Thursday, April 14, 2011
Dollars and Sense
It's tax time. I rarely get upset or outraged at this time of year, mostly because my CPA takes care of all the paperwork and I just sign. Because of a small glitch on the part of Wells Fargo, we got a letter from the IRS saying we owe an extra ten grand on top of the taxes we already paid. It's an easy fix, but it gave me a reason to look at our taxes. Holy shit, we pay a lot. In fact, we pay more in taxes than our entire families made last year. Combined. I know, boo hoo. I'm not looking for sympathy here, just an honest discussion. I'm at work, so I don't have the time to get into this in detail, but you probably don't want to read a long diatribe anyway, so here are my issues: I'm pretty tired of hearing politicians argue over giving "tax cuts to the wealthy." It's bullshit. The "Bush-era tax cuts" are simply freezing the rate at a certain level. The argument is whether I should continue to pay 35% or if it should be bumped to 39% (I may have the numbers wrong, but I'm close enough). People spin this extra 4% many different ways. I could give a shit. You know why? Because I don't mind paying more taxes. I know that sounds crazy, but it's the truth. I know I'm going to have to pay more taxes. I have no control or choice, so I might as well accept it. But it's also true that paying more taxes will not affect how I live my life. Since I don't mind paying more taxes, and I pay more than most, it does give me the ability to rant, and rant I shall. If I'm going to pay more, I don't mind telling you that I'm sick and tired of people who pay no taxes telling me I'm not paying enough. Well, let me add one caveat. I believe America has an obligation to care for the most needy, which has been arbitrarily called the bottom 10%. I'm okay with that. But how can I have faith in a system where almost 50% of Americans pay no taxes, yet tell me I'm not doing enough? 47% of Americans Pay No Income Taxes Sure, we can argue that this doesn't apply to Federal taxes, but since income tax is our largest tax, and the one that stands to go up further, it's where I'm concentrating. So let's stop with the nomenclature, and get to the substance (where is George Carlin when you need him?). I'll pay more taxes. I just want the majority of Americans to have skin the game before they accuse me of not doing my share.
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11 comments:
You definitely have a point. It sucks that some people are able to find a way out of paying their fair share.
But I have more of a problem with corporations like GE and Exxon Mobile not paying taxes, since they make billions of dollars in profit.
I'd rather solve that obvious inequity first.
http://sociology.ucsc.edu/whorulesamerica/power/wealth.html , Figure 6.
The bottom 50% already have skin in the game. The argument is about whether or not the current system is too progressive or too regressive.
You hit the nail on the head. There are too many that are just taking. Add in the inefficient use of tax money and can make you madder.
I assume you have your favorite charities to give and work with. Instead of giving the government money, continue to work with them. It will make you feel better.
28.6% of the population is under the age of 20 (http://www.censusscope.org/us/chart_age.html). The vast majority of teenagers with jobs do not make enough to pay income tax (I know I never did with my part-time minimum wage jobs in my younger days). Add in a few percent for low wage college students and we get over 30% of Americans paying no income tax as they work their way to adulthood.
12% of the population is 65 or older, so likely to be retired. I don't know what percentage of seniors draw enough out of IRAs and 401ks to have taxable income, but let's say half, so that's another 6% not paying taxes (after a lifetime of paying taxes).
That get's us to 37% of the population not paying income tax for legitimate reasons. Most of the people not paying income tax are not old enough to vote, so have no say in the tax rates. Another significant population of non-payers spent their life paying taxes.
That leaves 10% of the population not paying income tax without the excuse of youth or retirement. That's your bottom 10% most needy Americans.
I just hate dishonest reporting that makes thing look worse than they are. 47% sounds absurd until you think about it. The number is in the ballpark of what you would expect if you analyze age distribution.
Also, anyone with any employment at all pays social security and medicare as a percentage of their income. Yes, not "income tax," but a tax based on their income.
Just be happy you aren't a Canadian resident. Or your head would explode even more completely.
-PL
My uncle said it this way (he's a CPA with to kids in University, one on the way to MIT, the other Harvard Med)
So, I work, I pay my taxes, I don't complain. I scrape the barrel for twenty years to give my kids all the opportunity for the best education possible, and nobody helps me with this. My kids go to school and work their ass off to get top grades to go to even better schools. They rack up student loans at an unbelievable amount. They graduate, they do internships and make nothing, still working to get to the top of their professions (they both will, I have no doubt). Eventually, they finally edge into the top paying positions, pay off their student loans and start making some real money. They then owe that to society. The majority of which sit on their able bodied asses making no real effort to get ahead in life. It's called success tax, and that's just the way it is. Unsuccessful people will never need to pay a success tax, it's their own personal bank account really.
Buy an airplane (for your business) doc. Every successful person should have a private (business) jet, and Obama has made it 100% instantly appreciable, which means less success tax, and a private jet. Let's face it, you don't get to complain about high taxes if your successful, and being successful means you are a creative thinker, which of course can only lead to mire success and higher taxes....
What we need is a Ferrari Tax.
As everyone knows (or should) the top 10% pay 95% of the taxes.
A rather penurious bunch made it to the house and are trying to rein things in. But, until they are willing to face all the entitlements, it is just a sound bite on the news.
Obama's speech yesterday doesn't add any promise other than false promises. All they are doing is blaming the other guy.
A big crunch will take place if we continue down the current balance sheet path. When oil switches to Euros and China says no more paper, it will hit the fan. At that point the Fed is issuing junk bonds.
And, your paying a bit more or a lot won't stop that.
But Bayne is right and they should nail the classic ones the most.
I pay quite a lot of taxes. So that means I'm not in the group that can't tell you "you're not paying enough taxes".
There is a great big deficit out there that a lot of people somehow pin on the current administration, even if it is largely the result of (a) a huge anti-progressive tax cut by the same people whining about the deficit now (funny how that works), (b) a set of wars that, in my opinion, overall needed to be fought (thank you for your part by the way, that would be a better argument for you getting a tax break IMHO), but certainly needed to be paid for--not really consistent with (a), and (c) an economic collapse blamed on Wall Street, which is the equivalent of blaming the fox for eating the chickens, when the same people that were behind (a) shot the guard dog.
Fact of the matter is 39% (plus 0-8% for whatever state you're in) is still reasonable on the world stage, for you and me both.
The answer is here: www.fairtax.org
I did the calculator, sis. It comes out pretty good for us. Of course that means it will never pass.
-DrC
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