View Full Version : Obama -Romney-US Taxpayer Comparison
Tax rates and amounts paid comparisons from Tax Policy Center and USA TODAY research sources.
And so it goes...
Richard :munchin
Comparing Tax Rates For Obama, Romney and You
USAToday, 20 Aug 2012
Mitt Romney says he has not paid less than 13% of his income in federal taxes during the past 10 years. Thanks to exemptions, deductions, child tax credits and the like, many Americans pay less than that. But when payroll taxes are considered, most Americans pay substantially more than 13%.
Romney's ability to reduce his tax liability stems largely from two things: The majority of his income is in capital gains and dividends, which are taxed at a 15% rate, lower than most income. And with only a small business income, he pays little in payroll taxes, which are subtracted from paychecks to support Social Security and Medicare.
Income is taxed at six different rates, ranging from 10% for the first $16,700 up to 35% for adjusted gross income above $372,950. A typical middle-income or upper-income American family pays several different rates.
President Obama wants to establish a mandatory minimum 30% tax rate for millionaires — the so-called "Buffett tax," named after billionaire investor Warren Buffett, who has complained that he pays a lower tax rate than his secretary. In 2010, Buffett paid an effective tax rate of 11% on nearly $63 million in adjusted gross income.
"What this whole discussion demonstrates radically is that we need tax reform," says Washington, D.C., tax expert Clint Stretch. "It is not a sensible system (when) you have world-class surgeons who are handling the lives of other people earning a lot of money and paying tax at 35%, and you've got other people who are making investments, and they're paying tax at 15%."
The last comprehensive tax reform in 1986 solved that problem, lowering the top income tax rate and raising the tax rate on capital gains and dividends so they all were 28%. But the capital gains tax rate was reduced to 20% under President Bill Clinton in 1997, and both capital gains and dividend taxes were slashed to 15% under President George W. Bush in 2003.
Here's a comparison of the taxes paid by Obama and Romney last year, along with examples of typical taxpayers. They don't include state and local taxes. In Romney's case, the figures are estimates released by his campaign:
President Obama
Income
Wages: $394,821
Other income: $449,764
Adjusted gross income (AGI): $789,674 (Obama's adjusted gross income was reduced $54,911 by adjustments that partially offset wages and other income)
Minus exemptions, deductions: $293,298
Equals taxable income: $496,376
Taxes paid
Income taxes (19.02% of AGI): $150,253
Payroll tax (4.35% of AGI; Payroll tax includes employee and employer share): $34,378
Tax rate (19.02% + 4.35%): 23.37%.
Federal tax paid: $184,631
After-tax income: $605,043
Mitt Romney
Income
Wages: 0
Business income: $110,500
Other income (34.2% tax rate): $9,274,725
Capital gains, dividends (15% tax rate): $11,515,850
Adjusted gross income (AGI): $20,901,075
Minus exemptions, deductions: $5,695,579
Taxable income: $15,205,496
Taxes paid
Income taxes (15.37% of AGI): $3,213,051
Payroll taxes (0.06% of AGI; Payroll tax includes employee and employer share): $13,572
Tax rate (15.37% + 0.06%): 15.4%
Federal tax paid: $3,226,623
After-tax income: $17,674,452
Typical middle-income couple, two dependent children
Income
Wages: $69,700
Other income : $100
Adjusted gross income (AGI) : $69,800
Exemptions, deductions : $29,000
Equals taxable income: $40,800
Taxes paid
Income tax (3.45% of AGI): $2,410
Payroll tax (13.27% of AGI; Payroll tax includes employee and employer share): $9.270
Tax rate (3.45% + 13.27%): 16.72%
Federal tax paid: $11,680
After-tax income: $58,120
Typical upper-income couple, two dependent children
Income
Wages: $135,300
Other income: $800
Adjusted gross income (AGI): $136,100
Exemptions, deductions: $40,800
Equals taxable income: $95,300
Taxes paid
Income taxes (10.59% of AGI): $14,410
Payroll taxes (13.23% of AGI; Payroll tax includes employee and employer share): $17,995
Tax rate (10.58% + 13.23%): 23.81%
Federal tax paid: $32,405
After-tax income: $103,695
Typical single person, no children
Income
Wages: $43,200
Other income: $100
Adjusted gross income (AGI): $43,300
Exclusions, deductions: $9,500
Equals taxable income: $33,800
Taxes paid
Income taxes (10.69% of AGI): $4,630
Payroll taxes (13.27% of AGI): $5,746
Tax rate (10.69% +13.27%): 23.96%
Federal tax paid: $10,376
After-tax income: $32,924
http://www.usatoday.com/news/politics/story/2012-08-17/obama-romney-tax-income-comparison/57161254/1?csp=YahooModule_News
One more reason for a flat tax! Here is my opinion. As long as all the individuals mentioned above filed their taxes legally, then what is the problem? If folks are pissed that they are paying more than someone like Mitt, then they need to lobby their representatives on tax reform. Is anyone going to fault someone for taking all the legal deductions they can?
What pisses me off that there is almost 50% of this country that doesn't pay any taxes at all.
Well, let's just re-elect Obama, then. :rolleyes:
The libs said they'd abolish poverty - the conservatives said they'd abolish bureaucracy - Odin said he'd abolish the Ice Giants.
Seen any Ice Giants lately?
Vote Odin in 2012! ;)
Richard :munchin
Apples and oranges.
Raising the Cap Gains tax does not make sense for investors....like the HMO that invests, or the Union, or the County Govt.
Maybe you'd like to pay 35% on your invested money, money that has already been taxed.
The reason Cap Gains is lower is to encourage investment. When one invests there is no guarantee of success, you could lose every dime of it so Cap Gains % was an offset to the gamble.
When you have a salary, like that poor surgeon, you are gueranteed that amt of money monthly/yearly...there is no gamble.
If you take some of your savings that have been taxed at 30% and invest them you will pay 13-15% on the return for you willingness to invest in our sysytem.
If you think raising cap gains will just be 'fair' then I'd say the 2nd and 3rd order of effects will only hurt the economy that much more.
Many Countries tax at a lower rate on Cap gains for that reason.
In my experience those world-class surgeons discussed in the cited article and others who generate substantial income - almost universally - utilize paid tax preparers/consultants whose job is to subtantially reduce the amount of tax paid by these types of folks. The very last thing we want is for bureaucrats to determine who pays more tax or who pays less tax merely by profession. Lower, flatter tax rates for all is the better answer for the country.
Moreover, the tax code has been polluted by lobbyists and gutless politicians.
Most any serious student of - or manipulator - of the current tax system be they an economist, an attorney, consultant, CFO, controller, investment banker or CPA, knows that lowering the tax rates and broadening the tax base results in a substantially more efficient revenue generation system and income stream for the country. Of course, that would result in less need for the rather expensive services provided by such folks.
Below is another take on paying taxes --
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."
Judge Learned Hand
(1872-1961)
Vote Odin in 2012! ;)
Danes rule!
Badger52
08-20-2012, 14:19
Is anyone going to fault someone for taking all the legal deductions they can?
What pisses me off that there is almost 50% of this country that doesn't pay any taxes at all.As to the first, not I. tonyz summed that up nicely citing Judge Hand.
As to the second ma'am, this statistic (~50%) is tossed about alot. (Sometimes it erroneously includes people who overpaid and get a refund or who make so little that - under current tax code - their tax liability is 0. Those the people?) I'm kinda curious about this 50% thing that gets bandied about. If it is people who have zero income, but who consume public services, what to do about them? At its core, it's not lamentable that they had no income ergo paid no taxes - it's that they still consume resources. This sometimes spawns, "no tax paid, no vote" platforms.
And absent record-keeping in behavior that eschews that, how does the Govt know the number of people simply trading goods for services, when the 'good' rendered in return for the service is cash?
The 'system' is largely at the mercy of individual honesty; it doesn't play catch-up very well.
Badger52 is spot on with his observations - fairness and honesty are cornerstones of a voluntary tax compliance system.
Too many games can be played with the current system - it can be perceived as unfair and lead to increased dishonesty - games and dishonesty both result in lower revenues.
Remove the incentive to play so many tax games - lower rates, broaden the base, make most all pay something. Reward responsible business risk (lower cap gains rates), reward hard work and saving.
Hey, it's tax not rocket science.
Tax rates and amounts paid comparisons from Tax Policy Center and USA TODAY research sources.
And so it goes...
Richard :munchin
Romney's ability to reduce his tax liability stems largely from two things: The majority of his income is in capital gains and dividends, which are taxed at a 15% rate, lower than most income. And with only a small business income, he pays little in payroll taxes, which are subtracted from paychecks to support Social Security and Medicare.
And perhaps because he's a typical Republican, and donates more to help others.
"Of the 10 least generous states, nine voted for Democrat Barack Obama for president in the last election. By contrast, of the 10 most generous states, eight voted for Republican John McCain."
http://www.boston.com/news/local/new_hampshire/articles/2012/08/20/study_less_religious_states_give_less_to_charity/
So much for stereotyping by the Temporary Prez and his followers.
GratefulCitizen
08-20-2012, 20:23
Tax rates aren't terribly important.
Tax burdens slosh around the economy and affect prices.
People with cash on hand or access to cheap, easy credit can buy things when prices are depressed.
People running at their financial redline can't take advantage of low prices and end up bearing the burden when prices rise.
Money isn't real.
Goods and services are real.
Peregrino
08-20-2012, 20:52
Back to my original contention - "Pay no taxes, get no vote". Then we can discuss a flat tax; everybody pays the exact same rate on ALL income with NO deductions. 10% ought to be sufficient to cover national defense, interstate commerce, foreign affairs, and such services as are necessary to manage the first three. Interesting that Romney by himself paid more taxes than 47% of the rest of the country PUT TOGETHER. That's obscene.
miclo18d
08-21-2012, 05:13
Back to my original contention - "Pay no taxes, get no vote".
Exactly. When you have skin in the game you start to think about your vote. It keeps gubment honest.
Exactly. When you have skin in the game you start to think about your vote. It keeps gubment honest.
Let's not go overboard. :D
"Honest-er", maybe.
It's an outstanding idea; you'd lose millions of voters, though...
Mitt Romney paid 30%, not 13% in Federal Income Taxes
http://www.forbes.com/sites/charleskadlec/2012/08/20/mitt-romney-paid-30-not-13-in-federal-income-taxes/
An interesting piece on Taxes, what gets taxed where and how it impacts your income. The goverment sure is handy at skimming money at all levels.
But then again there are Americans who pay $4,000 to the IRS through the year, get a $1,800 Tax refund and then say "I didn't have to pay any taxes this year, I got a refund.
"..............................I can only wish that Romney had engaged this issue by adding the following sound bite: “Properly calculated, my tax rate was about 30%.”.................................."
Dozer523
08-21-2012, 07:55
Is anyone going to fault someone for taking all the legal deductions they can?. Not faulting the people who play by the rules. But I have a problem with them what makes the rules.
What pisses me off that there is almost 50% of this country that doesn't pay any taxes at all.What pisses me off is there are people living on income so low it can't be taxed while the jobs they should be working (and paying taxes) are going overseas so some won't have to pay taxes on that income. (I'd like to see a reference for that 50% stat, not doubting you but . . . )
Vote Odin in 2012! ;)
Richard Super-PAC web site?Apples and oranges.
. . . The reason Cap Gains is lower is to encourage investment. When one invests there is no guarantee of success, you could lose every dime of it so Cap Gains % was an offset to the gamble. By that logic, Las Vegas should be a tax-free zone. (Not that I have a problem with that:D)
Chart of the Week: Nearly Half of All Americans Don’t Pay Income Taxes
February 2012
Heritage
http://blog.heritage.org/2012/02/19/chart-of-the-week-nearly-half-of-all-americans-dont-pay-income-taxes/
Excerpts:
Another eye-popping number was the percentage of Americans who don’t pay income taxes, which now accounts for nearly half of the U.S. population. Meanwhile, most of that population receives generous federal benefits.
“One of the most worrying trends in the Index is the coinciding growth in the non-taxpaying public,” wrote Heritage authors Bill Beach and Patrick Tyrrell. “The percentage of people who do not pay federal income taxes, and who are not claimed as dependents by someone who does pay them, jumped from 14.8 percent in 1984 to 49.5 percent in 2009.”
That means 151.7 million Americans paid nothing in 2009. By comparison, 34.8 million tax filers paid no taxes in 1984.
The rapid growth of Americans who don’t pay income taxes is particularly alarming for the fate of the American form of government, Beach and Tyrrell warned. Coupled with higher spending on government programs, it is already proving to be a major fiscal challenge.
“This trend should concern everyone who supports America’s republican form of government,” Beach and Tyrrell wrote. “If the citizens’ representatives are elected by an increasing percentage of voters who pay no income tax, how long will it be before these representatives respond more to demands for yet more entitlements and subsidies from non-payers than to the pleas of taxpayers to exercise greater spending prudence?”
Paragrouper
08-21-2012, 08:13
Why would they include the employer payroll contributions in their calculations?
Payroll tax includes employee and employer share
I checked my records, as one of the situations presented is very close to mine and the amount in the article is more than twice what i paid. Including the employer contributions in Romney's, or Obama's numbers is negligible when calculating the percentage of taxes paid. However, it skews the rest of the results significantly.
Dozer523
08-21-2012, 08:41
Another eye-popping number was the percentage of Americans who don’t pay income taxes, which now accounts for nearly half of the U.S. population. Meanwhile, most of that population receives generous federal benefits.
That means 151.7 million Americans paid nothing in 2009. That's a big-a$$'d number but it doesn't say who they are!
Are they dead-beat dad's and generational welfare queens not having anything to tax? Or are they smart AND rich avoiding taxes? Or are the old and living on fixed incomes? or "off the grid" types.
Might want to build a new chart.
longrange1947
08-21-2012, 08:52
The percent thing is a red herring, Romney paid over 3 million in taxes. The "POTUS" attempts to make it sound as if his secretary paid more in taxes by then quoting percentage. It is bull, as was stated above, Romney paid more than 48% of all Americans combined.
rubberneck
08-21-2012, 08:53
Back to my original contention - "Pay no taxes, get no vote".
Do you include the retired and the disabled military vets in that dictum? There are people out there who have done far more to earn the right to vote than I have and yet I would get the right to vote because I pay income taxes and they wouldn't because they no longer do. I am not trying to be a smartass I am just curious to see how you'd practically apply that idea.
That's a big-a$$'d number but it doesn't say who they are!
Are they dead-beat dad's and generational welfare queens not having anything to tax? Or are they smart AND rich avoiding taxes? Or are the old and living on fixed incomes? or "off the grid" types.
Might want to build a new chart.
Maybe all of the above...maybe not.
But improve that overall unemployed number and more people begin to pay income taxes.
Lower the cap gains rate...and maybe more people will pay taxes - there is a huge pent up demand to sell appreciated assets.
There are lots of ways to get more people paying taxes. Raising the rates is not one of them.
What pisses me off that there is almost 50% of this country that doesn't pay any taxes at all.
"Pay no taxes, get no vote"
Doesn't seem like a simple issue.
Decades of tax policy decisions have created a complicated system that vulnerable populations have grown to depend upon. The lowest-earning Americans have been taken off income tax rolls completely, and the tax bills of low-income workers, the elderly, and families raising children have been reduced through a series of tax credits, deductions and exclusions that have crept into the code and grown more generous with time. Only a small portion of the non-taxpayers are in the upper income brackets with lots of tax breaks.
This puts politicians on both sides of the aisle in a tight spot. While they promise not to raise taxes and to shrink government, the leading Republican contenders for the 2012 presidential nomination cite the recent report from the nonpartisan Tax Policy Center that 46 percent of American households won’t pay federal income taxes in 2011 to argue that more Americans should help pay for government programs.
When Texas Gov. Rick Perry declared his candidacy earlier this month, he said he is “dismayed at the injustice that nearly half of all Americans don’t even pay income tax.” In Iowa, he said, “Let everybody, as many people as possible… [help] pay for the government we have in this country.” Former Massachusetts Gov. Mitt Romney said in mid-August in Nashua, N.H., “We want to make sure people do pay their fair share. Half the people in this country pay no income tax at all.” Michele Bachmann said in July, “We need to broaden the (tax) base so that everybody pays something, even if it’s a dollar,”
President Obama is among those calling for lower tax rates in exchange for eliminating loopholes and tax breaks for individuals and corporations. In a speech last week at an Arkansas Rotary Club, Sen. Mark Pryor, D-Ark., complained that tax breaks have taken too many people off the tax rolls. “It’s hard to have a fair tax system where only about half the people are paying,” he said.
The Tax Policy Center’s estimate means that some 76 million households won’t pay federal income tax in 2011. But they still owe other taxes. About two-thirds pay payroll taxes, and most pay state and local income and sales taxes as well as excise taxes on gas, tobacco, cigarettes and alcohol. Of the one third who don’t pay payroll taxes, more than half are elderly who no longer work, and just under half are families with incomes under $20,000. Only about 1 percent of the population pays neither income nor payroll taxes and earns more than $20,000 a year, according to the Tax Policy Center.
•For 50 percent of those that don’t pay federal income taxes, standard deductions and personal exemptions are enough to counteract their taxable earnings. A couple with two children earning less than $26,400, for example, will pay no federal income tax in 2011 because their $11,600 standard deduction and four exemptions of $3,700 cuts their taxable income to nil.
•22 percent are senior citizens who get a more generous standard deduction, can exclude some or all of their Social Security income and may have tax-exempt interest from mutual funds and municipal bonds. For those who itemize, charitable contributions and medical expense deductions also subtract from their tax liability.
•15 percent are working families, many of them low-income, who qualify for one or all of the Earned Income tax credit, the Child tax credit, the Child and Dependent Care tax credit. The earned-income credit is fully refundable, and the Child credit is partially refundable this year, meaning some households may get refunds from the government even if they owe no income taxes.
•The remaining 13 percent are a mix of mostly higher-income individuals with enough itemized deductions for items like mortgage interest, health payments, or charitable contributions, education tax credits, or tax exempt interest to zero out their income taxes.
“It’s wrong to rail on the 46 percent of people who don't pay income tax,” said Paul Caron, a tax professor at the University of Cincinnati College of Law. “A fairer analysis takes into account all taxes paid—and by this measure, everyone has tax skin in the game,” he said.
It will be hard to change or eliminate the social policy-related tax provisions that knock millions of Americans off the federal income tax rolls, said Roberton Williams, a senior fellow at the Tax Policy Center. Not only would it risk alienating key voting blocs, such as senior citizens, but it could have a serious economic impact, he said. “It’s going to hurt the economy more if you raise taxes on the poor than the rich, because the poor spend every penny they’ve got,” Williams said. “If you take a dollar away from them in tax credits, that’s a dollar they don’t spend.”
Not everyone considers these tax breaks untouchable, however. “This proliferation of credits and benefits at the bottom has really gone too far,” said Chris Edwards, a senior fellow at the libertarian Cato Institute. “There are all kinds of pro-market policies the government can do to offset any harm caused to these people if it’s going to withdraw benefits,” he said. Repealing tariffs on goods from China and other countries would lower the cost of clothing and food for low-income Americans to balance the absence of tax credits, he said.
http://articles.businessinsider.com/2011-08-31/home/30073202_1_income-tax-federal-income-state-and-local-income#ixzz24C1KXhk7
According to Tables A6 - A8 (pp 48-50) of the Testimony Of The Staff Of The Joint Committee On Taxation Before The Joint Select Committee On Deficit Reduction, individual income tax collections are about 41% of the US Govt's revenues for 2010.
https://www.jct.gov/publications.html?func=startdown&id=4363
Complicated, it is.
And so it goes...
Richard :munchin
Doesn't seem like a simple issue.
Decades of tax policy decisions have created a complicated system that vulnerable populations have grown to depend upon. The lowest-earning Americans have been taken off income tax rolls completely, and the tax bills of low-income workers, the elderly, and families raising children have been reduced through a series of tax credits, deductions and exclusions that have crept into the code and grown more generous with time. Only a small portion of the non-taxpayers are in the upper income brackets with lots of tax breaks.
This puts politicians on both sides of the aisle in a tight spot. While they promise not to raise taxes and to shrink government, the leading Republican contenders for the 2012 presidential nomination cite the recent report from the nonpartisan Tax Policy Center that 46 percent of American households won’t pay federal income taxes in 2011 to argue that more Americans should help pay for government programs.
When Texas Gov. Rick Perry declared his candidacy earlier this month, he said he is “dismayed at the injustice that nearly half of all Americans don’t even pay income tax.” In Iowa, he said, “Let everybody, as many people as possible… [help] pay for the government we have in this country.” Former Massachusetts Gov. Mitt Romney said in mid-August in Nashua, N.H., “We want to make sure people do pay their fair share. Half the people in this country pay no income tax at all.” Michele Bachmann said in July, “We need to broaden the (tax) base so that everybody pays something, even if it’s a dollar,”
President Obama is among those calling for lower tax rates in exchange for eliminating loopholes and tax breaks for individuals and corporations. In a speech last week at an Arkansas Rotary Club, Sen. Mark Pryor, D-Ark., complained that tax breaks have taken too many people off the tax rolls. “It’s hard to have a fair tax system where only about half the people are paying,” he said.
The Tax Policy Center’s estimate means that some 76 million households won’t pay federal income tax in 2011. But they still owe other taxes. About two-thirds pay payroll taxes, and most pay state and local income and sales taxes as well as excise taxes on gas, tobacco, cigarettes and alcohol. Of the one third who don’t pay payroll taxes, more than half are elderly who no longer work, and just under half are families with incomes under $20,000. Only about 1 percent of the population pays neither income nor payroll taxes and earns more than $20,000 a year, according to the Tax Policy Center.
•For 50 percent of those that don’t pay federal income taxes, standard deductions and personal exemptions are enough to counteract their taxable earnings. A couple with two children earning less than $26,400, for example, will pay no federal income tax in 2011 because their $11,600 standard deduction and four exemptions of $3,700 cuts their taxable income to nil.
•22 percent are senior citizens who get a more generous standard deduction, can exclude some or all of their Social Security income and may have tax-exempt interest from mutual funds and municipal bonds. For those who itemize, charitable contributions and medical expense deductions also subtract from their tax liability.
•15 percent are working families, many of them low-income, who qualify for one or all of the Earned Income tax credit, the Child tax credit, the Child and Dependent Care tax credit. The earned-income credit is fully refundable, and the Child credit is partially refundable this year, meaning some households may get refunds from the government even if they owe no income taxes.
•The remaining 13 percent are a mix of mostly higher-income individuals with enough itemized deductions for items like mortgage interest, health payments, or charitable contributions, education tax credits, or tax exempt interest to zero out their income taxes.
“It’s wrong to rail on the 46 percent of people who don't pay income tax,” said Paul Caron, a tax professor at the University of Cincinnati College of Law. “A fairer analysis takes into account all taxes paid—and by this measure, everyone has tax skin in the game,” he said.
It will be hard to change or eliminate the social policy-related tax provisions that knock millions of Americans off the federal income tax rolls, said Roberton Williams, a senior fellow at the Tax Policy Center. Not only would it risk alienating key voting blocs, such as senior citizens, but it could have a serious economic impact, he said. “It’s going to hurt the economy more if you raise taxes on the poor than the rich, because the poor spend every penny they’ve got,” Williams said. “If you take a dollar away from them in tax credits, that’s a dollar they don’t spend.”
Not everyone considers these tax breaks untouchable, however. “This proliferation of credits and benefits at the bottom has really gone too far,” said Chris Edwards, a senior fellow at the libertarian Cato Institute. “There are all kinds of pro-market policies the government can do to offset any harm caused to these people if it’s going to withdraw benefits,” he said. Repealing tariffs on goods from China and other countries would lower the cost of clothing and food for low-income Americans to balance the absence of tax credits, he said.
http://articles.businessinsider.com/2011-08-31/home/30073202_1_income-tax-federal-income-state-and-local-income#ixzz24C1KXhk7
According to Tables A6 - A8 (pp 48-50) of the Testimony Of The Staff Of The Joint Committee On Taxation Before The Joint Select Committee On Deficit Reduction, individual income tax collections are about 41% of the US Govt's revenues for 2010.
https://www.jct.gov/publications.html?func=startdown&id=4363
Complicated, it is.
And so it goes...
Richard :munchin
Some good info.
I would be willing to give up some of my write offs (house and kid) if it means that more people will be paying into the system. I don't necessarily agree the current system is good, but I will never fault someone who is LEGALLY using the credits and deductions that are in the current tax code.
One more reason why I support a flat tax.
Dozer523
08-21-2012, 10:29
Doesn't seem like a simple issue. (What I'd give for a "simple issue")
•For 50 percent . . . . A couple with two children earning less than $26,400,
•22 percent are senior citizens . . . .
•15 percent are working families, many of them low-income. . . .
•The remaining 13 percent are a mix of mostly higher-income individuals with enough itemized deductions . . .
I just wonder who's living better before and after taxes, the front 77% or the back 13%.
Taxes are complicated - unnecessarily so IMO.
Lobbyists drafting the code and regs for special interests are a big part of the problem, using the tax code for social engineering is a big problem.
The complication can be substantially reduced by removing the games.
Those who work with the code know that simplification is possible but it will hurt their pocketbooks.
Until we have the collective political will to simplify the system it ain't going to happen. Doing the right thing is seldom easy for members of Congress.
ETA - simple and older (2009) publication from the World Bank for advising emerging nations.
"Tax experts agree that a good tax has a low rate and a broad base. This principle captures, to a large extent, the goals of equity, efficiency, and administrative feasibility."
https://www.wbginvestmentclimate.org/uploads/Handbook%20of%20Tax%20Simplification%20-%20Web%20version.pdf
I just wonder who's living better before and after taxes, the front 77% or the back 13%.
I'm reminded of the fable of the Grasshopper and the Ant.
tom kelly
08-21-2012, 12:55
This is the BEAST that has been created by Congress largely with the insistance of Lobbist, such as Jack Abramoff who said" I OWN CONGRESS." The Internal Revenue Code or TITLE 26 Sections 1 thru 9834 is listed by The Internel Revenue Service as having 22,000 pages in small font @ the same size as the listings in a phone book. In reality it is estimated that with more tax legislation with different titles the number of pages is 2.5 million and growing. Thank the LOBBIST like Jack Abramoff for this out of control FIASCO.
Having worked for the IRS as a Collection Analyst for @ 3 years I can say that I NEVER came in contact with anyone, CPA's, Lawyers. IRS Employees who had read or understood Title 26. in its entity.
Regard's, Good Luck with this issue? TK "It's Too Big To Fail."
I'm reminded of the fable of the Grasshopper and the Ant.
:D
The Reaper
08-21-2012, 17:26
Do you include the retired and the disabled military vets in that dictum? There are people out there who have done far more to earn the right to vote than I have and yet I would get the right to vote because I pay income taxes and they wouldn't because they no longer do. I am not trying to be a smartass I am just curious to see how you'd practically apply that idea.
News flash.
Retired military and Federal employee pay is subject to Federal taxes.
TR
GratefulCitizen
08-21-2012, 18:32
The states can solve the tax problem given the political will.
Through an Article V convention, amend the Constitution to revoke all taxing power (and powers to impose fines, fees, or seize property) from the federal government, save one.
Let the feds have the power to impose a head tax on the state governments (a state's tax burden is in proportion to its population).
The states will then have full power over the tax code.
If you don't like the tax law in your own state, move to another.
rubberneck
08-21-2012, 19:30
News flash.
Retired military and Federal employee pay is subject to Federal taxes.
TR
I guess I stated that Poorly. I'm talking about a WWII or Korean war vet who served on active duty for three or four years and then returned to the private sector after war. Some of those men didn't have jobs with pensions and now don't have enough income to pay income tax.
longrange1947
08-21-2012, 19:31
News flash.
Retired military and Federal employee pay is subject to Federal taxes.
TR
Thank you TR, I was about to say that as a retired military, and retired GS worker and SS beneficiary, I am paying BIG taxes. Yep, paying my own retirement with my taxes. And yep, before someone else says it I am a triple dipper. :munchin :D
XngZeRubicon
08-21-2012, 19:37
One more reason for a flat tax! Here is my opinion. As long as all the individuals mentioned above filed their taxes legally, then what is the problem? If folks are pissed that they are paying more than someone like Mitt, then they need to lobby their representatives on tax reform. Is anyone going to fault someone for taking all the legal deductions they can?
What pisses me off that there is almost 50% of this country that doesn't pay any taxes at all.
Totally agree with ya, afchic. In fact, your second point about almost 50% not paying any income tax makes me absolutely apoplectic. And the trend line is not good.
XngZeRubicon
08-21-2012, 19:41
It is bull, as was stated above, Romney paid more than 48% of all Americans combined.
Exac-alack-aly.
In fact, your second point about almost 50% not paying any income tax makes me absolutely apoplectic.
Perhaps you should read all the posts before jumping into such a fray. ;)
Richard :munchin
Thank you TR, I was about to say that as a retired military, and retired GS worker and SS beneficiary, I am paying BIG taxes. Yep, paying my own retirement with my taxes. And yep, before someone else says it I am a triple dipper. :munchin :D
No stigma there, Brother. :cool:
1stindoor
08-22-2012, 06:29
Some good info.
I would be willing to give up some of my write offs (house and kid) if it means that more people will be paying into the system.
So in effect, you're willing to pay more in taxes if others are added to the tax base?
So in effect, you're willing to pay more in taxes if others are added to the tax base?
If I am paying a flat tax instead, I won't be paying more, and everyone would be paying into the system.
1stindoor
08-22-2012, 09:17
If I am paying a flat tax instead, I won't be paying more, and everyone would be paying into the system.
Got it...I missed the part about the "flat tax."
Sparty On
08-22-2012, 16:50
The states can solve the tax problem given the political will.
Through an Article V convention, amend the Constitution to revoke all taxing power (and powers to impose fines, fees, or seize property) from the federal government, save one.
Let the feds have the power to impose a head tax on the state governments (a state's tax burden is in proportion to its population).
The states will then have full power over the tax code.
If you don't like the tax law in your own state, move to another.
Interesting idea, but if one's job isn't available in the other state for whatever reason, one is screwed through no fault of their own.
For example, an oil worker paying 15% flat tax in Texas sees that Maine has a flat tax of 5%, but there aren't many oil jobs up thataway.
As much as I dislike the status quo, I don't really view that as an equitable solution to the problem at hand.
Tally me as another fan of a flat federal tax.
XngZeRubicon
08-22-2012, 17:17
Perhaps you should read all the posts before jumping into such a fray. ;)
Richard :munchin
Fair hit, Richard.;) Just that I didn't need to read the rest to still feel strongly about not liking that half the country pays no federal income taxes. I'm an econ geek by training and I'm used to following the stats as a hobby (sick, I know, huh?) But I like reading all the posts....just that I ran out of time last night....and I finally got around to reading the whole thread a few minutes ago.
There are so many good quotes already made in the thread that already sum up my take on things. For example, such as everything PRB said in post #5. I couldn't figure out how to do multiple quotes in the right order though, LOL.
I agree with this particular quote in post 6 from Tony: "Most any serious student of - or manipulator - of the current tax system be they an economist, an attorney, consultant, CFO, controller, investment banker or CPA, knows that lowering the tax rates and broadening the tax base results in a substantially more efficient revenue generation system and income stream for the country. Of course, that would result in less need for the rather expensive services provided by such folks."
There were a number of other quotes I agreed with, but to answer your question, basically that 49% is made up of poor people, elderly, people with children, and about 10 million remaining households receive rax breaks like itemized deductions.
While we'd probably all agree that a certain amount of our citizenry is made up of people who require our assistance, if you intuitively think about it, do you think it should ever be half? Even among those categories that sound disadvantaged on the surface, I think there's no doubt there's abuse of the system even among a certain percentage of those.
GratefulCitizen
08-22-2012, 17:28
Interesting idea, but if one's job isn't available in the other state for whatever reason, one is screwed through no fault of their own.
For example, an oil worker paying 15% flat tax in Texas sees that Maine has a flat tax of 5%, but there aren't many oil jobs up thataway.
As much as I dislike the status quo, I don't really view that as an equitable solution to the problem at hand.
Tally me as another fan of a flat federal tax.
Truth be told, the details of any tax system aren't terribly significant so long as the federal government spends using fiat currency.
Federal spending as a percentage of GDP is the real tax burden.
(However, the predictability of a tax system is very important.)
The federal government consumes about 25% of the goods and services produced.
Some is payed for though tax revenue, some through borrowing.
Nominal individual tax burdens don't reflect the full burden at the individual level.
Government taxing, spending, and borrowing affects the yields people can get from their investments, the prices they pay for their particular consumption, and the compensation they can command for the sale of their goods and services.
Taxes have some effect on individuals, but this can be mitigated through careful choices.
The effects of government borrowing and spending are more difficult to mitigate at the individual level.
Politicians probably love it when the people fight about taxes.
The real power is elsewhere.