Seriously... Are you Paying Your "Fair" Share?

[ZahZoo]

My overall tax rate this year was about 29%...

What I find disturbing is $100 BILLION being paid out to people with NO tax liability.

Analysis: 'Fair share' in taxes? Not by the numbers

By Jim Angle

Published February 20, 2012

| FoxNews.com

Read more: http://www.foxnews.com/politics/2012/02/20/analysis-fair-share-in-taxes-not-by-numbers/#ixzz1n1pAwyXO

As Americans sit down to file their federal tax returns, a simple question comes to mind -- what's a "fair share" to give the federal government in taxes?

For half the working population, fair means paying almost no income taxes at all.

"The top 10 percent income earners pay about 70 percent of federal income taxes," says Will McBride of the Tax Foundation. "The bottom 50 percent of tax filers have, they pay almost no federal income tax. They pay about 3 percent of federal income taxes."

President Obama’s phrase that everyone should “pay our fair share of taxes” has become something of a political mantra. He has used the expression in dozens of speeches, beginning back in his State of Union address in January. More recently, he told University students in Virginia, "we do expect everyone to do their fair share.”

But for many of the people who pay no taxes, the government also allows tax credits, which end up providing refunds.

"Close to a hundred billion in checks sent out by the IRS (go) to folks who have no tax liability," McBride said. "So the IRS is becoming a spending agency."

Arthur Brooks, head of the American Enterprise Institute, put it this way: "Half of the people who don’t pay anything in federal income taxes -- about half of them pay less than zero."

But Brooks says the system is tilted even more toward those in the middle class and below because they also get services from the federal government. As a result the per capita value of government spending exceeds what those individuals pay in federal taxes.

"Right now about 70 percent of Americans take more out of the tax system than they put into it, according to the Tax Foundation," Brooks said."That's something that should really alarm a lot of Americans."

The policies that left so many people paying no income taxes have been supported by presidents of both parties, and despite what Americans tell pollsters they believe is fair, that’s not how it shakes out.

"The interesting thing is that about two-thirds of Americans think that everybody should pay something,” Brooks said, "so they remember that our government isn't free."

Read more: http://www.foxnews.com/politics/2012/02/20/analysis-fair-share-in-taxes-not-by-numbers/#ixzz1n1oppnCN

[ELVIS]

All hail the food stamp president and the mighty government dole...

http://2.bp.blogspot.com/-oJ5hdOMRIZI/TdFx0pVVhtI/AAAAAAAAEBE/0JDzs62DK78/s1600/Food+Stamp+Obama.jpg


:elvis:

[ZahZoo]

I don't view the current tax system as anything to pin on Obama nor the current welfare system. Many, many Democrats and Republicans shaped those system long before this millennium started.

Saw a post in another thread where Lounge Machine™ advocated investment income should be taxed at a higher rate than employment income. I agree wholeheartedly!!

But I see the current system as totally flawed. If you have no tax liability... you don't deserve a tax refund. Nothing there to "refund".

I understand the fear and potential backlash if Washington were to revamp the tax system and the 60-70% of middle class and lower all of a sudden had to kick up 15% rather than 3%. But you know that is what's called a fair share. A lot of people would be pissed... But I'll tell you the immediate result will be an overwhelming uprising against government growth and financial mismanagement.

It's easier to stay with the status quo... and sounds good to tax those "rich" guys more. But that's the desired position for all in Washington to keep the majority feeling barely any marginal impact. If more people had more of thier income and skin in the game... I guarantee you change in government spending and waste will come swift and loud.

[ELVIS]

Federal income tax will never be fair...

There are plenty of other federal taxes, and maybe investment income should be taxed at a higher rate...

It's time to cut the size, scope and spending of the federal government and start phasing out the federal income tax...


:elvis:

[FORD]

Tax advice from FAUX Noise??

I'll bet Murdoch didn't pay a dime in taxes this year.

[knuckleboner]

the one problem with the argument that certain lower income people pay nothing in income taxes is that it usually ignores that they pay social security and medicare taxes.

for a parent with 2 kids earning $30,000 a year, $1800 is a lot of moeny, but that's the amount of social security taxes they pay. so even if they don't pay another dime in income taxes, taxes still strongly affect them.

[LoungeMachine]

Federal income tax will never be fair...

There are plenty of other federal taxes, and maybe investment income should be taxed at a higher rate...

It's time to cut the size, scope and spending of the federal government and start phasing out the federal income tax...


:elvis:

An ELBOW post I actually agree with.....

:gulp:

And since we're cutting spending, let's start with weapons systems that we dont need that are basically corporate welfare for war profiteers

[fifth element]

Federal income tax will never be fair...

There are plenty of other federal taxes, and maybe investment income should be taxed at a higher rate...

It's time to cut the size, scope and spending of the federal government and start phasing out the federal income tax...


:elvis:
the one thing that you and i have always agreed about.....

phasing out federal income tax is a great idea...

a flat tax makes so much more sense...and in that way...everyone pays...
rich, poor, middle class, and visitors to the country....
you get taxed as you purchase items...and then not again....
not through your pay checks and not at the end of the year....

unfortunately, the IRS does not care for this idea, as it would make their jobs unneccesary.

[Seshmeister]

There are some problems with that.

Sales tax is unfair
http://www.fairtaxation.org/facts/unfairsalestax.php

It will discourage personal spending which will shrink the economy which is maybe a bad thing at the moment.

Also I always thought that increases in sales tax increased inflation although a google seems to show like most things in economics it's debated.

[Nickdfresh]

Another brilliant piece by Fox adverting for some bullshit tax foundation that fails to mention that the top 20% own 85%+* of the wealth in America. So, they should pay at LEAST 70%!!

http://www2.ucsc.edu/whorulesamerica/power/wealth.html

[Seshmeister]

Nobody can really blame the rich for not wanting to pay tax. It's all the enablers, the people that can be convinced to go against their own self interests that are infuriating.

[Nitro Express]

I would love to see the income tax scrapped and just have a VAT tax with food being exempt. Of course the income tax creates a huge tax preparation industry and creates lot's of jobs but it's a bunch of bullshit. Everyone should pay some tax and I think it's fair because the rich buy more so they will pay more.

Actually I have no problem paying taxes as long as they are fair and reflect the amount of government services I use. I have no problem with the gasoline tax because they do a good job of maintaining the roads around here and it would be a big pain in the butt to stop at a toll booth every couple of miles. In the last ten years we have gotten widened roads, new bridges, the surface is good. No potholes. I can't complain.

I always buy my snowmobile tags locally because the money goes towards grooming the hundreds of miles of trails we have here. It's always nice to have the groomer knock the moguls down and cruise on a fresh bed of powder to get the mail in the morning. I actually take my snowmobile because it's faster than the car.

[Nitro Express]

Tax makes sense when you have a principle in holding with a fixed amount of bonds and notes being written off of it. The government needs to get some of that money back to function. What we have now is no principle and money being created from nothing. The tax actually robs the real economy as does the resulting inflation. Then what burns me most is my interest is taxed. It's all la la land now with nothing of substance supporting anything. It's like the old Wendy's commercial. Where's the beef? Where's the reality?

[Nitro Express]

All hail the food stamp president and the mighty government dole...

http://2.bp.blogspot.com/-oJ5hdOMRIZI/TdFx0pVVhtI/AAAAAAAAEBE/0JDzs62DK78/s1600/Food+Stamp+Obama.jpg



:elvis:

The flavor of the month bullshit artist. We might vote in the next bullshit artist in November. It's easy to tell the citizens to buck up and pay their fair share when you live in a pampered bubble. I doubt the guy even knows what's really going on or really cares.

[Dr. Love]

Or... we could scale back expenditures to the point where the federal government doesn't need so much money, starting with money we use to occupy other countries, attack other countries, defend other countries and give away to other countries.

[Seshmeister]

I would love to see the income tax scrapped and just have a VAT tax with food being exempt. Of course the income tax creates a huge tax preparation industry and creates lot's of jobs but it's a bunch of bullshit. Everyone should pay some tax and I think it's fair because the rich buy more so they will pay more.



Firstly it's not fair because rich people pay a lower amount because less of their income gets spent on things which will attract VAT.

A typical family with $15,000 per year take-home pay spends about 75% of their income on items subject to the sales tax.
A typical family with $100,000 per year take-home pay spends only about 25% of their income on items subject to the sales tax.

Secondly I doubt the books would balance. Here VAT is 20% and brings in less than income tax so you could be looking at a 50% VAT rate if you abolish income tax.

Also VAT is notorious for the scams that can be done. There are estimates that Britain gets defrauded by many billions every year from VAT cons.

[ZahZoo]

the one problem with the argument that certain lower income people pay nothing in income taxes is that it usually ignores that they pay social security and medicare taxes.

for a parent with 2 kids earning $30,000 a year, $1800 is a lot of moeny, but that's the amount of social security taxes they pay. so even if they don't pay another dime in income taxes, taxes still strongly affect them.

That's a valid point but... Social Security/Medicare taxes are applied at flat rate across the board (currently 4.2% for SS and 1.5% for MC) based on employment income up to $110K. IMO that's paying your fair share.

Using your example and simple math and tax tables... 2 families with 2 kids, married filing jointly. Income rate is gross adjusted.

$30k pays $1710 in SS/MC after deductables/tax credits pays about $900 in Federal taxes. 5.7% + 3% = 8.7% Fed income tax

$130K pays $6275 in SS/MC after deductables/tax credits pays about $24,750 in Federal taxes. 5.7% + 19% = 24.7% Fed income tax

The SS/MC is fair and proportional... but why should the higher income earner have to pay 3x more than the lower in proportion to earnings. Closing that gap is what "paying your fair share" should be about. The gap grows even bigger the higher up your income.

Maybe silly... but if we shifted the graduated tax rates to investment income and locked employment income in at 15% period... then I believe the tax burden would be much more fair. Most likely would better fund the government and put more spending money in the wallets of people who need it. Thus helping the economy directly.

[knuckleboner]

That's a valid point but... Social Security/Medicare taxes are applied at flat rate across the board (currently 4.2% for SS and 1.5% for MC) based on employment income up to $110K. IMO that's paying your fair share.

Using your example and simple math and tax tables... 2 families with 2 kids, married filing jointly. Income rate is gross adjusted.

$30k pays $1710 in SS/MC after deductables/tax credits pays about $900 in Federal taxes. 5.7% + 3% = 8.7% Fed income tax

$130K pays $6275 in SS/MC after deductables/tax credits pays about $24,750 in Federal taxes. 5.7% + 19% = 24.7% Fed income tax

The SS/MC is fair and proportional... but why should the higher income earner have to pay 3x more than the lower in proportion to earnings. Closing that gap is what "paying your fair share" should be about. The gap grows even bigger the higher up your income.

Maybe silly... but if we shifted the graduated tax rates to investment income and locked employment income in at 15% period... then I believe the tax burden would be much more fair. Most likely would better fund the government and put more spending money in the wallets of people who need it. Thus helping the economy directly.

i hear you, but i think the problem is on a micro level, the family of 4 is barely scraping to get by as it is. increasing their taxes hurts their ability to full provide.

on the macro level, you pull money out of a lower / middle income family, and you're directly pulling cash out of consumption - economic expansion. with a higher tax rate, wealthier people reduce investment more than they reduce consumption. true, you want investment in an economy, but without consumption, it doesn't really matter.

if it's a zero-sum game, and you've got to get the revenue from somewhere, i think it makes perfect sense to have a graduated income tax.

that doesn't necessarily mean today's rates are the right ones, or that spending couldn't be more limited. but at the end of the day, a lower income family paying 10% in effective taxes is impacted far more than an upper income paying an effective 25%.