Why "Soaking the Rich" in taxes does not work - explained with BEER!

[auditor0007]

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...





No one pays 59% tax on income.

I thought he was talking about the percentage of the total federal taxes paid; I wouldn't be surprised if the top 10% are paying at least 60% of the tax revenues.

Kiplinger.com

Speaking only about income taxes, it appears the top 10% pay 70% of income taxes while the bottom 50% pay about 3%. So, talking only about income taxes, this beer story doesn't quite fit with the real world.

Of course, that's strictly speaking about just income taxes, and there are many more taxes we all pay. I'm looking for a site that shows combined totals for all income levels.

Why is it that Conservatives only show us less than half of the tax equation? Income taxes don't even account for one half of all federal taxes. When you include all forms of federal taxes, those numbers change drastically and show the real picture. In many cases, they top 1% are paying a much smaller percentage than most people in the middle class.

 

[Ravi]

btw, they should have beat up the bar owner for overcharging them all those years.

 

[Moonglow]

the rich should pay more in taxes. they earn more. the rich do not need more tax cuts, unless they employ more people in the USA and not China or any other low paying country.
It is us self employed hard workers that hire the majority of the people in the USA. Tax cuts and corporate welfare should go to us.

 

[DontBeStupid]

I thought he was talking about the percentage of the total federal taxes paid; I wouldn't be surprised if the top 10% are paying at least 60% of the tax revenues.

Kiplinger.com

Speaking only about income taxes, it appears the top 10% pay 70% of income taxes while the bottom 50% pay about 3%. So, talking only about income taxes, this beer story doesn't quite fit with the real world.

Of course, that's strictly speaking about just income taxes, and there are many more taxes we all pay. I'm looking for a site that shows combined totals for all income levels.

Why is it that Conservatives only show us less than half of the tax equation? Income taxes don't even account for one half of all federal taxes. When you include all forms of federal taxes, those numbers change drastically and show the real picture. In many cases, they top 1% are paying a much smaller percentage than most people in the middle class.

Exactly!

I can't find a site that will show the combined, but clearly we all know that anyone working pays 6.2% in FICA up to $106,800 (right? that's the current cap, right?). So, that bottom 50% pay 6.2% of their incomes in FICA, while that guy at the top making $380,000 pays only 1.7% of his income in FICA [ ($106,800 * 0.062) / $380,000 = 0.017425 ]

 

[RDD_1210]

And where in this story does it outline the amount of beer that each man gets to consume? That's a major factor here, no? Are you implying they all get the same amount of beer?

Terrible analogy on many levels, but this omission should be enough to question the validity of this cute little story.

 

[Too Tall]

Kiplinger.com

Speaking only about income taxes, it appears the top 10% pay 70% of income taxes while the bottom 50% pay about 3%. So, talking only about income taxes, this beer story doesn't quite fit with the real world.

Of course, that's strictly speaking about just income taxes, and there are many more taxes we all pay. I'm looking for a site that shows combined totals for all income levels.

Why is it that Conservatives only show us less than half of the tax equation? Income taxes don't even account for one half of all federal taxes. When you include all forms of federal taxes, those numbers change drastically and show the real picture. In many cases, they top 1% are paying a much smaller percentage than most people in the middle class.

Exactly!

I can't find a site that will show the combined, but clearly we all know that anyone working pays 6.2% in FICA up to $106,800 (right? that's the current cap, right?). So, that bottom 50% pay 6.2% of their incomes in FICA, while that guy at the top making $380,000 pays only 1.7% of his income in FICA [ ($106,800 * 0.062) / $380,000 = 0.017425 ]

Both of the people in your example pay the same dollar amount for their old age INSURANCE policy (FICA) and both will get the same dollar amount at age 65.

Insurance payouts are based on the amount of the premium paid for the insuance, not the amount of your income.

 

[DontBeStupid]

Both of the people in your example pay the same dollar amount for their old age INSURANCE policy (FICA) and both will get the same dollar amount at age 65.

You should look up how Social Security payments work. Those two people do NOT get the same amount at age 65.

 

[Antiderivative]

The rich soak up America. Hence why many of them are nothing but the long arm of government.

For example, we just witnessed a financial coup de etat and rewarded it.

When will you rw kooks acknowledge this most pertinent fact?

 

[Remodeling Maidiac]

Why is the beer empty? That in and of itself is a crime.

 

[Too Tall]

Both of the people in your example pay the same dollar amount for their old age INSURANCE policy (FICA) and both will get the same dollar amount at age 65.

You should look up how Social Security payments work. Those two people do NOT get the same amount at age 65.

They both had 6.2% withheld on the first $106,800 they earned this year,and assuming that they had earned and continue to earn the maximum for their working career, they will get the exact same amount.

You pay the premium at the top rate, you get the maximum benefit. That is how social Security works.

 

[Ravi]

Both of the people in your example pay the same dollar amount for their old age INSURANCE policy (FICA) and both will get the same dollar amount at age 65.

You should look up how Social Security payments work. Those two people do NOT get the same amount at age 65.

They both had 6.2% withheld on the first $106,800 they earned this year,and assuming that they had earned and continue to earn the maximum for their working career, they will get the exact same amount.

You pay the premium at the top rate, you get the maximum benefit. That is how social Security works.

That's also how the progressive tax rate works.

It probably shouldn't, but it does. People that itemize, read: those that make more money, in the long run get a bigger tax break.

This is why you never hear rich people arguing for a flat tax.

 

[Too Tall]

You should look up how Social Security payments work. Those two people do NOT get the same amount at age 65.

They both had 6.2% withheld on the first $106,800 they earned this year,and assuming that they had earned and continue to earn the maximum for their working career, they will get the exact same amount.

You pay the premium at the top rate, you get the maximum benefit. That is how social Security works.

That's also how the progressive tax rate works.

It probably shouldn't, but it does. People that itemize, read: those that make more money, in the long run get a bigger tax break.

This is why you never hear rich people arguing for a flat tax.

There is a considerable difference between the tax code and Social Security. Social Security payments are determined on gross income to a pre-determined maximum, taxes on adjusted gross income. The itemized deductions have been around longer than I have.

The point that liberals try to make is that they want those that make more than $106,800 this year in gross income should continue to pay the 6.2% Social Security tax but will not get an increase in their benefit at age 65.

That is like saying the premium on a $100,000 life insurance policy should be based on a persons income.

 

[Big Fitz]

[ame=http://www.youtube.com/watch?v=9ZDhev_F1u4]YouTube - ‪TOM T HALL-I LIKE BEER.wmv‬‏[/ame]

 

[Big Fitz]

Obviously the idea that the tenth man is rich enough to stop going to the bar offends liberal sensibilities and he must be stopped.

 

[Quantum Windbag]

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

No one pays 59% tax on income.

Neither did anyone in the example. the guy paid 59% of the total bill.

 

[Quantum Windbag]

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...





No one pays 59% tax on income.

I thought he was talking about the percentage of the total federal taxes paid; I wouldn't be surprised if the top 10% are paying at least 60% of the tax revenues.

Doubtful.

If he were talking about the total federal taxes paid there would not be four men that paid nothing.

There were.

 

[bripat9643]

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

No one pays 59% tax on income.

You really showed everyone what a rocket scientist you are with that response.

 

[auditor0007]

They both had 6.2% withheld on the first $106,800 they earned this year,and assuming that they had earned and continue to earn the maximum for their working career, they will get the exact same amount.

You pay the premium at the top rate, you get the maximum benefit. That is how social Security works.

That's also how the progressive tax rate works.

It probably shouldn't, but it does. People that itemize, read: those that make more money, in the long run get a bigger tax break.

This is why you never hear rich people arguing for a flat tax.

There is a considerable difference between the tax code and Social Security. Social Security payments are determined on gross income to a pre-determined maximum, taxes on adjusted gross income. The itemized deductions have been around longer than I have.

The point that liberals try to make is that they want those that make more than $106,800 this year in gross income should continue to pay the 6.2% Social Security tax but will not get an increase in their benefit at age 65.

That is like saying the premium on a $100,000 life insurance policy should be based on a persons income.

Social Security is not life insurance nor is it an investment plan.

 

[Annie]

The problem with your analogy is you assume they are all drinking the same amount of beer. In our society the tenth man claims most of the beer for himself and then leaves the rest to fight over a few sips

Really? When was the last time you took someone out for dinner? Did they order the most expensive thing on menu and you the least? Be honest now...

 

[snjmom]

How about another analogy?

Ten men appear in court for murder charges.

The first four men (the poorest) get the death penalty.
The fifth gets 350 yrs.
The sixth gets 250 yrs.
The seventh gets 100 yrs.
The eighth gets life without parole.
The ninth gets 25 - life.
The tenth man (the richest) makes a donation to the DA's campaign, his indictment is squashed and he has lunch with judge while playing a round of golf.

Cause you get the government that you pay for.