I agree with your basic pts below about payroll taxes. I'm not opposed to the idea of a flat tax across all income groups, but it seems the macroeconomic and politic situation has been biased against the middle class in favor of the upper 1% for about 25 yrs now, all the numbers show this growing disparity within the country which I think is starting to have deeper social and cultural impacts as well as economic, so I'd like to see tax rates change for maybe 2 administrations to even the playing field in favor or the majority middle class, and then talk about a flat tax. But I would not raise capital gains taxes, which the rich hate even more, but would close all offshore corporate loopholes tightly.
This may be all moot as I see no way the US ever gets close to a balanced budget again, so we'll keep adding on the $9 trillion in debt and someday soon, the credit karma will hit bigtime. --- In FairfieldLife@yahoogroups.com, "shempmcgurk" <[EMAIL PROTECTED]> wrote: > > --- In FairfieldLife@yahoogroups.com, "boo_lives" <boo_lives@> > wrote: > > > > --- In FairfieldLife@yahoogroups.com, "shempmcgurk" <shempmcgurk@> > > wrote: > > > > > > > > > If elected, both Hillary and Barack say they'll put up the income > tax > > > rates for the rich. > > > > > > Yet, according to the statistics at the following site > > > http://tinyurl.com/3cquum <http://tinyurl.com/3cquum> the rich > are, by > > > ANY objective standard of measurement, already paying far more > than > > > their share. > > > > > > Take a look at Table 1 (which, hopefully, I am successful in > reproducing > > > here, below) and look under the column "Group's share of income > > > tax". The top 1% of taxpayers pay almost 40% of ALL income taxes > > > collected! The top 10% pay over 70% and the bottom 50% about 3%. > > > > > People not familiar with working with numbers and percentages will > be > > impressed by the above, but obviously a percentage of an extremely > > high number will be much higher than a percentage of a low number. > > > > The key is the percentage. The chart shows the top 1% paying a tax > > rate of 23% compared to an average tax rate of 12.5%. Actually > that's > > not fair either, as the chart does not take into the highly > regressive > > payroll tax and 4 out of 5 taxpayers now pay more in payroll taxes > > than in income taxes. > > > > > Yes, you are correct that the reproduced chart is limited to "income > taxes" and not "payroll taxes" (i.e. FICA, of which the employee pays > 50% and the employer pays the other 50%...or if you're like me and > self-employed you pay 100% of FICA). The payroll tax is a flat rate > of 7.65% for the first approximately $85,000 of adjusted gross income > (the figure is probably off somewhat because I'm too lazy to look up > the exact figure). > > So, as boo_lives correctly points out, the payroll tax is REGRESSIVE > because after you reach the ceiling of $85,000 in AGI, there is no > more payroll tax to pay, no matter how much income you have in a > year. So, as a percentage of income, the person earning $10 million > a year will pay LESS than his secretary earning $50,000 a year in > payroll taxes. Indeed, this is the very example that Warren Buffet > used to support his contention that the AGI ceiling for payroll taxes > should be raised. > > But here's the thing: the payroll "tax" works differently from the > way income taxes work in a very, very important way: how one benefits > from it. Unlike all other expenditures by the government, the > payroll tax (of which about 80% is a contribution to Social Security > and about 20% to Medicare), what you get back in benefits is tied in > to what you pay in to the system. For Social Security, the more you > pay in, the more you get back in your retirement years. For > Medicare, once you reach a certain number of quarters that you have > at least contributed 1 cent, you get the full Medicare benefits once > you reach the age of, I think, 62 or 65. It's an on/off type of > benefit system. > > Payroll tax, therefore, SHOULD be kept separate from considerations > of statistics, as reproduced as discussed here, because the way it is > taxed and the way the benefits are given out are completely different > than regular income taxes. With regular income taxes, all > beneficiaries (i.e., everyone living in the United States) are equal > and benefit equally. Not the case with payroll taxes and, hense, why > we examine and treat their respective statistics separately. > > Their discussion should NOT be combined without this caveat. > > > > > > > So the difference is tax rates paid by the > > richest 1% (whom obama and clinton intend to raise) is somewhere > > around 5% higher than average. > > > > First point: when you are talking about tax rates, you are talking > about the average rate an invidual or demographic group pays that is > an average of ALL the 6 federal marginal tax rates that that > individual or group is paying. > > Secondly, as I point out above, it simply is not right or fair to > combine payroll taxes and income taxes into a comparison. > > > > > > > > That isn't much difference. Plus keep > > in mind that wealth disparity has been increasing rapidly in the US > > since the middle 1970s, and now the top 1% own about 40% of all > wealth > > in the country, so their share of taxes seems about right. > > > > Who cares whether the top 1% owns MORE of a percentage of the wealth > of the country? As long as the people in the LOWER income groups are > increasing in the percentages of ownership of the country, I care not > a whim what the rich get. > > The free market economy is not a zero-sum gain. When the rich get > richer this can be a GOOD THING if they drag the poorer people and > those on the lower income rungs up with them. If the disparity > between rich and poor increases, who cares as long as the lot of the > poor increases. > > > > > > > > Wealth disparity is a social issue as well. CEOs used to make about > > 40 times more than the average worker in the 70s but it's close to > 400 > > times more. Wealth disparity is highest in the US compared to all > > other industrialized countries. > > > Good! > > And that disparity should INCREASE...let it go up to 1,000 from 400 > if we drag the poorest of the poor up with the rich. > > > > > > > > Finally there's the issue of the gov't actually paying for what it > > spends. The federal debt is over $9 trillion and clearly going > > higher. The 3 republican presidents of Reagan, Bush1 and Bush2 have > > increased the federal debt by about $6.5 trillion dollars. I'm fine > > with giving republicans their tax cuts as long as they don't just > > shift the burden of ultimately paying for them to our children. > > > Well, on this I of course agree completely. > > Look at Canada. Not only have they balanced their budget but they > create a surplus every year in order to pay DOWN their national > debt. Of course, that has worked against them because this fiscal > responsibility make their dollar stronger against the U.S. dollar, > thus weakening their exports to the U.S. ... and since U.S. exports > make up 85% of ALL Canadian exports, they are realy hurting over this. > > > > > > > Of course I remember my discussion with a fairly high reagan > appointee > > in the 80s - I told him my concerns about lowering taxes while > > increasing spending and the problem of ultimately bankrupting the > > country. He smiled and replied - bankrupting the govt is not a > > problem, it's our goal! > > > Amen to that...although I don't think the kind of fiscal > irresponsibility you correctly cite above is the way to accomplish > that. > > > > > >
