pupik
Why did I start this thread? Well:
I received a big 'ol bonus end-of-year bonus check. Usually about 12-15% gets taken out for taxes, the rest is "withholding", and Social Security for my weekly income, gits, bonuses, commission. But since my bonus was about 3x more than what I usually make, the feds took out about 32% in taxes! I figured I crossed over into another tax bracket, but the next week (and still the same year), the weekly check was taxed at the lesser rate I described before. So I'm penalized because I made more in a particular week, not because I made so much for the year.
It's either because the taxes were projected as though you made the amount of your bonus check for the entire year, or it's because you miscalculated how much the feds usually take from your check. Remember, each ADDITIONAL dollar you make in the year is taxed in the highest bracket that your income reaches. The first few thousand dollars you make each year isn't taxed. The next few is taxed at a low percentage, the next at a higher percentage... and so on. So when you get a raise, or a bonus, that money is added on the very top of what you make and is taxed in the largest income bracket your income reaches.
It made me realize that people who get paid on a monthly basis rather than a weekly basis (for the same money) are more heavily hit for more taxes due to our "progressive tax" system. It's utter bul*****.
This isn't true. People who are paid on a monthly basis pay the same amount of tax as people who are paid on a weekly basis if they make the same amount. It doesn't matter how big the paycheck is, only how much it adds up to at the end of the year.
Now I can understand that it's likely that a poorer person might need resources more than a rich person, but I don't buy that either. A rich person is going to demand the same social services of police, medical, schooling, etc. that a poor or a middle-income person is going to use.
For example: One person has one car, and another person has 4 cars. He can't drive all 4 cars at the same time, so he's not using a publicly-funded service anymore than a the other person does. It's impossible. A poor family of eight doesn't need more than one police officer to check on a household break-in any more than a rich couple of two does. Why should a well-off person have to pay teriffic sums of money for services he doesn't use in any sort of greater quantity?
There isn't an answer for this. Rich people tend to actually use less government services than poor people do. Poor people tend to rely on unemployment benefits, minimum wage, overtime laws, welfare, low-income subsidized housing, subsidized student loans, public defenders, police, fire, and a whole host of other government sponsored programs. They also tend to use roads more becaues they can't afford to live close to work - that's the same reason they tend to pollute more, especially if they're driving an older car.
None of this can be disputed, it's all fact. Poor people rely more on government services than the rich by a long shot. But that doesn't stop people from expecting the rich to overpay... and they do. The top 5% of earners pays over half of all income tax. That's right, 1/20th of the population pays the majority of taxes.
http://www.taxfoundation.org/publications/show/250.html
So why the heck doesn't everyone pay the same percentage? Who thought this was a great idea, anyhow...or did the super-rich people of the time figure they would make it all up in tax deductions, anyhow?
This is easy. Politicans thought this was a great idea. There are more poor people in this country than rich (it makes sense). If money was easy for everyone to get, then everyone would get it and it wouldn't be worth anything. Politicians can get more votes if they give money to the poor and tax the rich. You get more votes if you screw 1/20th of the population in favor of the other 19/20ths.
Is it fair? No. Is it constitutional? Arguably not. Would the founding fathers approve? Certainly not, they made income tax illegal. The bottom line is that most people are willing to accept money no matter who it is that got unfairly screwed out of it. Greed, when it blinds people from morality, is what has allowed democracy to turn into a tyranny of the majority. In any democracy the rights of the minorty must be protected (in this case property rights), or they will be trampled. That's the reason we have a bill of rights and a constitution. Too bad we aren't pay any attention to those documents anymore.
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