Tax Discrimination - It's that time again

  • Thread starter Danoff
  • 362 comments
  • 24,490 views
It was a sarcastic jab at the point myself and others were making... and I hope you understand why it was misguided.
 
Danoff
So according to the US constitution, the government is supposed to treat everyone fairly under the law, but our tax system is anything but fair. And in light of the fact that those of us in the US are going through our massive payouts to the government this time of year, I thought it would be nice to put up some updated statistics about who pays what in terms of income tax.

Here's a nice link about the taxes collected for '03: http://www.taxfoundation.org/publications/show/250.html

Take a look at table 6:

1) The top 1% of earners last year paid over 1/3 of all income tax in the US.
2) The top 5% paid over half of all income tax
3) THe top 50% paid over 96% of all income tax.

That means that the lowest half of the US pays almost no income tax at all! 3% income tax rate on average (table 1). What this doesn't show is that the lowest quarter (1 in 4 people in this nation) pay negative income tax. They actually GET more back than is withheld. No that's not welfare, it's not food stamps, this is totally seperate - it's just our income tax system redistributing money from some US citizens to others.

Check table 7 and figure out where you are in terms of the rest of the US population.

I'd love to see figures like this for other countries. If anyone out there would like to dig some up and post them I'd be grateful.
Click to expand...
I thought you voted Democrat?
Democrats are the ones that always make the system lean even further towards taking from the rich and giving to the poor, I recall Bush getting slammed for giving "the richest 1%" a tax cut, which in the real world means, "less wealth redistribution" as Obama would put it.

And FYI they only way to get more back than you paid - Is to have children. Then you get the child income tax credits.
I would know, as I've gotten more than I put in back 2 years in a row.

That's right, I'm on the positive side of this "wealth redistribution" and even I can say it's wrong, and a terrible path this country is taking.

I will say the article I read on Yahoo earlier this year trying to get my heart to bleed for a surgeon making 250K a year complaining he can't pay his bills was about useless. Making more shouldn't mean you have to give it to the government or other lower income people, but at the same time, the boo-hoo storyline doesn't work either. If I can make do finely on 30K a year with a wife and a kid, I can't sympathize for someone that can squander 11K a month.
But I digress, it's still not right.

Danoff
Equal in a way, but not fair.



Uh... what? It's part of the constitution - government should treat citizens EQUALLY. Discrimination is for free individuals, not for a government of the people and for the people.

A flat rate I think would be in alignment with the constitution (whereas the current tax system is not). But I'd argue that a flat rate isn't a fair system.

A fair system (flat fee)is possibly impractical, but we should try to approach it as closely as we can. That's why I'd be in favor of a flat rate capped at a predetermined total. In my opinion, it's absurd for Bill Gates to pay for 200 people's share of the government.

...and here's why this is important:

Bill Gates only gets one vote. Voters need the feedback on the size of government. If most voters are shielded from the effects of growing government, they don't get the proper economic information when going to the polls. It's important for everyone to pay taxes. When rates go up, it's important for everyone's rates to go up. Otherwise the economic signal inherent in growing government is not getting through to the people it needs to - and that will result in exactly what we have now, a government that grows without end.
Click to expand...

Wait - are you saying you're in favor of everyone paying in the same amount, regardless of income?

A set % would be fair, although it would be only around 3-5% not the 15-20% I saw someone say.
I thought it might be fun to figure out what the new number is now that our government is spending so much more.

Total 2009 US Budget: $3.1 Trillion
Percentage of Budget from Income Tax: 45%
Total Budget from Income Tax: $1.4 Trillion
Number of Adults in the US: ~220 Million
Number of Taxpayers in the US: ~165 Million

Tax Liability Per Adult: $6363
or
Tax Liability Per Taxpayer: $8484

So if you paid less than $8484 (by yourself, not including a spouse), someone else is paying part of your burden of the government. Keep in mind that the 2009 Budget is actually Bush's. It goes up farther for 2010.
Click to expand...
I disagree. It should be a set % based on income, and I also think having more than 2 children should have no effect.
The way the tax system is now, you get paid to have children, if poorer people actually had to pay their share of money regardless of having 6 kids, they might not have more mouths to feed than they can.
I would be a perfect example, between the child tax credit, and brackets, I'm actually getting paid to have a son. How? Because having a son entitles me to pay no taxes, and gives me 2,600 bucks for free. All in all, I get about 4-4,500 for having a kid, while between his diapers, food, drink, etc he costs about $2,500, depending on how many toys he gets, which usually strings us up to about $3,500.
 
Last edited by a moderator:
TrievelA7X
I thought you voted Democrat?
Click to expand...

:lol:

You kidding?

TrievelA7X
Wait - are you saying you're in favor of everyone paying in the same amount, regardless of income?
Click to expand...

Did you read what you quoted? He was arguing for a flat rate (with a fixed cap, not a flat fee

danoff
Uh... what? It's part of the constitution - government should treat citizens EQUALLY. Discrimination is for free individuals, not for a government of the people and for the people.

A flat rate I think would be in alignment with the constitution (whereas the current tax system is not). But I'd argue that a flat rate isn't a fair system.
Click to expand...
 
OK. I'll repost it here. Warren Buffet has a pretty good idea about capitalism & how to make money. He also has a pretty good idea about what it means to be rich.

Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion, said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”

Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent. Mr Buffett told his audience, which included John Mack, the chairman of Morgan Stanley, and Alan Patricof, the founder of the US branch of Apax Partners, that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.
Click to expand...
 
Biggles
OK. I'll repost it here. Warren Buffet has a pretty good idea about capitalism & how to make money. He also has a pretty good idea about what it means to be rich.
Click to expand...

This is what the people who think that higher tax rates for the rich are unfair need to understand. The wealthy can afford to pay more, the lower and a lot of the middle classes really can't. The less money you have, the more you need every last penny to survive.

A flat tax rate is the thing that would be unfair. 20% taken from someone who makes 20 thousand a year hurts them a lot more than 20% taken from someone making 200 thousand.
 
Balocco
A flat tax rate is the thing that would be unfair. 20% taken from someone who makes 20 thousand a year hurts them a lot more than 20% taken from someone making 200 thousand.
Click to expand...

Therefore?
 
Danoff
So according to the US constitution, the government is supposed to treat everyone fairly under the law, but our tax system is anything but fair. And in light of the fact that those of us in the US are going through our massive payouts to the government this time of year, I thought it would be nice to put up some updated statistics about who pays what in terms of income tax.

Here's a nice link about the taxes collected for '03: http://www.taxfoundation.org/publications/show/250.html

Take a look at table 6:

1) The top 1% of earners last year paid over 1/3 of all income tax in the US.
2) The top 5% paid over half of all income tax
3) THe top 50% paid over 96% of all income tax.

That means that the lowest half of the US pays almost no income tax at all! 3% income tax rate on average (table 1). What this doesn't show is that the lowest quarter (1 in 4 people in this nation) pay negative income tax. They actually GET more back than is withheld. No that's not welfare, it's not food stamps, this is totally seperate - it's just our income tax system redistributing money from some US citizens to others.

Check table 7 and figure out where you are in terms of the rest of the US population.

I'd love to see figures like this for other countries. If anyone out there would like to dig some up and post them I'd be grateful.
Click to expand...

That's too bad. They should really redistribute a hell of a lot more than that. The surplus value generated by the employment/exploitation (choose your own word) of the working class is how the top percentiles gain their fortunes. If redistribution will improve the lives of the people who exist as cogs of the economic machine while leaving the rich still very comfortable, I am 100% for it.
 
Say what? Given Danoff's quoted $8000 per-taxpayer share, I am partially covering for someone who didn't have to pay taxes last year. I wouldn't qualify myself as wealthy, nor do I make my money by "exploiting" anyone, as you called it. By being single, not owning a home, and not having dependents, I get raped. How is that fair? Why is a low-income family who keeps squeezing out babies entitled to that part of my salary? I am all in favor of the things taxes pay for: schools, roads, health, parks, etc, but I am not in favor of income taxes being directly redistributed. A flat tax rate for everyone makes the most sense. And everyone, stop being hypocrites. If you were in that magical $200,000 bracket, you'd have a very different opinion about being taxed at 33%.
 
Kylehnat
Say what? Given Danoff's quoted $8000 per-taxpayer share, I am partially covering for someone who didn't have to pay taxes last year. I wouldn't qualify myself as wealthy, nor do I make my money by "exploiting" anyone, as you called it. By being single, not owning a home, and not having dependents, I get raped. How is that fair? Why is a low-income family who keeps squeezing out babies entitled to that part of my salary? I am all in favor of the things taxes pay for: schools, roads, health, parks, etc, but I am not in favor of income taxes being directly redistributed. A flat tax rate for everyone makes the most sense. And everyone, stop being hypocrites. If you were in that magical $200,000 bracket, you'd have a very different opinion about being taxed at 33%.
Click to expand...

You're wealthy compared to too many people who work as many hours as you do.

To be fair, you are not exactly what I had in mind in my post when I referenced "the top percentiles", so don't take it too personally.
 
Balocco
This is what the people who think that higher tax rates for the rich are unfair need to understand. The wealthy can afford to pay more, the lower and a lot of the middle classes really can't. The less money you have, the more you need every last penny to survive.
Click to expand...

I have two healthy kidneys, but only need one to survive. Someone with no kidneys on dialysis has no healthy kidneys and only needs one to survive.

Should one of my kidneys be forcibly "redistributed" to that person?

Why not?
 
Famine
Should one of my kidneys be forcibly "redistributed" to that person?

Why not?
Click to expand...

It would be kind of you if you donated it out of your own free will. Besides, isn't the reason why we have 2 kidneys is in case one fails?
 
driftking18594
It would be kind of you if you donated it out of your own free will.
Click to expand...

Wouldn't it?

driftking18594
Besides, isn't the reason why we have 2 kidneys is in case one fails?
Click to expand...

Biologically speaking, there is no "reason" (else we'd have two livers, hearts, spleens, penises...).

Nevertheless, I have 2 and I don't really need them. Anyone can get by with one - many people do without even realising it. Yet it's not regarded as selfish of me to have two while so many other people die because they don't have one. No-one would suggest that one of my kidneys should be taken from me and given to people who have none...

So why's it okay in the same people's minds to take money from people who have lots and dont' really need it, and give it to people who have less?
 
I'm pretty happy with the way my taxes worked out this year, as part of some stimulus thing I'm getting $400 more back from the government. That totally works for me. I think this is the first year I haven't had to pay anything either, maybe because I have a real job now.

Honestly the amount taken from my pay cheques for taxes doesn't really bother me, the only thing that does bother me about paying taxes is that the money goes to fund things I don't really support, mainly foreign aid and winless conflicts.
 
Biggles
OK. I'll repost it here. Warren Buffet has a pretty good idea about capitalism & how to make money. He also has a pretty good idea about what it means to be rich.
Click to expand...
I grew suspicious when you didn't actually give a link and so Googled and found the dinner you are discussing, from 2007.

That was important because his figures on her tax rate sounds like BS, but I wanted to check anyway. The tax rate in 2006 (the year she paid taxes on in 2007) for someone making $60,000 a year was 25%. The same tax bracket I am in. Granted, I am having trouble finding the $60,000 figure, but something tells me that Mr. Buffett is not being completely truthful (at a political fundraiser dinner? NO WAY!!!). The only way she is paying 30% in taxes is if she has a spouse that brings in over $100,000 and they file jointly, in which case Mr. Buffett is fully aware of his deception.

Of course, the tax rate for someone not trying to shelter their taxes is 35%, not the 17.7% he would claim. The 17.7% only makes sense if he opted take the capital gains tax rate and not his income tax rate. And if he did that, then he is lying about not trying to avoid paying higher taxes. Or one other possibility, he failed to mention his philanthropic deductions. He has given $30+ billion to the Gates Foundation to be doled out at 5% annually, beginning in the key year here, 2006. If he claimed it all at once then it would explain why he is paying so little. He claimed $30 billion in charitable donations as a deduction (something some would also consider a rich man's way to avoid paying higher taxes). If he is only claiming the 5% annually then he still could have claimed $1.5 billion as a deduction.


In short: Mr. Buffett was lying, or at best, hiding some very important facts.

Balocco
This is what the people who think that higher tax rates for the rich are unfair need to understand. The wealthy can afford to pay more, the lower and a lot of the middle classes really can't.
Click to expand...
That doesn't suddenly make wealth redistribution fair. It just explains why some people in 1913 thought they needed to completely reword a very specific Constitutional rule, via the 16th Amendment, to say the exact opposite of what it originally did.

The less money you have, the more you need every last penny to survive.
Click to expand...
Going by this, we should further imbalance the taxes until every person has everything necessary to live or until no one has excess amenities that are not necessary to live. In other words, you don't get Gran Turismo, or any video game, until every single person has shelter, food, water, and (I guess) health care. The problem there is that people nowadays even think things like high-speed Internet is a right, so no telling where the list of "necessities" would end.

A flat tax rate is the thing that would be unfair. 20% taken from someone who makes 20 thousand a year hurts them a lot more than 20% taken from someone making 200 thousand.
Click to expand...
Because punishing someone for being successful is fair? Taking money from one man to give it to another is fair?

Then what do you think about a consumption tax based system? Your taxes are determined by what you spend, not what you earn.
 
I have two healthy kidneys, but only need one to survive. Someone with no kidneys on dialysis has no healthy kidneys and only needs one to survive.

Should one of my kidneys be forcibly "redistributed" to that person?

Why not?
Click to expand...

Once again, with the hyperbolic, reductionist argument. :rolleyes: No, because money is not the same as body parts.

I grew suspicious when you didn't actually give a link and so Googled and found the dinner you are discussing, from 2007.

That was important because his figures on her tax rate sounds like BS, but I wanted to check anyway. The tax rate in 2006 (the year she paid taxes on in 2007) for someone making $60,000 a year was 25%. The same tax bracket I am in. Granted, I am having trouble finding the $60,000 figure, but something tells me that Mr. Buffett is not being completely truthful (at a political fundraiser dinner? NO WAY!!!). The only way she is paying 30% in taxes is if she has a spouse that brings in over $100,000 and they file jointly, in which case Mr. Buffett is fully aware of his deception.

Of course, the tax rate for someone not trying to shelter their taxes is 35%, not the 17.7% he would claim. The 17.7% only makes sense if he opted take the capital gains tax rate and not his income tax rate. And if he did that, then he is lying about not trying to avoid paying higher taxes. Or one other possibility, he failed to mention his philanthropic deductions. He has given $30+ billion to the Gates Foundation to be doled out at 5% annually, beginning in the key year here, 2006. If he claimed it all at once then it would explain why he is paying so little. He claimed $30 billion in charitable donations as a deduction (something some would also consider a rich man's way to avoid paying higher taxes). If he is only claiming the 5% annually then he still could have claimed $1.5 billion as a deduction.
Click to expand...

I think Mr. Buffet was making a more general point, which is that tax rates on dividends or capital gains are lower than income tax rates, which tends to favour the rich. Of course everyone is able to take advantage of their base deductions. I'm not sure what Mr. Buffet's motives would be for lying.

Unfortunately, I don't have time to go into this in more detail ... I have to do my taxes. :yuck:
 
Biggles
OK. I'll repost it here. Warren Buffet has a pretty good idea about capitalism & how to make money. He also has a pretty good idea about what it means to be rich.
Click to expand...

?
Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion, said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”

Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent. Mr Buffett told his audience, which included John Mack, the chairman of Morgan Stanley, and Alan Patricof, the founder of the US branch of Apax Partners, that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.
Click to expand...

Someone please put me in touch with Mr Buffett's tax attorney. His marginal rate is 35%, while, it is not possible that his cleaning lady was taxed at 30% unless her husband is super wealthy. $60,000/year is very near the threshold for 0% tax paid ($50,000 is the threshold).

Unless Buffett is exploiting some sort of MAJOR tax loophole, and his cleaning lady is a moron who voluntarily sends in extra tax, I call BS on both of those numbers. (And if those things were true, than the numbers are irrelevant)

Edit: Damn, Tree'd by Foolkiller
 
Last edited:
Biggles
Once again, with the hyperbolic, reductionist argument. :rolleyes: No, because money is not the same as body parts.
Click to expand...

Why not?

It's a resource in which I am rich and others are poor - even to the point of death. I don't need all that I have and they need it more. And, more importantly, one earns money by the sale of oneself...

Why should I not be forced to give up organs I don't require so others may live, yet forced to give up money I don't require so others may live?
 
Biggles
I think Mr. Buffet was making a more general point, which is that tax rates on dividends or capital gains are lower than income tax rates, which tends to favour the rich. Of course everyone is able to take advantage of their base deductions.
Click to expand...
Taken straight from your quoting.
Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes,
Click to expand...
He can choose to take the income tax rate or the capital gains tax rate. If he chose capital gains then he lied in the above statement.

And as I pointed out, his secretary's tax rate and salary does not match what he claims.

He might just be poorly misinformed, but that seems odd from a guy that can read financial markets as well as he can.

I'm not sure what Mr. Buffet's motives would be for lying.
Click to expand...
It was a political fundraiser dinner, where he was attempting to get a politician that he favored into office. That is the last place I expect to find truth.

Politics and lying go hand in hand.
 
Unless something's changed, Warren Buffet only has a $100,000 salary as Chairman of Berkshire Hathaway. The $46 million figure he cited as income must be from dividends, stock options, etc.--i.e. something other than conventional income. So if he was taxed at the capital gains rate for that income, then he wasn't being dishonest. That's the rate he should have been taxed for that income. If that's the case, he wasn't choosing the capital gains tax rate, as that's the rate he should have been taxed at in the first place.
 
Last edited:
Balocco
There should never be one.
Click to expand...

So it's unfair to take an equal percentage from everybody, yet it's fair to take higher percentages from rich people? Why? Because they have more disposable income? I really like Famine's kidney analogy, it's very true, and effective.
 
cpp214
Unless something's changed, Warren Buffet only has a $100,000 salary as Chairman of Berkshire Hathaway. The $46 million figure he cited as income must be from dividends, stock options, etc.--i.e. something other than conventional income. So if he was taxed at the capital gains rate for that income, then he wasn't being dishonest. That's the rate he should have been taxed for that income. If that's the case, he wasn't choosing the capital gains tax rate, as that's the rate he should have been taxed at in the first place.
Click to expand...
And in that case it is not an income tax rate vs income tax rate and he should have pointed that out. The difference in being taxed in a different kind of way is huge and that should be clarified. Now that is a huge issue with our tax system, and falls in the same category as reducing tax burdens for being married or having kids. Granted, I can't find the specific speech, so that may have been part of what he said.

But that still doesn't explain his discrepancy in his secretary's taxes.

And honestly, none of this gets into further deductions and so on as he appears to be discussing tax brackets. As Danoff pointed out, his secretary is dangerously close to a line where deductions and whatnot actually reduce her tax burden to zero.



Another side note that should be taken into account while dicsussing Mr. Buffett's desire to pay more taxes: Nothing stops him from sending in a larger amount than he owes. Instead, he prefers lecturing others that they should be forced to pay more.
 
cpp214
Unless something's changed, Warren Buffet only has a $100,000 salary as Chairman of Berkshire Hathaway. The $46 million figure he cited as income must be from dividends, stock options, etc.--i.e. something other than conventional income. So if he was taxed at the capital gains rate for that income, then he wasn't being dishonest. That's the rate he should have been taxed for that income. If that's the case, he wasn't choosing the capital gains tax rate, as that's the rate he should have been taxed at in the first place.
Click to expand...

We have lots of taxes. Sales tax, income tax, capital gains tax, estate tax, gasoline tax, property tax, sin tax, gift tax... and those are all things with tax actually listed in the name, we have lots of taxes that aren't called taxes too.

But why all of these taxes should have the same rate, or be considered in the same way is beyond me. If Buffet had received $46 million as an inheritance or a gift, do you think he should simply pretend that the rate on those should be compared directly to the rate of taxes that his cleaning lady DOESN'T pay?

I don't see how this can be considered anything but HIGHLY misleading and dishonest.
 

Similar threads

Danoff
Ballot Propositions and Amendments
Replies
4
Views
686
Danoff
Danoff
Rallywagon
Economics
15 16 17
Replies
506
Views
27K
CTznOfTime
CTznOfTime
GranTurNismo
Create Your Dream Presidency
Replies
13
Views
1K
GranTurNismo
GranTurNismo
wfooshee
OMG!!!! Olympic medalists have to pay a tax!!!!!
2
Replies
47
Views
4K
Mr Bean
Mr Bean
Danoff
Buffett Rule - Class Warfare
2
Replies
40
Views
2K
GTsail
GTsail

Latest Posts

Back