Pope
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Bush Tax Cut Soaked The Rich

Sat Aug 25, 2007 12:56 am

OpEd piece from today's WSJ concludes:

Quote:
Tax rates on higher incomes have been halved, but the federal tax share of the top 1% has nearly doubled. And the budget deficit has fallen.

http://online.wsj.com/article/SB1187...d=opinion_main_review_and_outlooks

That's right boys and girls, the share of the US federal income tax borne by the richest 1% of households has doubled under Bush!

  • The richest 1% now pay 35.7% of all US federal income taxes, up from 19% in 1980 before supply-side tax cuts were implemented
  • The richest 5% now pay 56.2% of all US federal income taxes versus 37% in 1980
  • The richest 10% now pay 67.6% of all US federal income taxes versus 49% in 1980
  • The richest 25% now pay 84.4% of US federal income taxes versus 84% in 1980

    So much for the notion that the rich benefit at the expense of the poor. The rich are paying more total taxes than ever before. Their share of the tax burden is growing, yet the deficit is falling, tax revenues are growing and the number of people joining the millionaire ranks are growing as well.

    The notion that tax cuts are a burden on the poor and working classes is simply false and facts prove it.
  • Hypocrisy. It's the new black for liberals.
     
    MaverickM11
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 1:01 am

    Quoting Pope (Thread starter):
    The richest 25% now pay 84.4% of US federal income taxes versus 84% in 1980

    But they each got a new Lexus with the tax cut!!!! Wink
    E pur si muove -Galileo
     
    CaptOveur
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 1:39 am

    While I agree with you and plenty of people with more degrees in business and math fields than this entire website combined agree with you. Someone is going to chime in and tell you that you are an idiot and Bush is only out to screw the poor.

    It's common sense- you can't get money from people who don't have it. Now if only banks and credit card companies could figure that out.

    [Edited 2007-08-24 18:40:08]
    Things were better when it was two guys in a dorm room.
     
    N231YE
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 1:41 am

    Interesting, because there exists a loophole in the tax law: that if one makes over a certain amount (I believe it is in the Billions), they don't pay taxes at all

    There was a report not too long ago in Cleveland about this; and if I am not mistaken, the former Browns owner, Al Lerner, was one of the people that didn't have to pay taxes.
     
    RJdxer
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 2:03 am

    Quoting Pope (Thread starter):
    The notion that tax cuts are a burden on the poor and working classes is simply false and facts prove it.

    Get the duct tape out. Falcons head is about to explode.

    But you know, if we can get 35.7 out of the top 1% and 84% out of the top 25%, then surely they can give a more, like 50% and 90%.  wink 
    Warm winds blowing, heating blue skies, and a road that goes forever. I'm going to Texas!
     
    OU812
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 2:06 am

    Quoting Pope (Thread starter):
    The notion that tax cuts are a burden on the poor and working classes is simply false and facts prove it.

    Indeed Pope!

    But do you think these facts will be acknowledged by Falcon84 & the Flamers? flamed 

    Nope!

     no 

    From the article:
    The deficit this fiscal year is expected to be $158 billion, a meager 1.2% of GDP. Since the Bush tax cuts of 2003, the budget deficit has fallen by $217 billion mostly because of a continuing torrid pace of revenue growth

    Don't hear too much about the deficit now from the liberal media. The lib media made the deficit front page news when "it was reported/speculated the deficit may hit 400 billion. But very little is said now, now that reporting it would be a positive for Bush!

    Pricks!
     
    FlyDeltaJets87
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 2:43 am

    Quoting Pope (Thread starter):
    So much for the notion that the rich benefit at the expense of the poor. The rich are paying more total taxes than ever before. Their share of the tax burden is growing, yet the deficit is falling, tax revenues are growing and the number of people joining the millionaire ranks are growing as well.

    I've also heard that the government is experiencing record revenues as well, even with the lower tax rates. Things to make you go "Hmmmm. Is there a connection?"
    "Let's Roll"- Todd Beamer, United Airlines Flight 93, Sept. 11, 2001
     
    aloges
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 2:50 am

    Quoting OU812 (Reply 5):

    Lib vs Con warrior to the rescue! Do you never tire of this partisan BS?  sarcastic 
    Don't cry because it's over, smile because it happened.
     
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    yowza
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 2:52 am

    Quoting Pope (Thread starter):
    # The richest 1% now pay 35.7% of all US federal income taxes, up from 19% in 1980 before supply-side tax cuts were implemented
    # The richest 5% now pay 56.2% of all US federal income taxes versus 37% in 1980
    # The richest 10% now pay 67.6% of all US federal income taxes versus 49% in 1980
    # The richest 25% now pay 84.4% of US federal income taxes versus 84% in 1980

    While I don't dispute the validity of this information I do question the context. 2004 vs 1980? Come on, how many administrations have been in power in that period. For all we know a 2004 vs 199x comparison might show that the rich are paying less than they were in 199x? You can't just pick and choose information, you need to be comprehensive, complete and sequential when making these types of studies otherwise you're just a bullshit merchant with a few tables of data in your article trying to get noticed.

    The article also makes no mention of cronyism, it is possible that "the rich" are paying more in tax but that certain friends of the administration are paying less. I'm not saying that's the case, but it is a distinct possibility.

    The article also does not take into account the companies that have re-located offshore. Inevitably companies that move take a lot of money with them. A respectable portion of which is paid to the American elite in the form of bonuses. However though clever (ab)use of tax laws this is missed.

    Anyways, I'll stop with my rational thoughts there as I don't want to get flamed by the usual suspects.

    YOWza
     
    FlyingTexan
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 3:47 am

    Quoting Pope (Thread starter):
    The richest 25% now pay 84.4% of US federal income taxes versus 84% in 1980

    It should be 100%

    Same with inheritance tax.
    "Wouldn't your boss like to fly home nonstop at 4:30 on a Friday afternoon?" -Airline Exec to Congressional Staffer
     
    deltagator
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 3:50 am

    Quoting FlyingTexan (Reply 11):
    It should be 100%

    Same with inheritance tax.

    Care to explain why us rich white devils should pay 100% of the taxes or do you just want to throw the same liberal "tax the rich" stuff out there with nothing to back it up?
    "If you can't delight in the misery of others then you don't deserve to be a college football fan."
     
    Pope
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 3:52 am

    Quoting YOWza (Reply 9):
    I do question the context. 2004 vs 1980?

    The data you seek is available from the IRS website.

    I've previously posted the link, I'll try to find it and repost it later on this thread. I think the reason that 1980 was used is that it was the last year before the Reagan supply side tax cuts began.

    Quoting YOWza (Reply 9):
    The article also does not take into account the companies that have re-located offshore. Inevitably companies that move take a lot of money with them. A respectable portion of which is paid to the American elite in the form of bonuses. However though clever (ab)use of tax laws this is missed.

    Anyone who wants to argue about offshore movements of US corporations in order to avoid US income tax needs to first read US Internal Revenue Code Section 367(a). This section makes a US transferor pay income tax at the ordinary rates on the appreciation of any asset transferred from the US to a foreign corporation. Therefore, there is no short-term tax benefit from expatriating from the US to avoid current taxation. The savings from an expatriation is that future income THAT IS NOT EARNED IN THE UNITED STATES is no longer taxed in the US. The US currently imposes a worldwide basis of taxation on US citizens and US entities (corporations).

    Build a factory in Korea (for example). Sell that product to Korea and re-invest the money to expand your Korean factory, the US government wants you to pay current income tax to the US on the Korean sourced income (notwithstanding the fact that the Korean government has already taxed you on the Korean income).

    There are exceptions to these rules but the exceptions to what is known as the Subpart F regime are some of the most complicated rules in the US tax code.

    Note that most of the rest of the world has a territorial basis of taxation where a company is only taxed on the income sourced within the taxing jurisdiction. For example UK based companies pay UK taxes on their UK sourced income and no UK taxes on their income sourced out side the UK. The US is in the very small minority of countries that impose this global basis of taxation. I don't know what's abusive about arranging your affairs so that you can compete globally under a set of rules that levels the playing field for the participants.

    From a policy perspective, a global basis of taxation discourages US companies from developing intangible assets (including pharamceuticals, technology and other intellectual property) within the US because once that intangible is developed you've subjected yourself to US taxation on it.

    For example, if you were a scientist who was working on a cure for cancer, the last thing he'd want to do is set up a company to conduct all the R&D in the US. Instead, he'd be better off setting up a Irish (Ireland has favorable tax treaties) holding company to own the intangible and then a US subsidiary to carry out the research. Once the research paid off, the Irish company could then license the intangible to the US subsidary for purpose of selling the product in the US. Foreign sales would not be subject to US taxation under this structure. In contrast if he set up the US company and nothing else, 100% of the sales from that product anywhere in the world would be subject to immediate US taxation.
    Hypocrisy. It's the new black for liberals.
     
    N231YE
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 3:58 am

    Update: a quick google search solidifies the fact that some sort of loophole exists: the ultra-wealthy don't have to pay any tax on medicare or social security.

    In fact, the Democrat haters here will be pleased: I found a site that attacks John Kerry and his fortune for not paying his own taxes.

    Again, I don't have much time, but I will chime in later.

    ----------------------------

    On a side note, my take. Yes, the wealthy provide much income, say 33% (or whatever the tax average is) on a $100k/yr earnings is noting compared to one on a $100m/yr earnings. On the other hand, the link provided is an opinion piece, ant his line:

    Quote:
    The supply-side revenue effects on the rich are remarkable: Tax rates on higher incomes have been halved, but the federal tax share of the top 1% has nearly doubled. And the budget deficit has fallen. That's what happens when tax policy gets the incentives right.

    really bothers me, since after 2 years of economics, I learned that Reaganomics, aka Supply-Side Economics (or Trickle-Down economics), don't work. The point of which is to give the rich tax breaks, in hopes the savings will "trickle-dwon" to the lesser paid people, seldom happens...the tax breaks go strait to top-level's pockets, not as the government intended.

    Just my  twocents 

    Anyways, Pope, I will take your calling of me, and I'll do the best that I can to prove my point. ( $100 to a poor college student sounds appetizing  biggrin  , just kidding, you can keep your check for more important things)

    Regards,
    N231YE
     
    Pope
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 4:01 am

    Quoting DeltaGator (Reply 12):
    Care to explain why us rich white devils should pay 100% of the taxes or do you just want to throw the same liberal "tax the rich" stuff out there with nothing to back it up?

    That's easy. It's simply class envy coupled with an absolute ignorance of basic economics.
    Hypocrisy. It's the new black for liberals.
     
    FlyDeltaJets87
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 4:06 am

    Quoting N231YE (Reply 14):
    the ultra-wealthy don't have to pay any tax on medicare or social security.

    And why should they? The incredibly wealthy don't need social security or medicare as they have more than enough funds for their own medical and retirement plans. In fact, I wish I could opt out of social security taxes even at my income level and spend or invest that money as I wished.

    However, contrary to your first post, there is a HUGE between not paying social security and medicare taxes versus not paying taxes at all.
    "Let's Roll"- Todd Beamer, United Airlines Flight 93, Sept. 11, 2001
     
    Pope
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 4:12 am

    Quoting N231YE (Reply 14):
    Update: a quick google search solidifies the fact that some sort of loophole exists: the ultra-wealthy don't have to pay any tax on medicare or social security.

    You're wording this wrong. We are talking about income taxes which are different than payroll taxes. People earning over the medicare wage base (I think it's like $91,000/yr in 2007 and is index annually for inflation) do not pay social security taxes on their earned income. Payroll taxes are not income taxes. In fact, if you search on some of my prior posts, I've argued that democrats need to get on board and advocate a whole sale reform package for payroll taxes because they are the most regressive taxes in the IRC.

    I was also the one who argued that if people were serious about jump starting the economy in 2002 by helping the middle class, the payroll tax needed to be reformed by changing the wage caps into wage floors. Exempt the first $40,000 from payroll tax and set no upper limit to it.

    Finally, the payroll tax is often the only federal tax many families pay. I think you can earn up into $40,000 or $50,000 and completely avoid income taxes if you're a family of 4 but the payroll tax hits dollar 1 of everyone's earned income.

    Quoting N231YE (Reply 14):
    ( $100 to a poor college student sounds appetizing , just kidding, you can keep your check for more important things)

    Hey my offer still stands. I'm fortunate enough to have the $100 and would gladly give it to an enterprising college student who did the research. If it's so simple to find, you could be looking at an effective hourly wage of over $400/hr (tax-free to boot).

    [Edited 2007-08-24 21:29:38]
    Hypocrisy. It's the new black for liberals.
     
    Arniepie
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 4:53 am

    I'm in no way disputing these numbers but they say more about the evolution of the general spreading of wealth within the US than anything else.
    In the last few years , with the tax-cuts, it has gone so far that today the top 1% of wealthy people in the US have +40% of all wealth and the TOP 5% own more than 60% of all wealth in the US.

    The economic growth of the last few years in the US has almost uniquely gone to the top 20% of wealthy people while the rest have had a status quo or even have gone backwards in regards to general wealth level.

    So your numbers in this context leads to a whole different conclusion IMHO.

    Better read up in the Federal Reserve Board's Survey of Consumer Finances, they come to a very different conclusion as to the effects of the tax cuts under this government.
    [edit post]
     
    Pope
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 4:58 am

    Quoting ArniePie (Reply 18):
    Better read up in the Federal Reserve Board's Survey of Consumer Finances, they come to a very different conclusion as to the effects of the tax cuts under this government.

    I'd be interest in reading this. Can you post a link or tell me which Federal Reserve bank this is posted on?

    (I hate how the Fed doesn't post all its research on one main page instead leaving it up to each branch to post its own documents).
    Hypocrisy. It's the new black for liberals.
     
    ConcordeBoy
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 5:01 am

    Quoting DeltaGator (Reply 12):
    Quoting FlyingTexan (Reply 11):
    It should be 100%
    Same with inheritance tax.

    Care to explain why us rich white devils should pay 100% of the taxes or do you just want to throw the same liberal "tax the rich" stuff out there with nothing to back it up?

    Texan,
    I've seen your postings before-- you cannot possibly be naive enough to think that you could issue of statement featuring that magnitude of idiocy, sans any form of corroboration/justification other than "class" envy, and expect not to be effectively challenged/scrutinized therefore. Sad.
    Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
     
    Duff44
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 5:10 am

    If I'm paying anything above 0% income tax to the government, I'm always going to feel like I'm being screwed no matter what.

    If I made $6/hr I'd feel that way, and if I made $20 billion I'd feel that way.


    The whole system needs to be torn down and rebuilt from scratch...
    I'll rassle ya for a bowl of bacon!
     
    Arniepie
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 5:14 am

    Quoting Pope (Reply 19):
    I'd be interest in reading this. Can you post a link or tell me which Federal Reserve bank this is posted on?

    Sorry Pope ,I read a paper print about it but I know that NY university economics department (proff. Edward Wolff) used to refer to it also.
    I'll try Googling it, it must be on the net somewhere.
    Post a link if I find it.
    [edit post]
     
    FlyDeltaJets87
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 5:16 am

    Quoting Duff44 (Reply 21):
    The whole system needs to be torn down and rebuilt from scratch...

    My personal opinion is either:
    A) A Flat Tax Rate on Income Tax
    B) Abolishing the income tax altogether in favor of a national sales tax.

    I'm sure someone will flame me in disagreement.
    "Let's Roll"- Todd Beamer, United Airlines Flight 93, Sept. 11, 2001
     
    Pope
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 5:28 am

    Quoting ArniePie (Reply 22):
    Sorry Pope ,I read a paper print about it but I know that NY university economics department (proff. Edward Wolff) used to refer to it also.

    Can you give me an idea of how long ago this was so I can focus my search?
    Hypocrisy. It's the new black for liberals.
     
    deltagator
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 5:29 am

    Quoting FlyDeltaJets87 (Reply 23):
    A Flat Tax Rate on Income Tax

    The problem here is that this tax would have the poor folks who pay no taxes (and actually get money through the EIC) would actually have to pay some taxes...and we all know that would be met with uproar from the left.

    Quoting FlyDeltaJets87 (Reply 23):
    Abolishing the income tax altogether in favor of a national sales tax.

    Interesting idea in my mind goes against the 10th Amendment of the Constitution. Also, what do you do with the various local sales taxes that are used for state, county, and city services? Do those get tacked on to things?

    Neal Boortz and Rep. Linder have been pushing the Fair Tax plan where there is a national sales tax and then rebates based on a standard set of items needed for daily life (food, etc.) but I wonder about the actual implementation of such a plan. Things like the imbedded tax in goods coming out and us paying less for an item just don't hold for me. Why would I (if I were a merchant or supplier) reduce my cost even if the imbedded tax is gone? That's pure profit to me. I just think any attempt to bring this plan to fruition would be ripped apart in committee and be something perhaps worse than the current system.

    I'll almost take the devil I know versus the one I don't.

    Quoting FlyDeltaJets87 (Reply 23):
    I'm sure someone will flame me in disagreement.

    You most likely will. We are of course bad folks for daring say we pay enough in taxes. We should want to pay more always.
    "If you can't delight in the misery of others then you don't deserve to be a college football fan."
     
    Arniepie
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 5:29 am

    Looks like the Federal reserve is coming out with the new report in dec. 2007 (last one was from 2004 IIRC) so before december you wont be able to read up on it online, sorry.

    BTW they usually can be found on federalreserve.gov, so I suspect the newest one will be posted there also.
    [edit post]
     
    Duff44
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 5:30 am

    Quoting FlyDeltaJets87 (Reply 23):
    My personal opinion is either:
    A) A Flat Tax Rate on Income Tax
    B) Abolishing the income tax altogether in favor of a national sales tax.

    I like option B...
    I'll rassle ya for a bowl of bacon!
     
    Pope
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 5:38 am

    The flat tax (aka the National Retail Sales Tax) will never see the light of day. Hell, I'm willing to be that it never see a Ways and Means committee hearing let alone a vote on the floor of the US House (regardless of who controls Congress) for one simple reason - doing away with the tax code takes away Congress' biggest tool for rewarding or punishing behavior. It would essentially be a wholesale transfer of power from the Congress to the Executive branch that is unprecedented in US political history.

    Congress wants to be able to set national policy through the tax code and a flat tax simply doesn't allow this to happen. It's not a democrat or a republican thing - it's a protect ones own power thing that no Member of Congress really wants to support no matter what lip service they pay to it.
    Hypocrisy. It's the new black for liberals.
     
    Yellowstone
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 5:41 am

    Quoting FlyDeltaJets87 (Reply 23):
    B) Abolishing the income tax altogether in favor of a national sales tax.

    Bad idea. Sales taxes are almost always, if not always, regressive, as the more money you earn, the less you spend on goods versus investing it.

    Anyway, the OP's claims about the change in the tax burden probably say more about the way the wealth distribution has changed in this country over the last few decades. If the rich are paying a lower tax rate, but their share of the tax burden has gone up, it seems to me they must now have a higher fraction of the money to be taxed! And would the OP please explain why the thread title refers to Bush's tax cut, but the figures compare 2007 to 1980 instead of to 2001, immediately before Bush took office?
    Hydrogen is an odorless, colorless gas which, given enough time, turns into people.
     
    FlyDeltaJets87
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 5:55 am

    Quoting DeltaGator (Reply 25):
    That's pure profit to me. I just think any attempt to bring this plan to fruition would be ripped apart in committee and be something perhaps worse than the current system.

    The other downside that always pops up is that many items, especially expensive ones would go to the black market to avoid the tax rates, which is something to be considered.

    I'm opened minded on this and willing to listen to both sides of the issue, but I do like the idea of being taxed on how much I spend, not how much I make.

    Quoting DeltaGator (Reply 25):
    I'll almost take the devil I know versus the one I don't.

    Haha. But even a new outhouse smells good at first.  wink 

    I will say that when our current tax system tells someone who catches a baseball that they now have to pay asset taxes on it is pretty screwed up and needs to be abolished.

    Quoting DeltaGator (Reply 25):
    Neal Boortz and Rep. Linder have been pushing the Fair Tax plan where there is a national sales tax and then rebates based on a standard set of items needed for daily life (food, etc.) but I wonder about the actual implementation of such a plan.

    I think the middle ground would be that food purchases up to a certain amount each year should be tax free.


    Quoting Yellowstone (Reply 29):
    Sales taxes are almost always, if not always, regressive, as the more money you earn, the less you spend on goods versus investing it.

    Heh. If more people invested and saved parts of their income rather than spending 100+% of it, there just might be fewer debt and credit problems. Lessons to be learned there.

    Quoting Yellowstone (Reply 29):
    And would the OP please explain why the thread title refers to Bush's tax cut, but the figures compare 2007 to 1980 instead of to 2001, immediately before Bush took office?

    I think that may be answered here:

    Quoting Pope (Reply 13):
    I think the reason that 1980 was used is that it was the last year before the Reagan supply side tax cuts began.
    "Let's Roll"- Todd Beamer, United Airlines Flight 93, Sept. 11, 2001
     
    Arniepie
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 5:57 am

    Quoting FlyDeltaJets87 (Reply 23):
    My personal opinion is either:
    A) A Flat Tax Rate on Income Tax
    B) Abolishing the income tax altogether in favor of a national sales tax.

    I'm sure someone will flame me in disagreement.

    No need to bring the flaming equipment out Big grin , however there are some consequences with both your suggestions.
    They are not bad as an idea but do certainly need some tweaking.
    A)
    -Flat tax is not bad as a concept provided that you make sure that a larger portion (absolute value, not percentage) of your income is free from this tax and minimal income levels(or dare I say even welfare packages) rise accordingly to at least the same level as this free portion.
    -Also, a direct effect is that almost all non essential goods will be harder to purchase by lower and middle incomes than it is now.
    -It still remains to be seen what it will do for the government finances but if total volume of income tax falls substantially it will have to be compensated by higher VAT on goods and services or higher taxation of non durable goods (eg energy).
    -A definite plus is that for US citizens it will be cheaper to travel abroad (on average they will have more money in their pockets)

    B)
    Abolishing income taxes all together and get government money from solely a national sales tax (VAT if I understand you clearly?) is a much more controversial idea IMHO.
    It is basically the most capitalistic approach possible, I will lead to enormous differences in levels of wealth.
    Many, many more people will have only enough money to buy basic needs and only a small portion will be phenomenally wealthy, a little bit like the current situation in Russia or China.
    [edit post]
     
    bhill
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 6:01 am

    FlyDelta...I'll start the initial ignition. Sales Taxes are the most regressive type of taxes. Especially to the poor. Say you have a 8.5% sales tax on a $2.00 loaf of bread. If you are making minimum wage it can really hurt vs. someone making 70,000/yr that would not even notice it.

    Cheers
    Carpe Pices
     
    deltagator
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 6:13 am

    Quoting Pope (Reply 17):
    People earning over the medicare wage base (I think it's like $91,000/yr in 2007 and is index annually for inflation) do not pay social security taxes on their earned income.

    It's right around 90K or so. You still pay Medicare taxes up to that rate in a certain year and then you're off the hook until January 1st of the next year. SS taxes continue on throughout the entire year though.

    Quoting FlyDeltaJets87 (Reply 28):
    I'm opened minded on this and willing to listen to both sides of the issue, but I do like the idea of being taxed on how much I spend, not how much I make.

    I'm with you. I'm willing to listen and entertain other ideas. I just have a bad feeling that what we are sold versus what gets implemented will be two vastly different things.

    Quoting FlyDeltaJets87 (Reply 28):
    I will say that when our current tax system tells someone who catches a baseball that they now have to pay asset taxes on it is pretty screwed up and needs to be abolished.

    Seriously! WTF? Since when did the IRS become the be all-end all for setting the price of a collector's item? The price depends upon the value someone who buys it determines it to be.

    If the kid wants to hold on to it then so be it and he shouldn't have to pay taxes. That sets a precedent for all folks who catch fly balls at a stadium. We might as well hand out 1099 forms with the market rate for a used baseball to anyone who catches one.

    Quoting ArniePie (Reply 29):
    Abolishing income taxes all together and get government money from solely a national sales tax (VAT if I understand you clearly?) is a much more controversial idea IMHO.

    Seems to work ok in the UK. They do have an income tax though right? (I honestly don't recall right now.)
    "If you can't delight in the misery of others then you don't deserve to be a college football fan."
     
    aa757first
    Posts: 3140
    Joined: Sun Aug 03, 2003 11:40 am

    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 6:22 am

    Quoting FlyDeltaJets87 (Reply 21):

    B) Abolishing the income tax altogether in favor of a national sales tax.

    Like other said, I have a problem with this. Just think of a few problems this would cause.

    Delaware has no sales tax at all. This helps them attract consumers (and then, businesses) to their state. Pennsylvania has no sales tax on clothes (except a few things, like fur) or unprepared food. A big mall near Philadelphia, the King of Prussia mall, attracts a lot of customers from out-of-state looking to save on sales tax.

    Also, this might also hurt tourism a bit. I have cousins in Germany that come over and, when they do, they load up on stuff because its cheaper here than it is in Germany.
     
    PPVRA
    Posts: 7878
    Joined: Fri Nov 12, 2004 7:48 am

    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 6:34 am

    Quoting Aa757first (Reply 32):
    Also, this might also hurt tourism a bit.

    Isn't Florida all sales tax?

    Check out The Fair Tax Book, it's very interesting. It's a proposal to replace, simplify the tax system (not increase or decrease, just modify it). I only read some parts of it, have to buy a copy, but it's a very easy read.

    [Edited 2007-08-24 23:36:22]
    "If goods do not cross borders, soldiers will" - Frederic Bastiat
     
    deltagator
    Posts: 6170
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 6:35 am

    Quoting Aa757first (Reply 32):
    Also, this might also hurt tourism a bit. I have cousins in Germany that come over and, when they do, they load up on stuff because its cheaper here than it is in Germany.

    A lot of that has to do with the weakness of the dollar compared to some foreign currencies.

    Quoting Aa757first (Reply 32):
    Delaware has no sales tax at all. This helps them attract consumers (and then, businesses) to their state.

    Businesses yes but that is more the corporate tax code. Consumers I will call you out on because the shopping in Delaware is suspect at best. When you have that King of Prussia Mall just up the road the various malls in the Wilmington area (where the big chunk of population is located) comes off as pretty lame and not worth the time.
    "If you can't delight in the misery of others then you don't deserve to be a college football fan."
     
    aa757first
    Posts: 3140
    Joined: Sun Aug 03, 2003 11:40 am

    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 6:46 am

    Quoting DeltaGator (Reply 34):

    A lot of that has to do with the weakness of the dollar compared to some foreign currencies.

    Probably. She's been doing it for years, before Germany even had the Euro, so I don't think that's the whole reason. Plus, if you slap a 23% tax on stuff, not including extra taxes states might put on them, you'll probably lose that advantage.

    Quoting DeltaGator (Reply 34):

    Businesses yes but that is more the corporate tax code. Consumers I will call you out on because the shopping in Delaware is suspect at best. When you have that King of Prussia Mall just up the road the various malls in the Wilmington area (where the big chunk of population is located) comes off as pretty lame and not worth the time.

    I have a lot of relatives in the PHL area and when they buy a more expensive item, they'll often drive to a Best Buy in Delaware instead of one in Pennsylvania. That's what I meant.

    I agree that a lot of people go to the King of Prussia because it has stores malls in Delaware don't have (Neiman Marcus, Sak's, Lord & Taylor, etc). But even if you're buying an expensive piece of clothing and you're not far from the King of Prussia, someone from Jersey or Maryland might drive over to the same store in a different state just to save on the tax.

    Quoting PPVRA (Reply 33):

    Isn't Florida all sales tax?

    I don't think Florida imposes income tax on its residents, but I'm not sure how they make up for it. Tourists buying stuff there can't hurt.
     
    deltagator
    Posts: 6170
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 6:58 am

    Quoting Aa757first (Reply 35):
    I don't think Florida imposes income tax on its residents, but I'm not sure how they make up for it. Tourists buying stuff there can't hurt.

    Florida has no state income tax. If I recall my home state history correctly we (still a property owner there though no longer a resident) have a state law, maybe even part of the Constitution, that there will be no state income tax.

    There is a state sales tax (6% IIRC) on goods and various county and cities can add on top of that as well. A ton of the money comes from tourist taxes on hotel rooms and rental cars.
    "If you can't delight in the misery of others then you don't deserve to be a college football fan."
     
    Yellowstone
    Posts: 2821
    Joined: Wed Aug 16, 2006 3:32 am

    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 7:32 am

    Quoting FlyDeltaJets87 (Reply 28):
    Heh. If more people invested and saved parts of their income rather than spending 100+% of it, there just might be fewer debt and credit problems. Lessons to be learned there.

    Absolutely true, but there's only so much you can do to cut your spending. Even among those who do save, there's a big difference between people who stash away some small amount per month as an emergency fund versus those who have enough time and money to invest large portions of their paychecks as a source of future income.

    Quoting FlyDeltaJets87 (Reply 28):
    I think that may be answered here:

    If that's the case, why bring Bush into it instead of Reagan? (or Bush I, or Clinton, whose tax policies also would affect this)
    Hydrogen is an odorless, colorless gas which, given enough time, turns into people.
     
    Pope
    Topic Author
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 8:35 am

    Quoting DeltaGator (Reply 36):
    Florida has no state income tax. If I recall my home state history correctly we (still a property owner there though no longer a resident) have a state law, maybe even part of the Constitution, that there will be no state income tax.

    Florida's Constitution allows for the possibility of an income tax with a 2/3 popular vote. So while technically the possibility is there, there realistically is no way that you'd get 2/3rd of Floridians to agree to anything let alone impose an income tax on themselves.
    Hypocrisy. It's the new black for liberals.
     
    RJdxer
    Posts: 3523
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 9:55 am

    Quoting OU812 (Reply 5):
    But do you think these facts will be acknowledged by Falcon84 & the Flamers?

    We are up to post 39 and the better part of the day is gone. Either Falcon is asleep or had a stroke and keeled over dead when he read this thread.
    Warm winds blowing, heating blue skies, and a road that goes forever. I'm going to Texas!
     
    FlyDeltaJets87
    Posts: 4479
    Joined: Fri Aug 11, 2006 3:51 am

    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 11:48 am

    Quoting Bhill (Reply 30):
    FlyDelta...I'll start the initial ignition. Sales Taxes are the most regressive type of taxes. Especially to the poor. Say you have a 8.5% sales tax on a $2.00 loaf of bread. If you are making minimum wage it can really hurt vs. someone making 70,000/yr that would not even notice it.

    Well, I won't count that as flaming because you're making a valid argument and backing it up; not just calling the idea "stupid" and brushing it aside.
    But, that's why I think essential items like food should be exempt (up to a certain amount). Additionally, I think you probably shouldn't be buying an HD TV and a PS3 if you can't afford a few more dollars in the taxes anyway.

    Quoting Aa757first (Reply 32):
    Delaware has no sales tax at all. This helps them attract consumers (and then, businesses) to their state. Pennsylvania has no sales tax on clothes (except a few things, like fur) or unprepared food. A big mall near Philadelphia, the King of Prussia mall, attracts a lot of customers from out-of-state looking to save on sales tax.

    Different things work in different parts of the country. Here in Florida, we have no state income tax and let all the tourists coming in pay a large chunk of the taxes. Florida can do this, as can some other states, as they'll get enough business anyway. Other states, like your example of Delaware, have to find other ways of attracting business.
    The tax rates being ridiculously high is why New York City suffered for a while too until they were finally lowered. When Giuliani became the mayor, he lowered many of the tax rates and the city finally saw an increase in business and in tax revenue.

    Quoting Aa757first (Reply 32):
    Also, this might also hurt tourism a bit. I have cousins in Germany that come over and, when they do, they load up on stuff because its cheaper here than it is in Germany.

    A valid point that has to be factored in.
    But the success of tourism in a state like Florida (domestic and international) might be able to counter that.

    Quoting DeltaGator (Reply 31):
    Seriously! WTF? Since when did the IRS become the be all-end all for setting the price of a collector's item? The price depends upon the value someone who buys it determines it to be.

    I think he should "sell it to a friend" for about $5 then buy it back from the friend. I wonder if that would work.  scratchchin 

    Quoting Yellowstone (Reply 37):
    Absolutely true, but there's only so much you can do to cut your spending. Even among those who do save, there's a big difference between people who stash away some small amount per month as an emergency fund versus those who have enough time and money to invest large portions of their paychecks as a source of future income.

    Which again, there's a middle ground. Basic necessities up to a certain amount should be tax free- food, clothes, water, etc. But if you can't afford taxes because you're struggling to ends meet, you probably shouldn't be spending money on cable tv, that PS3, that fancy cell-phone, etc. I know I'm stereotyping a little, but I'm not overly far off.

    Quoting DeltaGator (Reply 23):
    Also, what do you do with the various local sales taxes that are used for state, county, and city services? Do those get tacked on to things?

    My guess is it would be calculated in the same as current sales tax. Example, an item costs $1.00. The state/county have a 7% sales tax, and the Federal Gov't puts a 10% tax on there. The price of the product would be $1.17. At least that's the way I'd run it. And still nowhere near as ridiculous as the taxes involved with booking an airline ticket.  wink 
    "Let's Roll"- Todd Beamer, United Airlines Flight 93, Sept. 11, 2001
     
    Alias1024
    Posts: 2231
    Joined: Mon Oct 25, 2004 11:13 am

    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 11:58 am

    Sorry Pope, getting your income tax rate cut is NOT getting soaked. Nice try though.


    Quoting Pope (Thread starter):
    That's right boys and girls, the share of the US federal income tax borne by the richest 1% of households has doubled under Bush!


    The richest 1% now pay 35.7% of all US federal income taxes, up from 19% in 1980 before supply-side tax cuts were implemented

    First you say it's doubled under Bush, then you immediately post a quote showing has nearly doubled since 1980, NOT since Bush took office. Which is it?
    It is a mistake to think you can solve any major problems with just potatoes.
     
    rfields5421
    Posts: 5563
    Joined: Thu Jul 19, 2007 12:45 am

    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 12:04 pm

    Quoting N231YE (Reply 3):
    Interesting, because there exists a loophole in the tax law: that if one makes over a certain amount (I believe it is in the Billions), they don't pay taxes at all

    There was a report not too long ago in Cleveland about this; and if I am not mistaken, the former Browns owner, Al Lerner, was one of the people that didn't have to pay taxes.

    Well, did he have any INCOME to pay taxes upon?

    If he's wealthy and in the past put his after taxes paid money in to savings and such - why should he pay taxes for taking his own money out of the bank.

    The football team is a corporation which pays its own taxes on it's income. If the corporation pays the owner either a salary or provides a profit payment - that will be taxable income.

    But many of the super rich work for deferred salaries. They don't get paid. They live off their savings and will draw their deferred salary after they retire when their income is lower.

    Quoting N231YE (Reply 12):
    Update: a quick google search solidifies the fact that some sort of loophole exists: the ultra-wealthy don't have to pay any tax on medicare or social security.

    Medicare and social security are 15.3% of the person's earned income. (Most companies pay half the amount for their employees).

    For example, your father's social security checks and pension might be enough so he has to pay income taxes, but neither is earned income so he does not have FICA on those.

    There is a maximum earned income cutoff. The first $97,500 of income in 2007 a person (and his employer) will pay $12,090 in Social Security and $2,827.50 in Medicare. So anyone with a substantial earned income pays $14,917.50 in SS & Medicare.

    Where as you average hourly wage working person will get back more than they put into social security in three years, the maximum payment folks will never get back what they put into SS because of the taxes on their benefits.

    Quoting YOWza (Reply 8):
    While I don't dispute the validity of this information I do question the context. 2004 vs 1980?

    I agree - the Ronald Reagan restructuring of the tax code had a lot more to do with the great increases in the total amount of money collected from the 'rich' than anything George Bush has done. The comparison needs to be 1999 and 2004.

    Quoting Pope (Reply 26):
    The flat tax (aka the National Retail Sales Tax) will never see the light of day

    Of course not - a flat tax on incomes or a National Retail Sales Tax will be have to be 37% to 39%

    And such a tax will be a great benefit to people who make enough money to save or invest - because it will mean as much as 50-80% of their income is tax free.

    It will be a disaster to old people on pensions or social security.
     
    Falcon84
    Posts: 13775
    Joined: Fri Sep 10, 2004 11:52 am

    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 12:49 pm

    Quoting RJdxer (Reply 39):
    Either Falcon is asleep or had a stroke and keeled over dead when he read this thread.

    Falcon was at work, thank you, which didn't obviously enter your mind.

    And if he soaked the rich, then that's wrong. No one should get "soaked" by taxes. Not the rich, not the poor, not the middle. No one.

    And I do find it hard to believe after the great windfall the tax cut has made for the wealthiest Americans.

    Highest tax rate, at the most, should be 20%. All loopholes-ALL OF THEM-removed.
    Work Right, Fly Hard
     
    gunsontheroof
    Posts: 3226
    Joined: Wed Jan 04, 2006 8:30 am

    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 1:04 pm

    Quoting Falcon84 (Reply 43):

    Falcon was at work, thank you, which didn't obviously enter your mind.

    I think most of them expect that you spend your day hunched over your keyboard, ready to pounce at the first sign of a thread such as this one.

    I don't find it very surprising that with the rich getting richer and the poor getting poorer, the respective percentage of total income tax collected from the richest 1% of the country is going to go up.

    The rich as a whole are paying a higher percentage of the total income tax, but they're also getting richer. You're trying to make it sound like they're taking a bigger hit for everybody else. "Oh shit, I only have X million dollars left after taxes! What to do?"

    California during essentially the same time period:
    http://www.sfgate.com/cgi-bin/articl...file=/c/a/2007/08/23/MND5RNBH3.DTL
     
    RJdxer
    Posts: 3523
    Joined: Thu Nov 09, 2006 1:14 am

    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 1:59 pm

    Quoting Gunsontheroof (Reply 44):
    but they're also getting richer.

    And you know what, there is absolutely nothing wrong with that since as they get richer they pay more taxes. There is nothing that says you can't be rich in this country. Ask the latest big money lottery winner.

    Quoting Gunsontheroof (Reply 44):
    You're trying to make it sound like they're taking a bigger hit for everybody else.

    And you're trying to make it sound like they should only be allowed to be so rich before they have all the rest taken away.
    Warm winds blowing, heating blue skies, and a road that goes forever. I'm going to Texas!
     
    gunsontheroof
    Posts: 3226
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    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 2:09 pm

    Quoting RJdxer (Reply 45):

    And you're trying to make it sound like they should only be allowed to be so rich before they have all the rest taken away.

    I don't care much for predatory capitalism or obscene concentrations of wealth and decision-making power. I find the whole system to be grotesquely anti-democratic. When a minority of the population is taking that much of the wealth while more and more people find themselves struggling to get by, something is wrong. Of course, the system is working exactly as it was intended to.

    So yes, you're more or less on the ball there. I believe there is a more equitable way to distribute wealth and resources. I'd like everyone to have everything they need, how awful.

    [Edited 2007-08-25 07:15:44]
     
    CaptOveur
    Posts: 6064
    Joined: Thu May 06, 2004 3:13 am

    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 3:29 pm

    Quoting YOWza (Reply 8):
    The article also makes no mention of cronyism, it is possible that "the rich" are paying more in tax but that certain friends of the administration are paying less. I'm not saying that's the case, but it is a distinct possibility.

    How is that tin foil hat fitting? A little tight it sounds like. There are people in this country who pay zero taxes. They honestly believe the federal income tax is illegal. Some of them get away with it most of their lives, some even have rather large incomes. Until they get caught.

    Quoting YOWza (Reply 8):
    The article also does not take into account the companies that have re-located offshore.

    Doesn't really work that way. A lot of companies incorporate in Delaware to save on state taxes. Do you see other states pissing and moaning? No, even if a company saves on taxes by incorporating somewhere they end up paying some kind of tax through the course of normal business activities.

    Quoting Pope (Reply 26):
    doing away with the tax code takes away Congress' biggest tool for rewarding or punishing behavior. It would essentially be a wholesale transfer of power from the Congress to the Executive branch that is unprecedented in US political history.

    A tool they didn't have prior to... I think it was 1937? They could go back to doing it that way if they wanted. We all know our government will never give up a way to screw us but it wouldn't be the end of the world if one day they decided to do what is right for the country instead of just what plays well politically.

    Quoting Aa757first (Reply 32):
    Also, this might also hurt tourism a bit.

    I live in San Antonio, Tx. The home of "screw the tourist" taxes. By the time you get out of a hotel here you have paid nearly 25% over and above the price of the room in taxes. We have no state income tax here but our sales tax is still a very reasonable 8.5% or thereabouts. This is also the biggest tourism spot in the state (I have no idea why). Property taxes are also very reasonable. The state is broke and our public schools turn out people who can barely read and certainly can't write- but our taxes are low and honestly that is all I care about.
    Things were better when it was two guys in a dorm room.
     
    N231YE
    Posts: 2620
    Joined: Tue Jul 25, 2006 9:24 am

    RE: Bush Tax Cut Soaked The Rich

    Sat Aug 25, 2007 11:17 pm

    Interesting, I can't seem to find the article on Cleveland.com (not even any online archives). I am going to guess the article was published in the Cleveland Plain Dealer ~3-4 years ago, and as I stated, I recall it stating how the ultra-rich didn't pay a dime in taxes. I will try to look further, but as another poster stated, no one should be getting any breaks nor "socked" with taxes, nor any loopholes.

    Quoting FlyDeltaJets87 (Reply 14):



    Quoting Pope (Reply 15):



    Quoting RFields5421 (Reply 42):

    Thanks for the explanation on Social Security* and Medicare, that seems to have two sides of the debate. I can see one side, that the wealthy probably won't ever need these things, so no need to pay on them. On the other hand, with Uncle Sam's addiction to "borrowing" from the Social Security "surplus" for the good of all (won't be for long-as the baby boomer generation retires, and this will all be sucked up. In fact, there is social security crisis going on now, as there is not enough money to redistribute to the huge generation of retirees).

    *=I starred this, as it is a BIG misconception about social security, when it was created by FDR in the depression era, it was never meant to be a source of income for retired persons as it has become.
     
    rfields5421
    Posts: 5563
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    RE: Bush Tax Cut Soaked The Rich

    Sun Aug 26, 2007 12:07 am

    Quoting N231YE (Reply 48):
    that the wealthy probably won't ever need these things, so no need to pay on them.

    Whether or not the will need it doesn't matter - the fact is they pay many times more into SS than most people, but there is a cap as to how much they pay each year.

    In 1984 & 85 an hourly employee working for Intenational Paper in it's maintenance department at a papermill could make enough money with substantial overtime to max out the social security contribution. My father did. That amount was about 47-48,000.

    However, the maximum amount has risen more than wages and will rise in the future. The federal government executive branch and Congress know that increasing that maximum contribution is a source of 'free' money they will not have to repay.

    Quoting N231YE (Reply 48):
    I will try to look further, but as another poster stated, no one should be getting any breaks nor "socked" with taxes, nor any loopholes.

    Reagan got rid of most of the loopholes. There are some, but very few and with the alternative minimum tax most of those don't apply over $200,000 per year.

    The main way to avoid paying taxes is deferred salaries.

    Take the CEO of the company I work for as an example. He has been awarded a bonus for performance for eight of the past 10 years by the board of directors.

    He has elected to defer the bonus payment each time, placing the money into the company stock fund instead.

    Over that time period the bonus amounts have added up to about $24,000,000

    He has paid no income tax on that $24,000,000 because he was never paid that money. Just the same as I have not paid taxes on about $40,000 over that same period which I have put into the 401K plan.

    Had he accutally taken the bonuses, he would have paid about $8,000,000 in taxes.

    By deferring the payments, two things have happened. The value of the stock was $49,500,000 at the end of our last fiscal year. The money must be paid out at least 10% per year for 10 years after he leaves the company.

    So total taxes to eventually be collected on that money will be at least $20,800,000 at today's tax rates.

    So when someone says our CEO made $4,600,000 last year, but only paid taxes on $1,250,000 = $500,000 - they are technically correct - but he did not actually get paid the $3,350,000 on which no taxes were paid.

    Many executives with our company who make over $150,000 yearly do defer their a portion or all of their bonuses. Which make up from 20 to 50% of their total compensation packages.

    And as I noted, normal employees can put 10% of their salaries into tax deferred savings (up to $15,500 per year + a $5,000 catch-up contribution if they are over 50).

    While the CEO and the top executives will not really benefit from deferring the money unless there is a future tax rate cut, I and most folks with me on the peon level will because I won't be paying 28% taxes when I take the money out of my 401K.

    Another way the ultra-rich avoid taxes is trust funds. I wish I could have someone setup a fund like Joseph Kennedy did for his family. Amazing that it has survived and grown so much for so many years.

    These trust funds are legal entities which pay taxes on the money they earn. However the payment to the individuals can be tax free, because it is POST-TAX money.

    i.e. The trust fund is 100 million dollars.
    It made 4.5 million dollars last year.
    It paid 1.665 million dollars in taxes.
    Of the remaining 2,835,000 dollars - 835,000 is retained in the fund.
    2,000,000 is paid out to the beneficiary of the fund.

    So it is reported that the person "made" 2 million dollars tax free. That is incorrect because taxes were paid on the 2 million dollars - just not by the individual.

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