IRFRANK
 
Reply Sun 6 Jan, 2013 12:56 pm
I really have a hard time understanding the tea party. Today I was driving down the interstate and passed a fairly new RV towing a full size pickup truck. The truck was flying a large 'Don't tread on me' flag. Driving down the govt built interstate in a vehicle that gets 8 mpg complaining about paying taxes. It takes a lot of nerve. Life is hard for those tea partners.
 
spitfire88
 
  2  
Reply Mon 7 Jan, 2013 05:18 am
@IRFRANK,
I'm sure they were not complaining about paying the tax on the gasoline for their 8mgp vehicle. Tea Partyers are opposed to the way income taxes are levied citing that it is unfair to continuously increase the amount of taxes collected from wealthier people because the top 10% of income earners account for over 70% revenue collected from the income tax. Given that they had a new RV towing a nice truck, they probably contribute more than most in taxes.

Speaking of the govt built roads, are they really wrong to say that it is unfair that some people are required to pay more in taxes to fund and drive on those roads than others, not to mention the 40% of people who do not pay taxes at all?

Phoenix32890
 
  1  
Reply Mon 7 Jan, 2013 05:32 am
@spitfire88,
Quote:
Speaking of the govt built roads, are they really wrong to say that it is unfair that some people are required to pay more in taxes to fund and drive on those roads than others, not to mention the 40% of people who do not pay taxes at all?


Couldn't have said it better myself. It is interesting that when some people want taxes raised, they most often want it raised on OTHER PEOPLE! You rarely hear of people who want taxes raised on themselves.


BTW, Welcome to A2K! Very Happy
0 Replies
 
engineer
 
  3  
Reply Mon 7 Jan, 2013 07:18 am
@spitfire88,
spitfire88 wrote:

Speaking of the govt built roads, are they really wrong to say that it is unfair that some people are required to pay more in taxes to fund and drive on those roads than others, not to mention the 40% of people who do not pay taxes at all?

Welcome to A2K!

I've never met anyone who does not pay any taxes at all so where do you find 40% of people? Anyone who gets a paycheck pays over 12% in SS tax and another 3%+ in Medicare. Typically, the lower the income tax in any given state, the higher the sales tax. We pay ~7% on everything but food here. Where my mother lives in "low tax" Alabama, they pay 11% on everything including food. I did a computation on another thread when Romney released his tax records that showed that Romney's tax rate is about half of mine including all taxes. Warren Buffet made a similar announcement that he pays about half the rate of his secretary. We all pay taxes and if we want to have a decent standard of living, we all need to.
spitfire88
 
  1  
Reply Mon 7 Jan, 2013 07:43 am
@engineer,
Edit [Moderator]: Link removed

There's one article to discuss the income tax issue in question.

You are correct, everyone who earns a paycheck does pay ss and medicare but that's not the tax I was referencing. Those taxes go towards those specific programs and the income tax funds federal government projects such as the interstates. Not everyone pays federal income tax. There's a difference between state income tax and the federal income tax. And the amount of your state tax does not necessarily reflect the sales tax. For example, I am from Florida and there is no state tax and the sales tax is only 7% with the exception of food whereas some states have a higher sales tax with an additional state income tax.

Thank you for the welcome to this site!
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engineer
 
  2  
Reply Mon 7 Jan, 2013 10:11 am
@spitfire88,
spitfire88 wrote:

You are correct, everyone who earns a paycheck does pay ss and medicare but that's not the tax I was referencing. Those taxes go towards those specific programs and the income tax funds federal government projects such as the interstates. Not everyone pays federal income tax. There's a difference between state income tax and the federal income tax.

Money is fungible so saying certain taxes only go to certain programs is idealistic. SS taxes have been funding the general fund for decades. The federal government sends money back to the states for a variety of programs so federal taxes and state taxes are intricately linked. Even things like gas taxes have a state and a federal component and the two work together on major highway projects.

The reason 40%+ of people do not pay federal taxes is that successive Republican adminstrations felt that it would be better for the poor to pay less tax than it would be for them to pay more but get more government services in return. I don't completely disagree with that but it has been used as an excuse to reduce taxes for the rich. Our tax rate is very low both by historical standards and in comparison to other industrialized countries. Twelve years ago, we had a balanced budget. Their are two major differences between then and now and it's not spending. First, we decided to fight two questionable wards and second, we decided to dramatically cut our tax rates. How do going to war and cutting taxes go together. Our grandparents fully expected that going to war meant higher taxes to pay the cots of supporting our troops. We've been sold a bill of goods that we can have a strong military fighting abroad, lower taxes and the same standard of living. You can get two out of three; which do you choose to give up?
IRFRANK
 
  4  
Reply Mon 7 Jan, 2013 10:44 am
@spitfire88,
Quote:
Speaking of the govt built roads, are they really wrong to say that it is unfair that some people are required to pay more in taxes to fund and drive on those roads than others, not to mention the 40% of people who do not pay taxes at all?



Yes. I think they are wrong. They are reaping the benefits of those roads and have a much better ability to pay for them. Actually, the roads may be a bad example, because at 8 mpg they are paying more through the gas tax, which is as it should be. My point is that the folks who are enjoying the high standard of living we have and have the ability to pay are the ones complaining the loudest. Do not get me started on the 40% of people who don't pay. Everyone on the highway pays gas taxes. Everyone pays sales taxes. There are very few people who don't pay taxes at all. I don't envy their position in life.


Spitfire - I welcome you to the forum also!
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spitfire88
 
  1  
Reply Mon 7 Jan, 2013 04:55 pm
@engineer,
I agree with your stance on the wars, however, it would be incorrect to say there are only two major differences between now an 12 years ago, war and decreased taxes. Your are excluding the fact that the government now spends twice as much for pensions, health care, transportation, and welfare than it did 12 years ago. Spending is absolutely a component of our fiscal issues.

Your responses indicate that your are in favor of higher taxes. But how does paying more taxes really create more revenue? Sure, the government would have more revenue from the people's income but then you and I and everyone else would have less money in our pocket, causing us to consume less, which takes money away from the government. It's a wash. Although I think the taxes could be done more effectively, I do not think it's one of the two major reasons that we have a deficit.

spitfire88
 
  1  
Reply Mon 7 Jan, 2013 05:16 pm
@IRFRANK,
Thanks for the welcome!

I'm interested in your opinion on a flat income tax. The rich would still pay more in taxes but each income earner would pay the same % of their earnings to fund our government programs.
H2O MAN
 
  -4  
Reply Mon 7 Jan, 2013 05:38 pm
@spitfire88,

One of the big problems with a flat income tax is that it continues to grow your government.

The better alternative would be a gradual transition into The FairTax Plan, this would actually reduce
the size of our government and that would be a great thing for the citizens of this constitutional republic.
0 Replies
 
engineer
 
  1  
Reply Mon 7 Jan, 2013 05:42 pm
@spitfire88,
spitfire88 wrote:

Your responses indicate that your are in favor of higher taxes. But how does paying more taxes really create more revenue? Sure, the government would have more revenue from the people's income but then you and I and everyone else would have less money in our pocket, causing us to consume less, which takes money away from the government. It's a wash.

It depends on who you tax. If you tax the poor/lower middle class, it impacts spending directly, exactly as you say. At the bottom end of the spectrum, people tend to spend everything they make. (This is the concept behind the social security tax holiday that recently expired. By returning a little money every paycheck to the least wealthy, you stimulate the economy by increasing spending.) If you tax the wealthy, you get a completely different effect. At the top end, people have all the money they need so they tend to save excess money. Taxing the upper end reduces the amount of cash floating around and tends to raise interest rates. We were in pretty good balance twelve years ago. The tax cuts favoring the rich resulted in lots of money flowing into the equity markets, encouraged banks to lower their lending requirements in order to make more loans and led to the housing bubble. The equity markets are still flooded with money with many corporations sitting on billions in cash because they can't find suitable investments. Removing some of that money right now would not cause any harm. That has not always been true, but it certainly is now.
engineer
 
  3  
Reply Mon 7 Jan, 2013 05:45 pm
@spitfire88,
spitfire88 wrote:

I'm interested in your opinion on a flat income tax. The rich would still pay more in taxes but each income earner would pay the same % of their earnings to fund our government programs.

If the rich paid the same absolute level including sales taxes, property taxes, social security taxes, gasoline taxes, etc then it would probably work pretty well since today they pay a much lower rate that the typical middle class family but I doubt that is going to happen. Every tax except the income tax is regressive so you need a progressive income tax if you want to have any hope of balancing it out.
0 Replies
 
spitfire88
 
  1  
Reply Mon 7 Jan, 2013 06:03 pm
@engineer,
Taxing the rich always works... Except that it doesn't. You concluded that Romney only paid 14% in income tax, lower rate than people who make $50k. Surely he is not the only one with this knowledge. I'm sure all other rich people and their lawyers know how to work the system. Change the tax code? They are always changing parts of the tax code and yet they are still able to circumnavigation the system. Many of our elected officials are "rich" and would never close all the loopholes because people will always look out for themselves, regardless of party affiliation. Targeting the rich because "they're better equipped to pay more" is not the answer because they're smart enough to avoid the increased rates, thus, resulting in no greater income for the government.

engineer
 
  1  
Reply Mon 7 Jan, 2013 06:19 pm
@spitfire88,
It's not that they are smart, they just buy enough politicians to create the loopholes and then limit enforcement so they can't get caught. But back to your question, the "flat tax" would actually tilt the system more than it is tilted now. Removing the only progressive tax we have would result in a more regressive system.
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H2O MAN
 
  -3  
Reply Mon 7 Jan, 2013 09:22 pm


We have a spending problem, Obama is this countries spending problem.
0 Replies
 
 

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