer is that tax rates almost certainly have to rise more on the affluent than on other groups. Over the last 30 years, rates have fallen more for the wealthy, and especially the very wealthy, than for any other group. At the same time, their incomes have soared, and the incomes of most workers have grown only moderately faster than inflation.

    So a much greater share of income is now concentrated at the top of distribution, while each dollar there is taxed less than it once was. It’s true that raising taxes on the rich alone can’t come close to solving the long-term budget problem. The deficit is simply too big. But if taxes are not increased for the wealthy, the country will be left with two options.

    It will have to raise taxes even more than it otherwise would on everybody else. Or it will have to find deep cuts in Medicare, Social Security, military spending and the other large (generally popular) federal programs.

    All the attention being showered on “47 percent” is ultimately a distraction from that reality.

    The 47 percent number is not wrong. The stimulus programs of the last two years — the first one signed by President George W. Bush, the second and larger one by President Obama — have increased the number of households that receive enough of a tax credit to wipe out their federal income tax liability.

    But the modifiers here — federal and income — are important. Income taxes aren’t the only kind of federal taxes that people pay. There are also payroll taxes and investment taxes, among others. And, of course, people pay state and local taxes, too.

    Even if the discussion is restricted to federal taxes (for which the statistics are better), a vast majority of households end up paying federal taxes. Congressional Budget Office data suggests that, at most, about 10 percent of all households pay no net federal taxes. The number 10 is obviously a lot smaller than 47.

    The reason is that poor families generally pay more in payroll taxes than they receive through benefits like the Earned Income Tax Credit. It’s not just poor families for whom the payroll tax is a big deal, either. About three-quarters of all American households pay more in payroll taxes, which go toward Medicare and Social Security, than in income taxes.

    Focusing on the statistical middle class — the middle 20 percent of households, as ranked by income — underlines this point. Households in this group made $35,400 to $52,100 in 2006, the last year for which the Congressional Budget Office has released data. That would describe a household with one full-time worker earning about $17 to $25 an hour. Such hourly pay is typical for firefighters, preschool teachers, computer support specialists, farmers, members of the clergy, mail carriers, secretaries and truck drivers, according to the Bureau of Labor Statistics.

    Taking into account both taxes and tax credits, the average household in this group paid a total income tax rate of just 3 percent. A good number of people, in fact, paid no net income taxes. They are among the alleged free riders.

    But the picture starts to change when you look not just at income taxes but at all taxes. This average household would have paid 0.8 percent of its income in corporate taxes (through the stocks it owned), 0.9 percent in gas and other federal excise taxes, and 9.5 percent in payroll taxes. Add these up, and the family’s total federal tax rate was 14.2 percent.

    I realize that it’s possible to argue that payroll taxes should be excluded from the discussion because they pay for benefits — Social Security and Medicare — that people receive on the back end. But that argument doesn’t seem very persuasive.

    Why? People do not receive benefits equal to the payroll taxes they paid. Those who die at age 70 will receive much less in Social Security and Medicare than they paid in taxes. Those who die at 95 will probably get much more.

    The different kinds of federal taxes are really just accounting categories. At the end of the day, the government has to cover the cost of all its operations with revenue from all its taxes. We can’t wish our deficit away by saying that it’s mostly a Medicare and Social Security deficit.

    If anything, the government numbers I’m using here exaggerate how much of the tax burden falls on the wealthy. These numbers fail to account for the income that is hidden from tax collectors — a practice, research shows, that is more common among affluent families. “Because higher-income people are understating their income,” Joel Slemrod, a tax scholar at the University of Michigan, says, “We’ve been overstating their average tax rates.”

    State and local taxes, meanwhile, may actually be regressive. That is, middle-class and poor families may face higher tax rates than the wealthy. As Kim Rueben of the Tax Policy Center notes, state and local income taxes and property taxes are less progressive than federal taxes, while sales taxes end up being regressive. The typical family pays a lot of state and local taxes, too — almost half as much as in federal taxes.

    There is no question that the wealthy pay a higher overall tax rate than any other group. That is an American tradition. But there is also no question that their tax rates have fallen more than any other group’s over the last three decades. The only reason they are paying more taxes than in the past is that their pretax incomes have risen so rapidly — which hardly seems a great rationale for a further tax cut.

    So why are those radio and television talk show hosts spending so much time arguing that today’s wealthy are unfairly burdened? Well, it’s hard not to notice that the talk show hosts themselves tend to be among the very wealthy.


    No doubt, like the rest of us, they don’t particularly enjoy paying taxes. They are happy with the tax cuts they have received lately. They would prefer if other people had to pick up the bill for Medicare, Social Security and the military — people like, say, firefighters, preschool teachers, computer support specialists, farmers, members of the clergy, mail carriers, secretaries and truck drivers.
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    Apr 14, 2010 11:10 PM GMT
    Tax reform is something needing serious discussion the world over... it brings up questions of who contributes, who can bleed, why and how they want to bleed.

    Billionaires can bleed more for instance. But will they move away? Would that be greed? Should a tax reform reflect how people act selfishly? Or will it reconcile that neither person nor property has been unequal for millenia and as such to create a better world where human beings are truly valued, will adjustments in who should make what be made?

    Should it be in conjunction with a free market system that can truly let those who dare prosper to do so and those who would gobble up small enterprises from doing so?

    So it's also a question of economic philosophy as well.




    But moreover the interesting thing is that even Al Capone got nailed on taxes... not murder or extortion or nothing, but tax evasion... That's something to think about.
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    Apr 14, 2010 11:12 PM GMT
    southbeach1500 saidI believe I've always made it clear that I'm talking about federal income taxes. But with so many discussions on this topic here, I suppose you can find someplace where I either didn't use "federal" or "income" or "federal income."

    But the truth remains the truth. 47% of households pay no federal income tax.


    Right. But what this article points to is what an illusory statistic that is. If the wealthiest Americans have a) seen their incomes skyrocket over the past three decades AND b) had their taxes markedly reduced at the same time, why the incessant whining?
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    Apr 14, 2010 11:57 PM GMT
    Christian73 said
    southbeach1500 saidI believe I've always made it clear that I'm talking about federal income taxes. But with so many discussions on this topic here, I suppose you can find someplace where I either didn't use "federal" or "income" or "federal income."

    But the truth remains the truth. 47% of households pay no federal income tax.


    Right. But what this article points to is what an illusory statistic that is. If the wealthiest Americans have a) seen their incomes skyrocket over the past three decades AND b) had their taxes markedly reduced at the same time, why the incessant whining?


    You really don't get it, do you ?
    Many of the peopel who fall in the "wealthiest American" class are small business owners who can least afford the tax increases. Keep increasing the taxes on the people who move the economy and pretty soon they move to a better economy! When the small businesses don't expand and we have a perminant high unemployment rate and a stagnant economy, then , ask yourself "why the incessant whining" !

    http://www.ncpa.org/pub/ba671
  • calibro

    Posts: 8888

    Apr 15, 2010 12:56 AM GMT
    southbeach1500 said
    Christian73 saidIf the wealthiest Americans have a) seen their incomes skyrocket over the past three decades AND b) had their taxes markedly reduced at the same time, why the incessant whining?


    Because 47% of the households in the USA are getting the same benefits (and more) from the Federal government as the 53% of households that DO pay federal income tax.

    How about, just to give this a semblance of fairness, every citizen over 18 who was employed for 180 days or more in the previous year, and who would currently fall in the "pays no income tax" category, pay an "Alternative Minimum Income Tax" of $100.

    It's a symbolic gesture, but at least it's something.


    Umm... that neglects the fact that taxes are supposed to relative to earned income. If someone earns 15,000 a year and is forced to pay 100 dollars that is not the same as someone who theoretically makes 150,000 a year and pays 1,000. Even though they are proportional, the actual means and impact of the costs are very different.
  • calibro

    Posts: 8888

    Apr 15, 2010 1:02 AM GMT
    shybuffguy said
    Christian73 said
    southbeach1500 saidI believe I've always made it clear that I'm talking about federal income taxes. But with so many discussions on this topic here, I suppose you can find someplace where I either didn't use "federal" or "income" or "federal income."

    But the truth remains the truth. 47% of households pay no federal income tax.


    Right. But what this article points to is what an illusory statistic that is. If the wealthiest Americans have a) seen their incomes skyrocket over the past three decades AND b) had their taxes markedly reduced at the same time, why the incessant whining?


    You really don't get it, do you ?
    Many of the peopel who fall in the "wealthiest American" class are small business owners who can least afford the tax increases. Keep increasing the taxes on the people who move the economy and pretty soon they move to a better economy! When the small businesses don't expand and we have a perminant high unemployment rate and a stagnant economy, then , ask yourself "why the incessant whining" !

    http://www.ncpa.org/pub/ba671


    If you're earning more than 200K a year, then I'm sorry because I fail to see how the 3.8 taxing is destructive, How is it that paying that percentage in comparison to the amount of money generated is actually hurting the economy and small businesses? I'm not saying 7,500 dollars isn't a lot of money, but it seems incorrect to assume that cost is preventing business expansion, especially when they US operated with much higher tax rates that lead to job expansion.
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    Apr 15, 2010 1:07 AM GMT
    I paid 41% on my flips this tax year as a single person. This includes federal,state,local,transfer stamps,etc. 41% is insanely high and i dont see myself as rich. I live good but i also make sacrifices with my car (110k miles 2003), low end electronics, i make my own food, buy a ton of stuff at the Dollar Store (cleaning products...stuff like that), 75% of my clothes come from clearance,etc.

    So in my case for anyone to say only the rich get screwed with taxes just blows me away. We need a complete overhaul of our taxing system.


    under $15k pays 0.2%
    $15-$30K pays 5.5%
    $50k-$100k pays 18.1%
    $100k-$200k pays 22.7%
    $200k-$250k pays 5.6%
    $250k and above pays 46%


    66% Say America Is Overtaxed
    Sunday, April 11, 2010
    When thinking about all the services provided by federal, state and local governments, 75% of voters nationwide say the average American should pay no more than 20% of their income in taxes. However, the latest Rasmussen Reports national telephone survey finds that most voters (55%) believe the average American actually pays 30% or more of their income in taxes.

    Sixty-six percent (66%) believe that America is overtaxed. Only 25% disagree.

    Lower income voters are more likely than others to believe the nation is overtaxed.

    Not surprisingly, the tax issue provokes a wide gap between the Political Class and Mainstream Americans. Eighty-one percent (81%) of Mainstream American voters believe the nation is overtaxed, while 74% of those in the Political Class disagree (see more about the Political Class and Mainstream Americans).

    Eighty-one percent (81%) of Republicans believe the nation is overtaxed. So do 73% of voters not affiliated with either major party. Democrats are evenly divided on the question.

    Among those who consider themselves part of the Tea Party movement, 96% believe the nation is overtaxed, and only one percent (1%) disagree.

    These figures help explain why candidate Barack Obama promised to cut taxes for 95% of all Americans during Election 2008. Shortly after the election, Scott Rasmussen wrote a Wall Street Journal column noting how Obama won the White House by campaigning like Ronald Reagan. Currently, only eight percent (8%) believe their taxes will be cut during the Obama presidency, while 46% expect a tax hike.

    (Want a free daily e-mail update? If it's in the news, it's in our polls). Rasmussen Reports updates are also available on Twitter or Facebook.

    According to Fiscal 2011 federal budget documents, taxes paid to federal, state and local governments totaled 25% of GDP in 2009. Total government spending totaled 36% of GDP.

    Forty-three percent (43%) of voters believe that the average American should pay about 10% of their income in taxes in exchange for the services provided by the government.

    In Fiscal Year 2009, 50% of all federal spending went to national defense, Social Security and Medicare. When the cost of veterans affairs are included, that number grows to 53%. Five percent (5%) paid interest on the federal debt, and 42% was used for everything else in the budget.

    However, only 35% of voters believe that the majority of federal spending goes to just defense, Social Security and Medicare.

    Forty-four percent (44%) say it’s not true, and 20% are not sure.

    “These figures highlight a massive failure of leadership from both Republicans and Democrats among the nation’s political elite,” Rasmussen says. “Given the amount of political chatter about the budget in recent years, it is almost beyond comprehension that neither party has seen fit to highlight the basics, so that the American people can make reasoned choices on the fundamental issues before them.”

    Rasmussen’s new book, In Search of Self-Governance, has received positive reviews from across the political spectrum and is available at Rasmussen Reports and Amazon.com. If you’d like Scott to speak at your conference or event, contact Premier Speakers Bureau.

    Fifty-two percent (52%) of voters trust Republicans more than Democrats on the issue of taxes. Thirty-four percent (34%) trust Democrats more on the issue. Republicans also are trusted more on health care and the economy.

    Sixty-five percent (65%) believe that the middle class pays a larger share of their income in taxes than the wealthy. A national sales tax remains unpopular, and most oppose ‘sin taxes’ on junk food and soft drinks.

    Just 23% of voters favor a more active government with more services and higher taxes.

    Please sign up for the Rasmussen Reports daily e-mail update (it’s free) or follow us onTwitter or Facebook. Let us keep you up to date with the latest public opinion news.









  • calibro

    Posts: 8888

    Apr 15, 2010 1:12 AM GMT
    southbeach1500 said
    calibro said
    Umm... that neglects the fact that taxes are supposed to relative to earned income. If someone earns 15,000 a year and is forced to pay 100 dollars that is not the same as someone who theoretically makes 150,000 a year and pays 1,000. Even though they are proportional, the actual means and impact of the costs are very different.

    A person who works 180 days a year, and currently qualifies to pay no federal income tax, can certainly afford a once a year payment of $100. That's reality, not theoretical.


    No, you aren't addressing the logic of my argument. Someone who lives off 14,900 dollars is not the same as someone who lives off 149,000. You cannot ignore relative earning scale that affect people's lives. And what if someone in that situation has a kid? You cannot isolate circumstance from your ideas.
  • jock_1

    Posts: 1491

    Apr 15, 2010 1:13 AM GMT
    i have heard alot of talk lately about the flat tax. seems much easier to figure out taking 10 or 20 percent right off the top of yearly income than having to do taxes every year. also seems a more fair way for everyone paying a fair share. i know its a pipe dream of a complete tax overhaul but something has to be done or we will all be taxed to death. now i heard on the radio they want to do a VAT (value added tax) to everything . icon_sad.gificon_rolleyes.gificon_mad.gificon_cry.gif
  • calibro

    Posts: 8888

    Apr 15, 2010 1:15 AM GMT
    PAstud21 saidI paid 41% on my flips this tax year as a single person. This includes federal,state,local,transfer stamps,etc. 41% is insanely high and i dont see myself as rich. I live good but i also make sacrifices with my car (110k miles 2003), low end electronics, i make my own food, buy a ton of stuff at the Dollar Store (cleaning products...stuff like that), 75% of my clothes come from clearance,etc.

    So in my case for anyone to say only the rich get screwed with taxes just blows me away. We need a complete overhaul of our taxing system.


    under $15k pays 0.2%
    $15-$30K pays 5.5%
    $50k-$100k pays 18.1%
    $100k-$200k pays 22.7%
    $200k-$250k pays 5.6%
    $250k and above pays 46%








    But flips aren't technically taxes in the way earnings are taxed.
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    Apr 15, 2010 1:22 AM GMT
    PAStud & SouthBeach -

    Don't you understand what the Right has done for the past 40 years? What Fox continues to do?

    They are paid by rich people (multi-millionaires to billionaires) to make middle class people (and let's face it, earning $200K for a family of four in NYC isn't gonna make you rich) blamed poor people for everything.

    The 56% tax number is a misnomer. The majority of people who earn that much have properties that give them significant deductions, and many have partnerships or S-corps, which means they are taxed as businesses not individual payers.

    That's what Warren Buffett is saying when he says he pay less taxes than his secretary.
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    Apr 15, 2010 1:22 AM GMT
    calibro said
    PAstud21 saidI paid 41% on my flips this tax year as a single person. This includes federal,state,local,transfer stamps,etc. 41% is insanely high and i dont see myself as rich. I live good but i also make sacrifices with my car (110k miles 2003), low end electronics, i make my own food, buy a ton of stuff at the Dollar Store (cleaning products...stuff like that), 75% of my clothes come from clearance,etc.

    So in my case for anyone to say only the rich get screwed with taxes just blows me away. We need a complete overhaul of our taxing system.


    under $15k pays 0.2%
    $15-$30K pays 5.5%
    $50k-$100k pays 18.1%
    $100k-$200k pays 22.7%
    $200k-$250k pays 5.6%
    $250k and above pays 46%








    But flips aren't technically taxes in the way earnings are taxed.


    If you own and flip a property under 12 months it is considered ordinary income. Capital gains come into play after 12 months. Every flip i do i pretty much figure 50% going to taxes, property taxes, interest payments,etc. How depressing b/c i would love to do more and would do more in a heartbeat if the govt. Unfortunately, i guess the govt doesnt want further investment.
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    Apr 15, 2010 1:23 AM GMT
    Christian73 saidPAStud & SouthBeach -

    Don't you understand what the Right has done for the past 40 years? What Fox continues to do?

    They are paid by rich people (multi-millionaires to billionaires) to make middle class people (and let's face it, earning $200K for a family of four in NYC isn't gonna make you rich) blamed poor people for everything.

    The 56% tax number is a misnomer. The majority of people who earn that much have properties that give them significant deductions, and many have partnerships or S-corps, which means they are taxed as businesses not individual payers.

    That's what Warren Buffett is saying when he says he pay less taxes than his secretary.



    Really? Come look at my tax return.
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    Apr 15, 2010 1:23 AM GMT
    calibro said
    southbeach1500 said
    calibro said
    Umm... that neglects the fact that taxes are supposed to relative to earned income. If someone earns 15,000 a year and is forced to pay 100 dollars that is not the same as someone who theoretically makes 150,000 a year and pays 1,000. Even though they are proportional, the actual means and impact of the costs are very different.

    A person who works 180 days a year, and currently qualifies to pay no federal income tax, can certainly afford a once a year payment of $100. That's reality, not theoretical.


    No, you aren't addressing the logic of my argument. Someone who lives off 14,900 dollars is not the same as someone who lives off 149,000. You cannot ignore relative earning scale that affect people's lives. And what if someone in that situation has a kid? You cannot isolate circumstance from your ideas.


    But Calibro, that's they only way they can do it and not have to deal with how amoral their argument is. If you factor in starving children and homeless people, they might feel bad. icon_rolleyes.gif
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    Apr 15, 2010 1:24 AM GMT
    PAstud21 said
    Christian73 saidPAStud & SouthBeach -

    Don't you understand what the Right has done for the past 40 years? What Fox continues to do?

    They are paid by rich people (multi-millionaires to billionaires) to make middle class people (and let's face it, earning $200K for a family of four in NYC isn't gonna make you rich) blamed poor people for everything.

    The 56% tax number is a misnomer. The majority of people who earn that much have properties that give them significant deductions, and many have partnerships or S-corps, which means they are taxed as businesses not individual payers.

    That's what Warren Buffett is saying when he says he pay less taxes than his secretary.



    Really? Come look at my tax return.


    Then, Dude. You need a better accountant or business manager.
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    Apr 15, 2010 1:26 AM GMT
    Christian73 said
    calibro said
    southbeach1500 said
    calibro said
    Umm... that neglects the fact that taxes are supposed to relative to earned income. If someone earns 15,000 a year and is forced to pay 100 dollars that is not the same as someone who theoretically makes 150,000 a year and pays 1,000. Even though they are proportional, the actual means and impact of the costs are very different.

    A person who works 180 days a year, and currently qualifies to pay no federal income tax, can certainly afford a once a year payment of $100. That's reality, not theoretical.


    No, you aren't addressing the logic of my argument. Someone who lives off 14,900 dollars is not the same as someone who lives off 149,000. You cannot ignore relative earning scale that affect people's lives. And what if someone in that situation has a kid? You cannot isolate circumstance from your ideas.


    But Calibro, that's they only way they can do it and not have to deal with how amoral their argument is. If you factor in starving children and homeless people, they might feel bad. icon_rolleyes.gif


    In my own personal situation, the more i can keep the more i can invest which in turns gives more people jobs. Also, every house is minimum $20k in repairs. That is $20k into the economy. I also provide a wonderful, safe, clean and updated house to potential homebuyers and most are priced a tad under market. Every house i sell a agent, loan officer, title company, closer,etc get paid.
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    Apr 15, 2010 1:28 AM GMT
    Christian73 said
    PAstud21 said
    Christian73 saidPAStud & SouthBeach -

    Don't you understand what the Right has done for the past 40 years? What Fox continues to do?

    They are paid by rich people (multi-millionaires to billionaires) to make middle class people (and let's face it, earning $200K for a family of four in NYC isn't gonna make you rich) blamed poor people for everything.

    The 56% tax number is a misnomer. The majority of people who earn that much have properties that give them significant deductions, and many have partnerships or S-corps, which means they are taxed as businesses not individual payers.

    That's what Warren Buffett is saying when he says he pay less taxes than his secretary.



    Really? Come look at my tax return.


    Then, Dude. You need a better accountant or business manager.


    See, that is where you're just simply wrong. I have ***3**** CPA's on my team. This MYTH that only the rich get taxed to death is such complete nonsense. Look at the above poll. Look at my own little situation. If this is happening to me then its going on across our GREAT land. See, when you have your own business you originate business and its a complete different beast than working for a company or a non profit.
  • jock_1

    Posts: 1491

    Apr 15, 2010 1:42 AM GMT
    i think you all have valid points. it just seems more people are really hurting these days. especially middle income people whatever that is. i dont think the rich are affected by taxes very much....seems like they stay rich no matter what
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    Apr 15, 2010 1:45 AM GMT
    Christian73 saidPAStud & SouthBeach -

    Don't you understand what the Right has done for the past 40 years? What Fox continues to do?

    They are paid by rich people (multi-millionaires to billionaires) to make middle class people (and let's face it, earning $200K for a family of four in NYC isn't gonna make you rich) blamed poor people for everything.

    The 56% tax number is a misnomer. The majority of people who earn that much have properties that give them significant deductions, and many have partnerships or S-corps, which means they are taxed as businesses not individual payers.

    That's what Warren Buffett is saying when he says he pay less taxes than his secretary.


    Doesn't this go against increases taxes on the rich? The more the upper upper class is taxed, the more resources they will use to try to limit the amount of taxes paid. Therefore it doesn't really help very much as far as increase the amount that goes to the government. However the lower bracket of "rich", those that own small business for example won't be able to have the resources as easily, which really means the tax hikes hurt these people the most. Having lower taxes helps the "lower rich bracket" which creates jobs while also not pushing the upper rich bracket to push away from the tax system and therefore the government gets more cash. Obviously too low and that won't be good either, but you seem to think that taxes can be 80% on the rich with no consequences
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    Apr 15, 2010 2:40 AM GMT
    calibro said
    shybuffguy said
    Christian73 said
    southbeach1500 saidI believe I've always made it clear that I'm talking about federal income taxes. But with so many discussions on this topic here, I suppose you can find someplace where I either didn't use "federal" or "income" or "federal income."

    But the truth remains the truth. 47% of households pay no federal income tax.


    Right. But what this article points to is what an illusory statistic that is. If the wealthiest Americans have a) seen their incomes skyrocket over the past three decades AND b) had their taxes markedly reduced at the same time, why the incessant whining?


    You really don't get it, do you ?
    Many of the peopel who fall in the "wealthiest American" class are small business owners who can least afford the tax increases. Keep increasing the taxes on the people who move the economy and pretty soon they move to a better economy! When the small businesses don't expand and we have a perminant high unemployment rate and a stagnant economy, then , ask yourself "why the incessant whining" !

    http://www.ncpa.org/pub/ba671


    If you're earning more than 200K a year, then I'm sorry because I fail to see how the 3.8 taxing is destructive, How is it that paying that percentage in comparison to the amount of money generated is actually hurting the economy and small businesses? I'm not saying 7,500 dollars isn't a lot of money, but it seems incorrect to assume that cost is preventing business expansion, especially when they US operated with much higher tax rates that lead to job expansion.



    Are you serious?
    You haven't taken into account that I also have a state income tax that I have to pay. A Local tax I have to pay. Sprinkle in a few other taxes I have to pay. I have to pay an asssement for police and fire protection every 3 months because my business is located in an area just anexed by another city that can't afford to provide those from the taxes I already pay, and since I own my bldgs I can"t exactly move my business. I have property taxes. Not to mention the fact that insurance premiums are going to go up when my policy is renewed because of the new restrictions placed on the insurence industry. I'm already at almost 40% in taxes. With the proposed new taxes and tax hikes I will be closer to 63% in taxes. You don't think that keeps business from expanding ?
    And we haven's even talked about what happens if I die. My son has to sell half of what I own to pay the 50% inheritance tax! That's a tax that hits small business owners and farmers where we live!
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    Apr 15, 2010 2:55 AM GMT
    shybuffguy said
    calibro said
    shybuffguy said
    Christian73 said
    southbeach1500 saidI believe I've always made it clear that I'm talking about federal income taxes. But with so many discussions on this topic here, I suppose you can find someplace where I either didn't use "federal" or "income" or "federal income."

    But the truth remains the truth. 47% of households pay no federal income tax.


    Right. But what this article points to is what an illusory statistic that is. If the wealthiest Americans have a) seen their incomes skyrocket over the past three decades AND b) had their taxes markedly reduced at the same time, why the incessant whining?


    You really don't get it, do you ?
    Many of the peopel who fall in the "wealthiest American" class are small business owners who can least afford the tax increases. Keep increasing the taxes on the people who move the economy and pretty soon they move to a better economy! When the small businesses don't expand and we have a perminant high unemployment rate and a stagnant economy, then , ask yourself "why the incessant whining" !

    http://www.ncpa.org/pub/ba671


    If you're earning more than 200K a year, then I'm sorry because I fail to see how the 3.8 taxing is destructive, How is it that paying that percentage in comparison to the amount of money generated is actually hurting the economy and small businesses? I'm not saying 7,500 dollars isn't a lot of money, but it seems incorrect to assume that cost is preventing business expansion, especially when they US operated with much higher tax rates that lead to job expansion.



    Are you serious?
    You haven't taken into account that I also have a state income tax that I have to pay. A Local tax I have to pay. Sprinkle in a few other taxes I have to pay. I have to pay an asssement for police and fire protection every 3 months because my business is located in an area just anexed by another city that can't afford to provide those from the taxes I already pay, and since I own my bldgs I can"t exactly move my business. I have property taxes. Not to mention the fact that insurance premiums are going to go up when my policy is renewed because of the new restrictions placed on the insurence industry. I'm already at almost 40% in taxes. With the proposed new taxes and tax hikes I will be closer to 63% in taxes. You don't think that keeps business from expanding ?
    And we haven's even talked about what happens if I die. My son has to sell half of what I own to pay the 50% inheritance tax! That's a tax that hits small business owners and farmers where we live!


    Well said and 100% correct.
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    Apr 15, 2010 2:56 AM GMT
    PAstud21 said

    See, that is where you're just simply wrong. I have ***3**** CPA's on my team. This MYTH that only the rich get taxed to death is such complete nonsense. Look at the above poll. Look at my own little situation. If this is happening to me then its going on across our GREAT land. See, when you have your own business you originate business and its a complete different beast than working for a company or a non profit.


    Again, I say, if you have three CPAs on your team and they haven't told you to incorporate your business, or do something else to lessen your tax burden, you need new advisers.

    But if you're grossing $200K and falling in that deadly zone of 56%, I don't think you should pay that much. Again, middle- and upper-middle class folks are definitely getting squeezed. It's the Jamie Dimons and Dick Fulds of the world who aren't paying their fair share. And, even beyond individuals, it's the corporations and, yes, I'll say it, the Churches, which are engaging in partisan politics while being given tax-exempt status. I say tax the Catholic Church's real estate to pay for the shrinks all the abused kids are going to need.
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    Apr 15, 2010 3:00 AM GMT
    Christian73 said
    PAstud21 said

    See, that is where you're just simply wrong. I have ***3**** CPA's on my team. This MYTH that only the rich get taxed to death is such complete nonsense. Look at the above poll. Look at my own little situation. If this is happening to me then its going on across our GREAT land. See, when you have your own business you originate business and its a complete different beast than working for a company or a non profit.


    Again, I say, if you have three CPAs on your team and they haven't told you to incorporate your business, or do something else to lessen your tax burden, you need new advisers.

    But if you're grossing $200K and falling in that deadly zone of 56%, I don't think you should pay that much. Again, middle- and upper-middle class folks are definitely getting squeezed. It's the Jamie Dimons and Dick Fulds of the world who aren't paying their fair share. And, even beyond individuals, it's the corporations and, yes, I'll say it, the Churches, which are engaging in partisan politics while being given tax-exempt status. I say tax the Catholic Church's real estate to pay for the shrinks all the abused kids are going to need.



    Obviously you completely fail to accept reality. OF COURSE my business is incorporated however my flips are still considered ORDINARY INCOME. Look, i know my business and i have 3 CPA's go over my numbers every 6 months. I trust them along with all the other investors i know over you.
  • calibro

    Posts: 8888

    Apr 15, 2010 3:19 AM GMT
    shybuffguy said


    Are you serious?
    You haven't taken into account that I also have a state income tax that I have to pay. A Local tax I have to pay. Sprinkle in a few other taxes I have to pay. I have to pay an asssement for police and fire protection every 3 months because my business is located in an area just anexed by another city that can't afford to provide those from the taxes I already pay, and since I own my bldgs I can"t exactly move my business. I have property taxes. Not to mention the fact that insurance premiums are going to go up when my policy is renewed because of the new restrictions placed on the insurence industry. I'm already at almost 40% in taxes. With the proposed new taxes and tax hikes I will be closer to 63% in taxes. You don't think that keeps business from expanding ?
    And we haven's even talked about what happens if I die. My son has to sell half of what I own to pay the 50% inheritance tax! That's a tax that hits small business owners and farmers where we live!


    That depends on how much your end product is. My family pays over fifty percent in taxes easily; my family also just sold their fifteen million dollar beach house because they got tired of having to drive all the way out to it. Even though my family gets taxed up the wazoo, they're still making quite a decent living. They also realize that their taxes make it possible for the government to run and in turn it allows them to create their living. I have no idea how much you currently make so I can't say whether losing 63 percent of that leaves you in a bad place or not. Also, state and local tax costs are not reasons to lower the federal tax bracket. Finally, I do agree with you on a lot of points, particularly the inheritance issue. All I am saying is that the argument that small business can't survive doesn't seem lucid to me as much as small business end up losing a large profit share; that isn't to say that's a good thing, just that they are two different things.
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    Apr 15, 2010 3:25 AM GMT
    calibro said
    shybuffguy said


    Are you serious?
    You haven't taken into account that I also have a state income tax that I have to pay. A Local tax I have to pay. Sprinkle in a few other taxes I have to pay. I have to pay an asssement for police and fire protection every 3 months because my business is located in an area just anexed by another city that can't afford to provide those from the taxes I already pay, and since I own my bldgs I can"t exactly move my business. I have property taxes. Not to mention the fact that insurance premiums are going to go up when my policy is renewed because of the new restrictions placed on the insurence industry. I'm already at almost 40% in taxes. With the proposed new taxes and tax hikes I will be closer to 63% in taxes. You don't think that keeps business from expanding ?
    And we haven's even talked about what happens if I die. My son has to sell half of what I own to pay the 50% inheritance tax! That's a tax that hits small business owners and farmers where we live!


    That depends on how much your end product is. My family pays over fifty percent in taxes easily; my family also just sold their fifteen million dollar beach house because they got tired of having to drive all the way out to it. Even though my family gets taxed up the wazoo, they're still making quite a decent living. They also realize that their taxes make it possible for the government to run and in turn it allows them to create their living. I have no idea how much you currently make so I can't say whether losing 63 percent of that leaves you in a bad place or not. Also, state and local tax costs are not reasons to lower the federal tax bracket. Finally, I do agree with you on a lot of points, particularly the inheritance issue. All I am saying is that the argument that small business can't survive doesn't seem lucid to me as much as small business end up losing a large profit share; that isn't to say that's a good thing, just that they are two different things.



    Nobody regardless of income should pay over 50% in taxes. All you're doing is punishing success and hard work. Also the govt has shown they are terrible money managers. See SS, medicare, stimulus,etc. See 11-12 T in debt. See 2009 annual deficit of $1.4 T.

    Individuals should have more control over their finances and not the gov't. America is about going from nothing to something BIG. I am a small business owner who would LOVE to hire and take on more inventory but CLEARLY pushed down by heavy taxes. I could do much more and stimulate the economy with $20k than the gov't.