Prosperity Lost

Let's take two examples. And let's make a realistic comparison -- you'll need about a 30% tax rate to just get the same revenues as the current tax system.

Family A makes $20,000. They can't afford to save a dime, in fact they don't have enough to pay for basic things like health care and education.

They spend all their money. In effect they spend about 15,400, and pay about 4,600 (which is 30% of 15,400) in taxes, money they desparately need to pay for necessities they are doing without. That gives them an effective tax rate of about 23% (4600/20,000).

Family B makes $20,000 [edit: should be $20 million]. They save and invest $10 million and spend $10 million. Of that $10million they spend, about 2.3 million is taxes, the balance or 7.7 million is for products and services. Obviously Family B is not sacrifices health care or junior's education to pay the tax!

The effective tax rate for Family B is 2.3m/20m or 11.5%

Now, I personally don't think that a system in which a family making $20k and paying a higher tax rate with money they desparately need for necessities than a family making $20 million in any way is fair, and I really don't see how any one else could either.

Unless your goal is to make the rich richer at the expense of keeping the poor poorer, which IMO is exactly the goal of lots of folks who promote such tax plans.

How can Family B save $10 million if they only make $20,000? That would take 500 years if they saved every penny. And the tax numbers are just made up, so let's make up some numbers based on a consumption tax.

Typo, I'm sorry. Family B makes $20 million. Does it make more sense now?

Family A tax: $20,000 * 0.15 = $3,000
Family B tax: $10M * 0.15 = $1,500,000

15% is not a realistic replacement tax figure. A 15% tax on gross income of $12 million gives you $1.8T in revenues, well below the $2.5T the Govt took in last year. And since you are taxing only expenditures, the revenues will be lower than even that because not all income is spent, some is invested.

Same percentage, different tax amounts.

Oh, I see. You want to tax the rich at a greater rate because they make more money and you call that 'fair'. And obviously you want to redistribute the wealth so that the rich send their money to the poor. Well, your idea of 'fair' is different from mine. Not that there's anything wrong with it!

Of course.

IMO it is not fair to expect a family of 4 making $20,000 to pay an equal tax rate with monies they need for necessities, than a family of 4 making $20 million to pay a lower rate with money they have for luxuries.

A higher tax rate on the family making $20k means they do without basic necessities, like health care, education, transportion, etc. The higher rate on a family making $20 million means they might have to get a smaller yacht, but they are not doing without basics.

How is taxing them at the same rate possibly "fair"?

If you tax yachts at a higher rate, nobody will buy yachts and the yacht makers will fire all of their employees. We've already seen that happen.

We aren't going to get anywhere debating this issue. You don't think taxing people at the same rate is fair even though more wealthy people will pay more total dollars in taxes. I do. I believe that taxing people at different rates goes against the very fiber of our Nation. How can we be a free country if some people are taxed at a higher rate than others? Why should someone who works harder and makes more money be expected to pay a higher rate? That doesn't make logical sense to me and is at the very least oppressive.
 
That is because far too many liberals, while reaping the benefits of a free market system, fail to actually understand how those benefits are created. They then wrap their intellectually flaccid minds around the pre-packaged political slant on what the free market is, and isn't, and march along to that tune like happy monkeys to the organ grinder's message, crying out the mind numbing phrases equating success with evil and working class with nobility, when each are not always the exclusive right of the other.

America is being nailed to the cross of liberalism, mocked and ridiculed, gutted and bled, and the nation is left shaking its weary head and crying out, "Forgive them - they know not what they do."

I get really, reallly pissed off when I see comments blaming ONLY LIBERALS for anything. It's an implication that you people 'hope' will be read by the more stupid and they will believe it.


I get really, reallly pissed off when I see comments blaming ONLY CONSERVATIVES for anything. It's an implication that you people 'hope' will be read by the stupid and they will believe it. Do you see the irony here, Maggie?

Of course I don't get to read everything posted here 24/7, but my experience thus far has been that us so-called "liberals" (meaning collectively anyone at all supporting Obama) believe, and so state, that the economic meltdown resulted from poor decisions by BOTH parties, not just "liberals."
 
How can Family B save $10 million if they only make $20,000? That would take 500 years if they saved every penny. And the tax numbers are just made up, so let's make up some numbers based on a consumption tax.

Typo, I'm sorry. Family B makes $20 million. Does it make more sense now?



15% is not a realistic replacement tax figure. A 15% tax on gross income of $12 million gives you $1.8T in revenues, well below the $2.5T the Govt took in last year. And since you are taxing only expenditures, the revenues will be lower than even that because not all income is spent, some is invested.

Same percentage, different tax amounts.

Oh, I see. You want to tax the rich at a greater rate because they make more money and you call that 'fair'. And obviously you want to redistribute the wealth so that the rich send their money to the poor. Well, your idea of 'fair' is different from mine. Not that there's anything wrong with it!

Of course.

IMO it is not fair to expect a family of 4 making $20,000 to pay an equal tax rate with monies they need for necessities, than a family of 4 making $20 million to pay a lower rate with money they have for luxuries.

A higher tax rate on the family making $20k means they do without basic necessities, like health care, education, transportion, etc. The higher rate on a family making $20 million means they might have to get a smaller yacht, but they are not doing without basics.

How is taxing them at the same rate possibly "fair"?

If you tax yachts at a higher rate, nobody will buy yachts and the yacht makers will fire all of their employees. We've already seen that happen.

I of course never said anything about taxing yachts, but taxing income.

But sure. With a more progressive taxes, the megayacht makers in Italy might see a decline in activity. But then again we might see more auto purchases as lower income families paying less tax can afford a second car.

We aren't going to get anywhere debating this issue. You don't think taxing people at the same rate is fair even though more wealthy people will pay more total dollars in taxes. I do. I believe that taxing people at different rates goes against the very fiber of our Nation. How can we be a free country if some people are taxed at a higher rate than others? Why should someone who works harder and makes more money be expected to pay a higher rate? That doesn't make logical sense to me and is at the very least oppressive.

You're right this is repetitive and has been previously addressed.
 
I get really, reallly pissed off when I see comments blaming ONLY LIBERALS for anything. It's an implication that you people 'hope' will be read by the more stupid and they will believe it.


I get really, reallly pissed off when I see comments blaming ONLY CONSERVATIVES for anything. It's an implication that you people 'hope' will be read by the stupid and they will believe it. Do you see the irony here, Maggie?

Of course I don't get to read everything posted here 24/7, but my experience thus far has been that us so-called "liberals" (meaning collectively anyone at all supporting Obama) believe, and so state, that the economic meltdown resulted from poor decisions by BOTH parties, not just "liberals."

Perhaps you should do a little more reading then. Because it's the same on both sides...including you, Maggie. Your not above the fray.
 
Please post a link for this. Thanks.

here ya go!

ataxingmatter: Tax Foundation and Competitive Environments: more bunk!

sorry i am so LATE in getting back to you! i meant to link this before i went to florida for the month, then completely forgot about it!

care

That's more of an editorial. Do you have something with actual data?

here is a more analytical one that has links to the actual numbers....it explains a great deal...of why our taxing system stinks, basically! the rate is higher than the 6% quoted in the editorial but less than 1/3 of the 40% being quoted by those on the right side of the aisle.... :)

Putting U.S. Corporate Taxes in Perspective — Center on Budget and Policy Priorities
 
Yes, calling these tax policies by the Administration which they occured is misleading, I quite agree.

Corporations, however, are entities which in some weird kind of legal way are treated similarly to individuals. (hey don't blame me, blame the supreme court!)

So I don't think it's necessarily wrong to say that a corporation is pay taxes.

Because that entity IS paying taxes


You can differ without begging. Well...okay, you can beg if you want.


For example, were the government to raise taxes on on a corporation by 100% (not a 100% tax rate, but a 100% increase in their tax rate), I guarantee you that the price of their product would increase, thus rendering that corporation a tax collector, not a tax payer. To call it anything else is (in my humble opinion) is intellectually dishonest.

I don't realy understand your point. Or at least I don't understand your point as you've directed it to what I just wrote.

It doesn't seem to in any way address my points, MM.

What exactly is intellectually dishonest? I merely stated the facts as they exist today.

I called the taxes that entities called corporations pay "TAXES" because that's what they are...taxes on that entity.

Corporations are ENTITIES which have RIGHTS just as individuals have.

You can disagree, but your disagreement isn't with me ... it's with the Supreme Courts which gave them that legal status.

Were it up to me, I would drastically change that policy.

But were it up to me, when a corporation got sued if that suit bankrupted the corporation, then the plantiffs could go after the stockholders assets, too.

THEN it might make sense NOT to tax corporations since they wouldn't be an ENTITY unto itself, like they are now.

So before you decide that you don't want corporations to have the same responsibilities to pay taxes as we citizens have, you may want consider that corporations also give the stock holders many advantages that mere business owners don't get.

I merely stated the facts as they exist today.
Raise taxes on a corporation, and they will raise their prices to offset that tax. They are tax collectors, not tax payers.
 
here ya go!

ataxingmatter: Tax Foundation and Competitive Environments: more bunk!

sorry i am so LATE in getting back to you! i meant to link this before i went to florida for the month, then completely forgot about it!

care

That's more of an editorial. Do you have something with actual data?

here is a more analytical one that has links to the actual numbers....it explains a great deal...of why our taxing system stinks, basically! the rate is higher than the 6% quoted in the editorial but less than 1/3 of the 40% being quoted by those on the right side of the aisle.... :)

Putting U.S. Corporate Taxes in Perspective — Center on Budget and Policy Priorities

Interesting link to the World Bank and PricewaterhouseCoopers, “Paying Taxes 2008: the Global Picture” study. The total tax rate was higher than I expected for the US: 46.2%. Compare that to a booming country like Ireland: 28.9%. That explains a lot. What is common among all growing economies is that government are reducing the tax burden on corporations. I guess they finally discovered this would help their country. If you make the tax burden too high, there will be sluggish growth and corporations will move some operations off-shore. That's what's been happening in the US for decades.

The main article you linked didn't explain where they got their numbers. I couldn't find anything in the references. Odd.

This was another great reference: “America the Uncompetitive.”

Moral to the story: taxes American corporations have to pay are too high.

Thanks again for the link.
 
the person buying the product or service is the one paying the corporate taxes, which is how it should be.

the taxes are only paid on pure profit made, not on their revenues generated....so even though as per your example a corporation may be taxed at a 30% rate, their effective tax rate averages only 6%, once they take all of their deductions....which is one of the LOWEST corporate tax rates in the world.

corporate taxes for most our history in collecting taxes, paid for 1/2 of our tax burden as a country and corporate taxes now only pay for 10-20% of our total tax burden while income taxes now pay for a greater portion of our tax burden because of the major lowering of corporate tax rates.

I'm not certain how this relates to your article, but these are important facts that should be known and a quick google of corporate tax history could serve to enlighten one on the topic.

Care

Care, you've mixed the scenarios; the 30% tax rate (you) mentioned was for an individual's income (repairing a computer) going for taxes, and not a corporation's, so the ratios apply as stated. Secondly, the fact that such a small part of revenue is gained from taxing corporations, suggests that it shoud be abandoned. And although the corporate tax rate is applied to net corporate income, and not to gross sales/income, it still has to be made up for in the margin, where it is much more than the 6% you mentioned. There is a reason that Ireland with the lowest corporate tax rate in Europe has the fastest growing economy in Europe (and N.A.)
mustang....

BOTTOM LINE,

corporate taxes on average are ONLY 6%.

The less you tax corporations, the MORE you will have to tax other individuals....do you think you should be paying more in taxes so that corporations or the owners of corporations can pay less? yes, or no?

If you eliminate corporate taxes, then no taxes will be paid on the profits of corporations untill the owners sell their stock and even then it would be taxed at the lower capital gains rate of 20%, so essentially the owners of these corporations pay no taxes what so ever, if they hold on to their stock until they die and they can pass on $3.5 million of their stock on to their heirs without any taxes at all being paid on it....do you really think this is fair while the rest of us pay taxes on most every dime of what we earn by working hard?

The example that was given, if it was about something an individual made and then sold, it falls under the same scenario....they are not taxed at 30% of their sale price of the item, they are taxed ONLY ON THE PROFIT they made off of the item and this is after all of his expenses like his overhead, payroll, cost of goods to produce, reinvestment in the business, etc are paid.

Care

Corporations don't pay taxes. They pass the cost along in the goods or services they provide therefore, increasing their taxes, only increases the burden on the consumer, which is a large portion, the middle class. Trying to make corporations make up for massive spending of the government by raising corporate taxes does not have the affect you would think it does.
 
the person buying the product or service is the one paying the corporate taxes, which is how it should be.

the taxes are only paid on pure profit made, not on their revenues generated....so even though as per your example a corporation may be taxed at a 30% rate, their effective tax rate averages only 6%, once they take all of their deductions....which is one of the LOWEST corporate tax rates in the world.

corporate taxes for most our history in collecting taxes, paid for 1/2 of our tax burden as a country and corporate taxes now only pay for 10-20% of our total tax burden while income taxes now pay for a greater portion of our tax burden because of the major lowering of corporate tax rates.

I'm not certain how this relates to your article, but these are important facts that should be known and a quick google of corporate tax history could serve to enlighten one on the topic.

Care

Care, you've mixed the scenarios; the 30% tax rate (you) mentioned was for an individual's income (repairing a computer) going for taxes, and not a corporation's, so the ratios apply as stated. Secondly, the fact that such a small part of revenue is gained from taxing corporations, suggests that it shoud be abandoned. Thirdly, although the corporate tax rate is applied to net corporate income, and not to gross sales/income, it still has to be made up for in the margin, where it is much more than the 6% you mentioned. Finally, there is a reason that Ireland with the lowest corporate tax rate in Europe has the fastest growing economy in Europe (and N.A.) -
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Perhaps you should also look at the educational policy in Ireland. I would reccomend that we emulate that policy.
 
Care, you've mixed the scenarios; the 30% tax rate (you) mentioned was for an individual's income (repairing a computer) going for taxes, and not a corporation's, so the ratios apply as stated. Secondly, the fact that such a small part of revenue is gained from taxing corporations, suggests that it shoud be abandoned. And although the corporate tax rate is applied to net corporate income, and not to gross sales/income, it still has to be made up for in the margin, where it is much more than the 6% you mentioned. There is a reason that Ireland with the lowest corporate tax rate in Europe has the fastest growing economy in Europe (and N.A.)
mustang....

BOTTOM LINE,

corporate taxes on average are ONLY 6%.

The less you tax corporations, the MORE you will have to tax other individuals....do you think you should be paying more in taxes so that corporations or the owners of corporations can pay less? yes, or no?

If you eliminate corporate taxes, then no taxes will be paid on the profits of corporations untill the owners sell their stock and even then it would be taxed at the lower capital gains rate of 20%, so essentially the owners of these corporations pay no taxes what so ever, if they hold on to their stock until they die and they can pass on $3.5 million of their stock on to their heirs without any taxes at all being paid on it....do you really think this is fair while the rest of us pay taxes on most every dime of what we earn by working hard?

The example that was given, if it was about something an individual made and then sold, it falls under the same scenario....they are not taxed at 30% of their sale price of the item, they are taxed ONLY ON THE PROFIT they made off of the item and this is after all of his expenses like his overhead, payroll, cost of goods to produce, reinvestment in the business, etc are paid.

Care

Corporations don't pay taxes. They pass the cost along in the goods or services they provide therefore, increasing their taxes, only increases the burden on the consumer, which is a large portion, the middle class. Trying to make corporations make up for massive spending of the government by raising corporate taxes does not have the affect you would think it does.

He's right - listen to him.

Eliminate corporate taxes. Crack up the tax rates on the multi-millionaire CEOs and shareholders instead.

Follow Reagan's policy and make investment taxes the same rate as income taxes.
 

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