To all those who don't understand taxes

[Hawkeye2011]

I don't understand why everyone doesn't just pay the same percentage. 20%, 25%, 30%, whatever. Pick a number and roll with it. Poor, rich, all the same percent.

Couldn't agree with this more

[MatI]

Why Americans Think the Tax Rate's High, And Why They're Wrong.

http://www.nytimes.com/2012/01/20/us/politics/why-americans-think-the-tax-rate-is-high-and-why-theyre-wrong.html

[d2bets]

I don't understand why everyone doesn't just pay the same percentage. 20%, 25%, 30%, whatever. Pick a number and roll with it. Poor, rich, all the same percent.

That's how social security works (well, actually at higher income it goes away), and that's bad enough. So you want someone making minimum wage and $25,000/year to pay 7.5% into social security and then another 20% or 25% into income tax. They will literally go hungry and not be able to feed their kids, just so a millionaire can net $11 million instead of $10 million. Anyone who believes this has to be a prick of the highest order.

[TheCentaur]

I also heard it in a way say you take 9 friends out to eat and you pay the bill for the party of 10.
The meal is not that good and as you go to pay the manager says it will be free.
so The 9 people want their money back even though they didnt pay for anything.
so the manager has how about you pay the bill and i'll give everyone gift certificates
to come back another time.

This is a bit more accurate but I like both stories.

I have done thousands of tax returns, and about 60% of them received refunds. Of those refunds, maybe 15% were actually net refunds of taxes they paid in during the year. The rest were EIC, additional child tax credit, or some other refundable credit.

The biggest problem I have with this is not the fairness of it. It's that it promotes a mentality of entitlement. I've explained to people that you can only get EIC for a limited amount of children, and they answer "But what about people who want big families, what are we supposed to do?" Are they stupid? Most likely. Sure, the EIC and other benefits you may get with a child for a year may be -ev considering the actual expenses, but many of these people don't understand this discrepancy. Guess who pays for their lack of mathematical skills?

It seems like a lot of the tax code was formed under the assumption that indiscriminate population growth is good for the country. We're so fuked now I don't know what the answer is.

[TheCentaur]

So you want someone making minimum wage and $25,000/year to pay 7.5% into social security and then another 20% or 25% into income tax. They will literally go hungry and not be able to feed their kids.

This is why it won't happen without rioting, crime, murder, etc. Huge difference between getting 6k and paying 5k when u make 25k

[Salmon Steak]

That's how social security works (well, actually at higher income it goes away), and that's bad enough. So you want someone making minimum wage and $25,000/year to pay 7.5% into social security and then another 20% or 25% into income tax. They will literally go hungry and not be able to feed their kids, just so a millionaire can net $11 million instead of $10 million. Anyone who believes this has to be a prick of the highest order.

No, you are twisting things around. I don't want anyone to go hungry. I don't want anyone not to be able to feed their kids. I want everyone to be equal. If the tax% is too high, lower the tax %. I thought all the debate was about the rich not paying their fair share anyway.

[dodger33]

The rest were EIC, additional child tax credit, or some other refundable credit.
The biggest problem I have with this is not the fairness of it. It's that it promotes a mentality of entitlement.

If everyone could understand this right here we wouldn't have a national debt.

[MonkeyF0cker]

If I read one more time about Warren Buffetts secretary paying more in taxes then Warren I might explode. So read this and shut up

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.

The fifth would pay $1.

The sixth would pay $3.

The seventh would pay $7.

The eighth would pay $12. The ninth would pay $18.

The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).<>The sixth now paid $2 instead of $3 (33%savings).

The seventh now pay $5 instead of $7 (28%savings).

The eighth now paid $9 instead of $12 (25% savings).

The ninth now paid $14 instead of $18 (22% savings).

The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

It's hilarious how you people drink so much kool-aid. Were people fleeing the United States when Bill Clinton was in office (prior to the Bush tax cuts)? How was GDP growth in the 1992-2000 Clinton years when tax rates were at the levels that most people are proposing to return to in order to lower our ridiculous debt levels? Where do you expect these people to flee to? The Ukraine? The United States has one of the lowest tax rates amongst industrialized nations.

Keep sipping on Fox News propaganda. They know better than one of the richest men in America and the world. Right?

[Dr. Black]

"The nine men surrounded the tenth and beat him up."

Hi Sbr, first post.

Didn't think it would be a political one. The reason the 10th man pays the big bucks is for protection. He's the one who needs the police, firemen, army, judicial system the most. Take away the muscle from society, let's see how long he lasts against 1 through 9. He would be torn to shreds and his family might meet the same same fate as Czar Nicholas ii. History shows, pay the masses.

A few Arab billionaire dictators caused the Arab Spring. They didn't learn from history. They were the 10th man. Pay the protection money.

[TheCentaur]

The reason the 10th man pays the big bucks is for protection. He's the one who needs the police, firemen, army, judicial system the most. Take away the muscle from society, let's see how long he lasts against 1 through 9.

You know what would be cool? He could pay the 9 to be policemen, judges, firemen, etc. and eliminate the middleman. He could pay them more with the money he saved too.

[JohnGalt2341]

Tax them too much, attack them for being wealthy, and they just may not show up anymore.

This sort of reminds me of the book Atlas Shrugged by Ayn Rand. If you haven't read it... you should check it out. I think you might like it.

[neverstoppers23]

40 percent of americans don't pay any taxes, and i think an indepdent govt. agency did a study on this that said after all the tax breaks the avg family gets, their tax rate is less then 10 percent.

which is why the top 1 percent pay 25 percent of our taxes, top 10 percent pay 50.

i am tired of hearing about how his warren buffets good ole fashion secretary has a higher tax rate then him. that doesn't take into account ALL OF HER tax breaks.

mitt pays a tax of 14 perecnt because he makes almost all his money from capital gains. capital gains taxes you want to be low so people will invest, which actually leads to a higher net gain in taxes.

but the obama campaign wants to win an election. they don't want to solve the problem, just create distruction and deal with it when they are in office. don't get me wrong the gop is doing it too on many bother issues.

the obama campaign wants to create this class warfare attitude.

[Dr. Black]

You know what would be cool? He could pay the 9 to be policemen, judges, firemen, etc. and eliminate the middleman. He could pay them more with the money he saved too.

That's been tried before too. Study the battles between city-states in Greece and Italy. I pay my guys, you pay your guys, and may the most vicious man win.

Also, what about the criminal element who don't want to be part of your establishment. Cheaper to give them welfare than fight them.

And believe me, it's cheaper to pay the higher tax rate than pay the muscle directly. Your high paid mercenaries end up owning you. You live at their behest.

[UntilTheNDofTimE]

40 percent of americans don't pay any taxes, and i think an indepdent govt. agency did a study on this that said after all the tax breaks the avg family gets, their tax rate is less then 10 percent.

which is why the top 1 percent pay 25 percent of our taxes, top 10 percent pay 50.

i am tired of hearing about how his warren buffets good ole fashion secretary has a higher tax rate then him. that doesn't take into account ALL OF HER tax breaks.

mitt pays a tax of 14 perecnt because he makes almost all his money from capital gains. capital gains taxes you want to be low so people will invest, which actually leads to a higher net gain in taxes.

but the obama campaign wants to win an election. they don't want to solve the problem, just create distruction and deal with it when they are in office. don't get me wrong the gop is doing it too on many bother issues.

the obama campaign wants to create this class warfare attitude.

Yup i posted about this earlier.
Here is a family of 4 making a combined income of 85,000. Using the the standard deduction they pay into the 8% tax bracket. This is not including writting off interest and various other factors. And this is a upper middle class example. Any household making 40k a year pays into the 2% bracket only taking the standard deduction.*

[TheCentaur]

That's been tried before too. Study the battles between city-states in Greece and Italy. I pay my guys, you pay your guys, and may the most vicious man win.

Also, what about the criminal element who don't want to be part of your establishment. Cheaper to give them welfare than fight them.

And believe me, it's cheaper to pay the higher tax rate than pay the muscle directly. Your high paid mercenaries end up owning you. You live at their behest.

Yes, of course you're right no government is bad. Too much is bad also.

[dodger33]

How was GDP growth in the 1992-2000 Clinton years when tax rates were at the levels that most people are proposing to return to in order to lower our ridiculous debt levels?

What the hell does GDP growth or tax rates matter when these dumb fukks spend our money faster than we can make it? You guys have your priorities wrong. Cut spending and I will gladly support a moderate tax increase. They refuse to cut spending because its all the have. Without their government handouts who is going to vote for these idiots?

[guitarjosh]

the rich don't put there money into the economy, they put it in the stock market, banks, etc

They do not put it in the economy

Also if your against obama you would of not posted that. Republicans want the poor, mid class to pay more and rich pay less

You need to learn basic economics. Money put in banks gives the banks more money to loan out for houses, cars, business, etc. People put money in the stock market so they can get more money so they can spend it. It will all go to the economy somehow.

And it would be good if the poor and middle had some actual skin in the game when it comes to taxes. They could then know that the money that the gov't gives them doesn't come from a magic ATM machine, but from other peoples' pocketbooks. Make them pay for all this and they would be more likely to get behind cutting spending.

[Inkwell77]

"The nine men surrounded the tenth and beat him up."

Hi Sbr, first post.

Didn't think it would be a political one. The reason the 10th man pays the big bucks is for protection. He's the one who needs the police, firemen, army, judicial system the most. Take away the muscle from society, let's see how long he lasts against 1 through 9. He would be torn to shreds and his family might meet the same same fate as Czar Nicholas ii. History shows, pay the masses.

A few Arab billionaire dictators caused the Arab Spring. They didn't learn from history. They were the 10th man. Pay the protection money.

People fail to ever acknowledge this fact

[Flashmo]

Chances are #10 inherited the money or made it exploiting 1-9. Try again. Next.

Just because that's the only way you could ever ever get it doesn't mean that there are'nt hard working people who earn it

[Inkwell77]

I believe in a flat tax and getting rid of the whole idea of tax deductions and getting taxes back.

Everyone should be taxed .10 cents on every dollar they make in a paycheck or .20 cents on every dollar in a paycheck, whatever the hell they want to make the rate.

Have as many government programs as you want (these programs can then be discussed in congress, etc.), but tax deductions are a scam. If you qualify for some government program like food stamps or whatever, great, but every single person should pay the same tax rate (whether it is your state rate or federal rate)

Why this concept is not more popular I will never understand. The rich want to keep exploiting the loopholes and the poor think a flat tax is "unfair."

[Inkwell77]

Just because that's the only way you could ever ever get it doesn't mean that there are'nt hard working people who earn it

The number of individuals who inherited or were given "better" opportunities is much higher than the number of people who "earn" it.

[rsnnh12]

The number of individuals who inherited or were given "better" opportunities is much higher than the number of people who "earn" it.

Proof? I'm pretty sure you're just pulling that out of your ass.

Completely agree about the flat tax though. Nice and simple, o BS

[rkelly110]

Sounds like the people who want a flat tax, are single with no kids, rent or live with mommie.
Am I wrong?

The loopholes for the rich should be eliminated and keep what we have now, for the middle class.

Do you people even work? If you do, did you ever do the math at the end of the year?
How about on your last paycheck. Divide what you brought home by your gross and look
at that number. How about your year end. Gross minus your net. It's like 1/2 isn't it.
Out of that 1/2 you have to pay food, shelter, transportation, insurance and entertainment.

It's not only about what you pay to the govt, it's about everything. Local, state, and health
insurance. So what do you got, 25-30%?

You might argue about medicare and SS going to a future cause, can you spend that now?
Will you be alive to use that? That's not transferable. You die, no one gets it, but the uncle.

I'm tired of hearing about us 99% not paying enough and the rich laughing all the way to
the bank.

[Andy117]

What the hell does GDP growth or tax rates matter when these dumb fukks spend our money faster than we can make it? You guys have your priorities wrong. Cut spending and I will gladly support a moderate tax increase. They refuse to cut spending because its all the have. Without their government handouts who is going to vote for these idiots?

The problem about spending is that neither party is truly serious about cutting anything. We're not close to a balanced budget and won't be for a very long time.

[RyanLeafOfBets]

That was pretty fantastic.

[Flashmo]

Proof? I'm pretty sure you're just pulling that out of your ass.

Completely agree about the flat tax though. Nice and simple, o BS

+100

[DOMINATER]

yes. you have explained it in a way even these beasts can understand. it takes$ 100,000 to learn what he explained in 5 minutes.lol

[Inkwell77]

Proof? I'm pretty sure you're just pulling that out of your ass.

Completely agree about the flat tax though. Nice and simple, o BS

Sorta pulling it out of my ass, but I would wager a large amount that a larger percentage (more than 50%) of the top earners in this country attended private elementary, middle, and high schools. As well as got there start through some sort of "connection" (most likely a family member).

This stuff is not exactly track-able, but it seems likely.

[jstblaze]

Capital gains tax being lower does encourage reinvestment in our economy. That is a good thing.

But the problem is that the investment opportunities available to the rich are not available to the poor. So the poor do not have the opportunity to pay 15% rate on money.

There is no access to the very high return VC and LBO funds, along with less access to IPO's.

It makes no difference what deductions you have ro dont have, but being able to only pay 15% tax on the mojority of your income is a benefit limited to the wealthy.

[mebaran]

It's hilarious how you people drink so much kool-aid. Were people fleeing the United States when Bill Clinton was in office (prior to the Bush tax cuts)? How was GDP growth in the 1992-2000 Clinton years when tax rates were at the levels that most people are proposing to return to in order to lower our ridiculous debt levels? Where do you expect these people to flee to? The Ukraine? The United States has one of the lowest tax rates amongst industrialized nations.

Keep sipping on Fox News propaganda. They know better than one of the richest men in America and the world. Right?

Great point. The Republican argument seems to be that by raising taxes on the rich, they'll get up and leave the country (bringing their job creation and tax revenue elsewhere). However, there is absolutely zero empirical evidence to suggest that this would happen.

What WOULD happen, and has happened in the past, is the rich would complain about the tax hikes and then realize that they are contributing to the country that allows them to make so much money in the first place. This is paramount to Warren Buffet's initial argument: Increasing taxes on the rich, mainly by increasing capital gains taxes, will NOT deter people from making investments.

Consider this example:

John, a super rich individual, is looking at a few possible investments for the upcoming quarter. One of these investments is expected to realize a 30% return (not uncommon for people with massive investments in hedge funds, etc). If he invests $10 million, and is expected to realize 30% in long-term capital gains, he will be taxed the normal 15% long-term capital gains rate. So his $3 million in revenue would be taxed $450,000. If Congress were to impose a long-term capital gains rate equal to your tax bracket after realized returns, John would end up paying 35% (the top marginal tax rate) on his capital gains. So a total of $1,050,000 in taxes.

The question at the heart of the argument is: will John forgo the investment in this example because of the tax hike?

Scenario A: Real rate of return over 1 year (after taxes), 15% capital gains, is 25.5%
Scenario A: Real rate of return over 1 year (after taxes), 35% capital gains, is 19.5%

Meanwhile, that extra $600,000 in tax revenue is being used for something (that something can be debated by Congress for a while lol...I'm not touching that).

[flocko76]

Once upon a time a man, named Warren, made some money. That year he paid 30% tax on the money he made. So out of his 100 income he is only left with 70 bucks. With that 70 bucks he buys stock A. Now lets say in 10 years that stock is worth 105 dollars. Now he has to pay 15% tax on the 35 dollar gain from the stock sale. Now he pays 15% tax on money he has ALREADY PAID 30% TAX ON! So now Warren has made 135 dollars and only has 100 bucks left. Can't you fuks add? He paid a lower percent tax than his secretary this year but that money didn't come from his ass. He has already paid tax on it now he is paying tax TWICE! How fukking hard is that to understand??

this is very hard to understand what you are trying to say because it's a made up story. use facts.

[UntilTheNDofTimE]

this is very hard to understand what you are trying to say because it's a made up story. use facts.

He is saying if you want rich people to pay into their normal tax bracket( 35% on capitol gains) they would then be paying tax twice.

Lets say you worked at Wallmart and made $40,000 a year and took home 30,000. You already paid 25% in taxes on this 30,000.

You then invest your 30,000 in Apple. your apple stock is now worth 50,000. In the current structure you would pay 15% in taxes on that 20,000. Your suggesting you pay 25% on it? your normal tax rate even though youve already once been taxed on it?

[Inkwell77]

Sounds like the people who want a flat tax, are single with no kids, rent or live with mommie.
Am I wrong?

Please explain to me why a flat tax is a bad thing?
It is by far the most equal and fair system of taxation. I'm not much of a constitution type of guy or whatever, but I find it hard to believe this country was founded on giving taxable income benefits to people because they have kids or have a house.....

There are social programs out there for people who need help, and I support most of these programs (Hell, I support the government paying families who adopt kids into their homes).
Please explain to me why the government should tax a person at a lower percentage because they made a personal choice to have a kid or buy a house.... They were in no way forced to do either of these things (unless some type of rape was involved and that is an entirely different scenario), so I have no idea why they should be rewarded from the government.

[flocko76]

He is saying if you want rich people to pay into their normal tax bracket( 35% on capitol gains) they would then be paying tax twice.

Lets say you worked at Wallmart and made $40,000 a year and took home 30,000. You already paid 25% in taxes on this 30,000.

You then invest your 30,000 in Apple. your apple stock is now worth 50,000. In the current structure you would pay 15% in taxes on that 20,000. Your suggesting you pay 25% on it? your normal tax rate even though youve already once been taxed on it?

I'm not suggesting it, others are. for it to be considered being taxed twice, they would have to tax the original $40000 (leaving $30000) and then the entire $50000, not just the $20000 profit. The current capital gain tax rate is 15%. These people crying about Buffett paying less in taxes than his secretary (and even buffett himself) think that 15% capital gains tax is too low.

[UntilTheNDofTimE]

I'm not suggesting it, others are. for it to be considered being taxed twice, they would have to tax the original $40000 (leaving $30000) and then the entire $50000, not just the $20000 profit. The current capital gain tax rate is 15%. These people crying about Buffett paying less in taxes than his secretary (and even buffett himself) think that 15% capital gains tax is too low.

Agreed. Anyone who dosent even pay close to the 15% tax bracket( and most Americans dont, see my 85,000 household income example above in this thread) dosent have a foot to stand on and should just worry about there problems and stop blaming the top 1%.