What should the highest income tax rate be?

[kaz]

I support not initiating any new spending that is not paid for with new taxes, and not initiating any new tax cuts that are not paid for with reduced spending,

and letting us grow out of the deficit.

My fantasy is shared by a group of people who wrote a document 215 years ago detailing how their fantasy should work.

What's truly a fantasy though is your idea that you can at the same time endlessly keep your foot on the floor of increased government spending while at the same time taking the gas from the engine that feeds the economy by taking it from the evil rich and the evil corporations who drive productivity and provide jobs.

Actually for what you are doing fantasy isn't the word. The word is delusion. And no matter how bad the economy gets, you don't even start to question why what you are doing doesn't ever lead to what you say will happen.

It's unwise to want to pay as we go for government?

Um ... yeah ... that's what my point was ...

 

[NYcarbineer]

My fantasy is shared by a group of people who wrote a document 215 years ago detailing how their fantasy should work.

What's truly a fantasy though is your idea that you can at the same time endlessly keep your foot on the floor of increased government spending while at the same time taking the gas from the engine that feeds the economy by taking it from the evil rich and the evil corporations who drive productivity and provide jobs.

Actually for what you are doing fantasy isn't the word. The word is delusion. And no matter how bad the economy gets, you don't even start to question why what you are doing doesn't ever lead to what you say will happen.

It's unwise to want to pay as we go for government?

Um ... yeah ... that's what my point was ...

Go back and read my post and tell me how you get any of the above from it.

 

[NYcarbineer]

Flat tax means flat rate, not a flat payment amount.

It's an alternative to our ridiculous progressive system, which is a combination of increasing tax rates offset by deductions. You eliminate the deductions and the increasing rates and it's a far simpler calculation.

Though it's not as simple as the flat taxers say because it only flattens income rates, it doesn't eliminate all the other taxes and you still have to figure out your investment taxes.

Well people go on and on about how fair the flat tax is supposed to be. Paying ten times more for your government than someone else pays for their government isn't 'fair', if 'fair' were the real issue.

You can simplify the tax code without flattening it. The calculation on how much you owe is just as easy with progressive rates as it is with a flat rate; the tax tables are based on the progressive rates,

all you have to do is look up your tax.

You thought the issue we have with progressive rates was calculating the tax?

Seriously?

People keep saying we need to go to the flat tax in order to simplify the system.

That is not true.

 

[kaz]

Well people go on and on about how fair the flat tax is supposed to be. Paying ten times more for your government than someone else pays for their government isn't 'fair', if 'fair' were the real issue.

You can simplify the tax code without flattening it. The calculation on how much you owe is just as easy with progressive rates as it is with a flat rate; the tax tables are based on the progressive rates,

all you have to do is look up your tax.

You thought the issue we have with progressive rates was calculating the tax?

Seriously?

People keep saying we need to go to the flat tax in order to simplify the system.

That is not true.

OK, so I get now what you don't understand.

Our system now is progressive taxes with lots of deductions. Flat tax is flat tax with no deductions. No one was talking about that they couldn't calculate a progressive tax. It's simpler because there are no deductions. However, if you kept the progressive tax and eliminated the deductions, you and almost everyone else would be out of a job.

Get it now? I'm betting no, but you never know.

 

[eagle1462010]

I wasn't talking about corporate taxes. Your company has to pay you enough to pay your income taxes. Your salary is not calculated regardless of the taxes you pay.

Let's say you got a graduate degree, work experience and are reliable.

Joe didn't do any of that. You're worth three times what Joe is.

Your expected tax rate is 25%. Joe's is 0%.

Joe makes $10 an hour.

Well, you then have to make $40 an hour. You pay 25% tax, and you get the $30 an hour that is three times Joe.

If your company does not pay you $40 an hour, then you will not work for them. You're three times as valuable as Joe economically. You're not going to work for $30 and just give 25% of what you're worth to the government.

Your company collects that money from their customers, it's baked into the price of their product. If they can't, they go bust.

So, your company can do that, or they can go off shore or they can automate. Or an overseas competitor who doesn't have to pay $10 an hour to you to pay your taxes can beat them.

Money does not appear from nowhere and it doesn't go nowhere.

That's absurd. You are pulling numbers out of no where. If I'm making $30 now and pay taxes I'll make the same under the new law. Taxation rates don't set your pay scale.

You are also using prorated data. I said nothing about that. The 15% tax rate would hardly change my net income at all if it happened right now. Either way I pay taxes, it's just that one is simple and one requires some time filing my taxes.

I prefer the simple way. It's not going to affect my pay scale.

Pulling numbers out of no where? I walked you through the math, stop being ridiculous.

So seriously, you would spend tens of thousands of dollars a year and bypass years of earnings to get a degree, work hard, work at night, take more responsibility at work. So you can give the money to Obama. You can pay more taxes and get nothing for it. Suuurrreeeee you would. And sure would everyone else.

Stop being so naive. Companies pay people enough to pay their taxes, just like they pay them enough to pay for their home, grocery, cars, etc. That money is paid out of the price of the products they sell.

So, you eliminate that, you charge a sales tax directly on the price of the product, and cash wise it's a net zero.

Economics, it's a boom. People will stop working to avoid taxes and just make the most efficient decision.

Again, you don't get my point. If I'm working for $30 an hour now, and tommorrow the tax law changes on my income to a 15% Flat Tax, then my company will still pay me my normal wage of $30 an hour.

Tax rates are a different item than WAGE STANDARDS.

You keep pushing this into a Business or Corp passing their cost onto the consumer issue, which is not my subject at hand. I have long known that business passes the buck on to those that buy, including wages of employees.

BUT if the way my tax is calculated tommorrow changes then they aren't going to jack up my pay rate as a result.

Now, if you want to say the individual BUSINESS OWNER now pays a higher tax at 15% so he raises prices then that is a seperate issue as you would be implying that a 15% Flat rate would be higher than he is paying now.

Bottom line a Flat Tax is equal to everyone which is fair.

 

[NYcarbineer]

You thought the issue we have with progressive rates was calculating the tax?

Seriously?

People keep saying we need to go to the flat tax in order to simplify the system.

That is not true.

OK, so I get now what you don't understand.

Our system now is progressive taxes with lots of deductions. Flat tax is flat tax with no deductions. No one was talking about that they couldn't calculate a progressive tax. It's simpler because there are no deductions. However, if you kept the progressive tax and eliminated the deductions, you and almost everyone else would be out of a job.

Get it now? I'm betting no, but you never know.

You could lower rates, maintain the progressivity at lower levels, eliminate all the deductions, and achieve the same kind of simplification you're talking about.

 

[thereisnospoon]

For the richest, most evil bastard in the country, what should their maximum income tax rate be?

I say 10%, that's enough for God.

I favor the Fair Tax, but this question assumes we don't change tax systems.

EDIT: Per an excellent point from iamwhatiseem, my intent in the ranges is that your rate is somewhere in that range. I did not mean you are OK with the entire range. I didn't want to get carried away with the number of choices.

15% is plenty. No deductions on individual income taxes. Severely limited deductions on businesses.
No more earned income credits. No childcare credits. No mortgage interest deductions. None of that stuff.
In return..Income should be taxed ONCE....That means, if one is going risk their already taxed income in investments such as stocks, bonds or commodities, the government cannot take another bite at the apple. Same for estates. Why should the government get to do another money grab just because someone dies? That is criminal.
We cannot have a system where a certain sector of the population has no skin in the game. EVERYONE who works should pay at least some income tax.
It is time for those riding in the boat to start rowing the boat.

 

[DiamondDave]

someone earning over 1 million is "giving someone else (a) different rate on whatever dollar amount" that someone else is earning at an arbitrarily lower rate of income - the same as a Tax.

What you earn is on you, your job, your contract, your contribution, etc..that 'arbitrary' rate of income or compensation is not some government imposed or mandated thing for every citizen.. the tax rate is

that 'arbitrary' rate of income or compensation is not some government imposed or mandated thing for every citizen..

it is mandated by the CEO - Board of Directors ...

for the likes of one Bill Gates - Steve Jobs -- oversees operations - there could be thousands of higher incomes that do not exist because of arbitrary standards of income inequity.

Wrong.. the position operated by the company, the HR department or company executives determine what they wish to offer to pay and compensate.. what YOU earn is on what you accept, ask for, etc... BIG difference...

BUT it is STILL not a government mandated amount or rate like taxes are...

There is no guarantee of any income equity, nor should there be in a free society... a company decides what they will offer, and an individual decides what they will accept... period

 

[DiamondDave]

That's absurd. You are pulling numbers out of no where. If I'm making $30 now and pay taxes I'll make the same under the new law. Taxation rates don't set your pay scale.

You are also using prorated data. I said nothing about that. The 15% tax rate would hardly change my net income at all if it happened right now. Either way I pay taxes, it's just that one is simple and one requires some time filing my taxes.

I prefer the simple way. It's not going to affect my pay scale.

Pulling numbers out of no where? I walked you through the math, stop being ridiculous.

So seriously, you would spend tens of thousands of dollars a year and bypass years of earnings to get a degree, work hard, work at night, take more responsibility at work. So you can give the money to Obama. You can pay more taxes and get nothing for it. Suuurrreeeee you would. And sure would everyone else.

Stop being so naive. Companies pay people enough to pay their taxes, just like they pay them enough to pay for their home, grocery, cars, etc. That money is paid out of the price of the products they sell.

So, you eliminate that, you charge a sales tax directly on the price of the product, and cash wise it's a net zero.

Economics, it's a boom. People will stop working to avoid taxes and just make the most efficient decision.

Again, you don't get my point. If I'm working for $30 an hour now, and tommorrow the tax law changes on my income to a 15% Flat Tax, then my company will still pay me my normal wage of $30 an hour.

Tax rates are a different item than WAGE STANDARDS.

You keep pushing this into a Business or Corp passing their cost onto the consumer issue, which is not my subject at hand. I have long known that business passes the buck on to those that buy, including wages of employees.

BUT if the way my tax is calculated tommorrow changes then they aren't going to jack up my pay rate as a result.

Now, if you want to say the individual BUSINESS OWNER now pays a higher tax at 15% so he raises prices then that is a seperate issue as you would be implying that a 15% Flat rate would be higher than he is paying now.

Bottom line a Flat Tax is equal to everyone which is fair.

You cannot say it is 'fair' though.. fair is subjective.. someone will indeed think paying the same rate as others on every dollar is not fair.. because they want an advantage and want some other group (based on whatever criteria) to be taxed more... FAIR, to some people, is all based on personal impact.. others do not matter to them when they are considered the opposition or villains

 

[thereisnospoon]

Agreed. That's my fear too that we end up with both a sales tax and an income tax. Actually we need to ban more then the income tax. Payroll, business and other taxes as well as they are all included in the Fair Tax.

Except Fair Tax sucks for a variety of reasons.

Such as?

All taxes are built into the price of the products we buy except the death. Taxing economic activity directly with a "flat" tax cannot be exceeded regarding it's ability to not negatively affect economic activity.

Your flat tax for example helps foreign companies over American, companies that automate over those that hire employees, and companies that offshore production over keep production in the US. I'm a true capitalist, I don't want to punish those companies either. But I certainly don't want taxes to drive production off shore or companies to automate, I want economic efficiency to drive that decision.

Automation and use of technology to perform tasks once performed by people is inevitable. Use of robotics and other technology is the only way US Business can remain competitive.

 

[DiamondDave]

People keep saying we need to go to the flat tax in order to simplify the system.

That is not true.

OK, so I get now what you don't understand.

Our system now is progressive taxes with lots of deductions. Flat tax is flat tax with no deductions. No one was talking about that they couldn't calculate a progressive tax. It's simpler because there are no deductions. However, if you kept the progressive tax and eliminated the deductions, you and almost everyone else would be out of a job.

Get it now? I'm betting no, but you never know.

You could lower rates, maintain the progressivity at lower levels, eliminate all the deductions, and achieve the same kind of simplification you're talking about.

And keep with treating dollars earned by some people, based on arbitrary number levels, differently... complete subjectivity on what you think is 'necessity, or whatever else... the more you eliminate subjectivity the more you eliminate pandering.. and the more you have people with a stake in the game the more scrutiny you will have on the government

 

[thereisnospoon]

A fair or consumption tax would work ONLY if the economy were to be 100% electronic. No currency. All transaction would have to be done on computers and all funds transferred in real time.
The elimination of currency would save the federal government billions in costs to print/mint...
There would be no need for a bureau of engraving and printing. No need for the coin minting facilities. Those workers could be released into the private sector where they can prosper free of government rules and regulations. And free up millions more in taxpayer assets.

 

[AmazonTania]

No it's not. If I buy a $10 hammer where the sales tax is 10%, I pay a dollar in tax. A millionaire comes in and buys that hammer, he pays a dollar in tax.

That is in no way the same as taxing a percentage of my earnings and the millionaire's earnings.

Yes it is.. it is EQUAL in application regardless of income, race, creed, situation, background, etc...

You sir, are an idiot... and you simply wish a punishment system based on progressive rates so that those you are jealous of, envious of, and upset about their earning more pay more of a % of their income for services than you do.. so that you can sap off of them even more...

NOBODY should have a zero or even negative effective rate (like the negative effective rate we have now for the lowest quintile)... everyone should have the same stake in the game for every dollar earned, PERIOD... well, at least if you actually believe in the equality in treatment by government

Progressive rates tax everyone exactly the same, bracket by bracket. If you don't earn taxable income in a bracket, you don't get taxed on it. If you earn money in any bracket,

you paid exactly the same as anyone else earning money in that bracket.

Not always. Two different types of people can pay different levels of taxes, although overtime they've made the same amount of income.

 

[Darkwind]

15% for citizens.

25% for Politicians

In addition, a unbreakable tax cap must be placed upon these rates. If government needs money for other projects, they have to cut from something.

None of this matters until the 16th is repealed.

Just out of curiosity why does it require the 16th Amendment to be repealed?

If you create a flat or alleged fair tax without repealing the 16th, you will end up with both or all three.

 

[NightFox]

15% for citizens.

25% for Politicians

In addition, a unbreakable tax cap must be placed upon these rates. If government needs money for other projects, they have to cut from something.

None of this matters until the 16th is repealed.

Just out of curiosity why does it require the 16th Amendment to be repealed?

If you create a flat or alleged fair tax without repealing the 16th, you will end up with both or all three.

IMHO Dark, More than likely you'd end up with all three even without the 16th, repealing the 16th would require that income tax derived from property (interest, rent, dividends, etc..,) be apportioned based on state population, that's how I read the SCOTUS precedents anyways.

See: Pollock v. Farmers Loan& Trust, 1895, Stanton V. Baltic Mining Company, 1916, in the latter case SCOTUS concluded; "The Sixteenth Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged."

 

[kaz]

That's absurd. You are pulling numbers out of no where. If I'm making $30 now and pay taxes I'll make the same under the new law. Taxation rates don't set your pay scale.

You are also using prorated data. I said nothing about that. The 15% tax rate would hardly change my net income at all if it happened right now. Either way I pay taxes, it's just that one is simple and one requires some time filing my taxes.

I prefer the simple way. It's not going to affect my pay scale.

Pulling numbers out of no where? I walked you through the math, stop being ridiculous.

So seriously, you would spend tens of thousands of dollars a year and bypass years of earnings to get a degree, work hard, work at night, take more responsibility at work. So you can give the money to Obama. You can pay more taxes and get nothing for it. Suuurrreeeee you would. And sure would everyone else.

Stop being so naive. Companies pay people enough to pay their taxes, just like they pay them enough to pay for their home, grocery, cars, etc. That money is paid out of the price of the products they sell.

So, you eliminate that, you charge a sales tax directly on the price of the product, and cash wise it's a net zero.

Economics, it's a boom. People will stop working to avoid taxes and just make the most efficient decision.

Again, you don't get my point. If I'm working for $30 an hour now, and tommorrow the tax law changes on my income to a 15% Flat Tax, then my company will still pay me my normal wage of $30 an hour.

Tax rates are a different item than WAGE STANDARDS.

You keep pushing this into a Business or Corp passing their cost onto the consumer issue, which is not my subject at hand. I have long known that business passes the buck on to those that buy, including wages of employees.

BUT if the way my tax is calculated tommorrow changes then they aren't going to jack up my pay rate as a result.

Now, if you want to say the individual BUSINESS OWNER now pays a higher tax at 15% so he raises prices then that is a seperate issue as you would be implying that a 15% Flat rate would be higher than he is paying now.

Bottom line a Flat Tax is equal to everyone which is fair.

I get your point just fine, you don't get mine.

No one is going to work harder and invest in themselves in order to turn over the extra they make to Obama. Gates advocates a death tax, then spends piles of money to shelter his money from the death tax. Warren Buffett advocates higher tax rates, then hires an army of accountants to find every tax loophole to avoid paying taxes, like paying himself in capital gains which are taxed at a lower rate. Even Obama himself says he should pay a higher tax rate, then he doesn't pay it.

If you are worth double someone else, your company has to pay you double AFTER taxes, not before. That for one day you'll get a raise for flat taxes is irrelevant. Wages will quickly go to what they would need to be tax adjusted. Which is double after tax. You're not going to work for less than double after tax, and your employer isn't gong to pay you more than double after tax because other people with your skills will work for that.

Competitive markets set your wages, not you and not your employer. You may not think of it that way, but you and your employer are keenly aware of market rates for your skills. Market rates are when supply equals demand.

 

[kaz]

People keep saying we need to go to the flat tax in order to simplify the system.

That is not true.

OK, so I get now what you don't understand.

Our system now is progressive taxes with lots of deductions. Flat tax is flat tax with no deductions. No one was talking about that they couldn't calculate a progressive tax. It's simpler because there are no deductions. However, if you kept the progressive tax and eliminated the deductions, you and almost everyone else would be out of a job.

Get it now? I'm betting no, but you never know.

You could lower rates, maintain the progressivity at lower levels, eliminate all the deductions, and achieve the same kind of simplification you're talking about.

Ding, ding, ding. That is what they are dong with the flat tax.

 

[kaz]

Except Fair Tax sucks for a variety of reasons.

Such as?

All taxes are built into the price of the products we buy except the death. Taxing economic activity directly with a "flat" tax cannot be exceeded regarding it's ability to not negatively affect economic activity.

Your flat tax for example helps foreign companies over American, companies that automate over those that hire employees, and companies that offshore production over keep production in the US. I'm a true capitalist, I don't want to punish those companies either. But I certainly don't want taxes to drive production off shore or companies to automate, I want economic efficiency to drive that decision.

Automation and use of technology to perform tasks once performed by people is inevitable. Use of robotics and other technology is the only way US Business can remain competitive.

I agree, but my point was do you want that decision to be driven by economics, meaning the cost of the investment and the quality of the work versus the cost of employees, or do you want to use taxes to artificially drive companies to do it by increasing the amount of money they save in taxes to do it?

Liberals like talking about punishing taxes for taking away jobs. The income tax punishes companies that provide jobs. The math doesn't lie. I know they're saying they the field of economics is wrong, liberal lawyers told them so. But the math doesn't lie.