Economy Trump tax cuts 6 months later: it was exactly what critics projected - everyone but the rich suffers

[oleDirtyBast4rd]

Oh I am on topic.

We're discussing "fairness" as it relates to taxation. As taxation is directly based on wages, it's important to address wage fairness as well. You could keep tax revenue the same with lower rates by mandating reinvestment of all unfair profits into the workers after all (more wages = larger tax base = less individual load).

So how can you say that taxation of higher earners is unfair when the state of higher earning is inherently unfair in itself? If the rich people don't like being taxed, they can move, isn't that how it works?

Stay on topic now.

So you would rather talk about wage fairness? Cool find somebody to discuss that with.

 

[BangersAndSmash]

Obviously they just need to let it go. They didn't live through that land deal, why are they acting like they own it? We need to come together on this.

Whether I believe they earned it or not is irrelevant to my point, which is that a flat tax code (by necessity) treats people who live off the investments of their long-dead relatives, and people who work their ass of, the same way. I don't think that realistically meets any definition of "fair".

 

[oleDirtyBast4rd]

How does one earn an inheritance that was built on their great grandfather's land deal in 1850?

The grandfather would have earned it in that situation and passed it on to his children who then pass it on to their children.

 

[panamaican]

Ah that was a bad example I admit because they were both in the same bracket.

So if you had earned a mil in the example. Why should you have to pay say 400k (40%) as opposed to your fair share of 100k (10%)

The justification for that extra 300k of tax is what?

It's not a bad example. It demonstrated exactly what I stated and refuted exactly what you're complaining about. You're stepping back on your example precisely because it showed the flaw in your understanding of the tax code. Instead you're pulling out this new example to distract from the fact that you didn't understand the tax code. Changing the numbers might fool some people but you've already shown me that you don't know what you're talking about.

Also - I wouldn't be paying 40% on 1 million. If you understood the tax code, you'd understand that.

More importantly, my tax rate on $1 million in earnings would be identical to the tax rate of someone with $501k in earnings and it would be identical to that of someone with $100 million in earnings. If we're all paying the same flat tax rate...what are you complaining about?

 

[Falsedawn]

So you would rather talk about wage fairness? Cool find somebody to discuss that with.

You cry about taxation of the outputs, but care nothing for the quality of the inputs. In reality, you don't give a shit about fairness, you just want to bitch about taxation because libertardians don't know how to function in a society like regular people.

Sorry for your defects, get some help.

 

[oleDirtyBast4rd]

Whether I believe they earned it or not is irrelevant to my point, which is that a flat tax code (by necessity) treats people who live off the investments of their long-dead relatives, and people who work their ass of, the same way. I don't think that realistically meets any definition of "fair".

You don't see how taxing every dollar earned the same is fair?

 

[BangersAndSmash]

The grandfather would have earned it in that situation and passed it on to his children who then pass it on to their children.

He's passing it down to someone who didn't earn it though.

 

[helltoupee]

I would actually be paying more in tax. I'm not wealthy.

What is the justification for taxing 1 guy 5% and another 40%? How is that not double dipping?

"You're gonna pay more because you earned more... but you are ALSO gonna pay a higher %, because fairness"

I think you misunderstand what effective tax rates are. No corporation, or ultra wealthy people actually pay an effective tax rate of 40% (or whatever top brackets you are referring to). Furthermore, a significant portion of the aforementioned are not subject to payroll taxes, which wage earners are.

If you add in payroll taxes to your average middle class earner's Federal/State brackets, they are actually paying higher effective rates, while being unable to disallow significant portions of their income through breaks and loopholes, resulting in the middle class paying higher rates on a greater portion of their income.

As to the fairness of your flat tax, it is not fair because it does not have the same impact on everyone. The impact of a 10% tax on a guy who makes $30K/year is much different than the impact of 10% on the guy who is making $500 million/yr.

Maybe @kpt018 can further expand - I think he's a tax professional.

 

[Staph infection]

A president fucking us over! He is just keeping with the presidential tradition of fucking over the citizens.

No real surprise here but at least we are not getting killed by refugees while getting fucked by the president.

 

[oleDirtyBast4rd]

It's not a bad example. It demonstrated exactly what I stated and refuted exactly what you're complaining about. You're stepping back on your example precisely because it showed the flaw in your understanding of the tax code. Instead you're pulling out this new example to distract from the fact that you didn't understand the tax code. Changing the numbers might fool some people but you've already shown me that you don't know what you're talking about.

Lol fuck off with this telling me why I'm posting things. If that's the way you feel just stop responding.

I fixed my example to get you to answer to it. Not squirm around it so you dont hsve to address it

Also - I wouldn't be paying 40% on 1 million. If you understood the tax code, you'd understand that.

I never said the whole mil would be taxed at 40%. You're being extra tedious about this because you already have it in your head I don't understand the tiered system.

More importantly, my tax rate on $1 million in earnings would be identical to the tax rate of someone with $501k in earnings and it would be identical to that of someone with $100 million in earnings. If we're all paying the same flat tax rate...what are you complaining about?

We arent all paying a flat tax you dolt. That is the whole topic of this discussion between us.

Some dollars are taxed way higher then others. Justify this

 

[BangersAndSmash]

You don't see how taxing every dollar earned the same is fair?

In this hypothetical situation where the modern tax code is a flat tax code with no subsidies, let's assume that the grandpa "earned" his money with the help of tax subsidies that were available in 1850 (there were plenty of land subsidies in those times). Since those subsidies are no longer available in the flat tax code, the inheritance situation is inherently unfair because that was money earned with tax subsidies that are no longer available in modern time. The money was not earned fairly.

 

[oleDirtyBast4rd]

I think you misunderstand what effective tax rates are. No corporation, or ultra wealthy people actually pay an effective tax rate of 40% (or whatever top brackets you are referring to). Furthermore, a significant portion of the aforementioned are not subject to payroll taxes, which wage earners are.

If you add in payroll taxes to your average middle class earner's Federal/State brackets, they are actually paying higher effective rates, while being unable to disallow significant portions of their income through breaks and loopholes, resulting in the middle class paying higher rates on a greater portion of their income.

As to the fairness of your flat tax, it is not fair because it does not have the same impact on everyone. The impact of a 10% tax on a guy who makes $30K/year is much different than the impact of 10% on the guy who is making $500 million/yr.

Maybe @kpt018 can further expand - I think he's a tax professional.

Get rid of tax writeoffs. Tax every dollar earned the same. Everybodies effective tax rate would be the same

 

[kpt018]

I think you misunderstand what effective tax rates are. No corporation, or ultra wealthy people actually pay an effective tax rate of 40% (or whatever top brackets you are referring to). Furthermore, a significant portion of the aforementioned are not subject to payroll taxes, which wage earners are.

If you add in payroll taxes to your average middle class earner's Federal/State brackets, they are actually paying higher effective rates, while being unable to disallow significant portions of their income through breaks and loopholes, resulting in the middle class paying higher rates on a greater portion of their income.

Maybe @kpt018 can further expand - I think he's a tax professional.

I used to do some tax work but now I run a finance department for a CPG company. I am a CPA but I basically know enough to be dangerous lol!

You have this pretty much right. Effective tax rates are the rates you actually pay as you income is applied to the different tax brackets, deductions and credits are applied. And yes, you would need to have a lot of income (like very wealthy and it's mostly, if not all salary) to get close to 40%. Most of the people that have huge income have capital gains (founders that sell their company, for example) and it's taxed at the capital gains rate which is much lower (top rate 20%, plus net investment tax of 3.8% for ACA).

IMO most of the people who argue for lower taxes and highlight the top marginal rates are doing so pretty dishonestly. Famously, Warren Buffett pays a higher rate than his secretary (due to capital gains treatment) and Mitt Romney made something like $15m and only paid like 18% (don't quote me, roughly in that area) and you're right to say almost no one's effective rate is close to the top marginal rate.

 

[oleDirtyBast4rd]

In this hypothetical situation where the modern tax code is a flat tax code with no subsidies, let's assume that the grandpa "earned" his money with the help of tax subsidies that were available in 1850 (there were plenty of land subsidies in those times). Since those subsidies are no longer available in the flat tax code, the inheritance situation is inherently unfair because that was money earned with tax subsidies that are no longer available in modern time. The money was not earned fairly.

I get what you are saying, but like slavery we have to move forward.

You kind of just made an argument for me. Subsidies themselves arent right

 

[BangersAndSmash]

You kind of just made an argument for me. Subsidies themselves arent right

Many subsidies and tax loopholes are pure bullshit. I doubt there's a person in this thread who would argue with getting rid of a good number of them. There are some that are necessary and helpful, though.

Some of the farm subsidies are a good example of this, because farmers provide a food supply to the country, so you wouldn't want them to all go under after one bad season. You also want some of them to keep producing important and nutritional crops as opposed to all changing to cash crops like tobacco, so instead of forcing them to grow the good stuff, you incentivize it with subsidies.

 

[ScottE]

This is probably the main part I disagree with you. Financial management does make up for it. Well, let me rephrase. The biggest problem is people attempt to live beyond their means. 30k household wants to be 50k household. 50k household wants to be 70k household. Etc. Many people who make literally 1/3 of my paycheck and feel they are doing semi-decent have better cell phones, clothes, and flexibility than I do, yet they will be the ones saying it's so hard to do better than what they are doing. People on the lower to lower mid can't keep up with car payments, but then get their paycheck and buy movie tickets to see the Avengers and Ant-Man back to back months while I didn't see either but I'll watch when they come on tv. People who go to work and buy lunch almost every day instead of bringing in homemade lunch, but make minimal money. Then there's the younger group in the early 20s, even worse. In no way do I think a lower middle class person could be Bill Gates, but most could be doing significantly better if they prioritized their budget better.

Look I believe strong financial management skills are made even more important due to the erosion of purchasing power individuals are experiencing. You have to do more with your money, because practically speaking you have less of it. But you can't say it can make up for that erosion because even if you do all the right things, you still are worse off then you would be doing all those right things in decades passed. That's essentially the issue.

And part of personal finacial management is looking long term, and that's why I can't take my $50 with a smile. Because I can see the writing on the wall saying that $50 is going to cost more more then $50 in the future, even adjusting it to today's dollars. Its fools gold that people are holding up, as you've seen from others in this thread, as evidence that these tax cuts were a good idea. When really they aren't for the average person and likely are a time bomb in a number of areas.

 

[Big Nasty Edison]

Huh? Why do you support taking the rich guys money to make the poor guys life better? What is your justification?

No one has suggested that. You know what is suggested though? That we have a tiered system where people pay a fair amount based on what is affordable at their socioeconomic level. You know, like the system we've successfully used for a very long time now.

 

[panamaican]

You're not understanding me then and that is fine.

The person who works 2x as hard IS taxed more in relation to their normal work load. You're basically saying the 2nd half of their labor isnt worth as much as the first half.

Why should 100k be taxed different depending if I've already earned 100k?

I guess defend progressive tax rates being necessary or what's the point of this back n forth?

The point of this back and forth is simply to illustrate just how little you understand the tax system. You have a rudimentary understanding of the concept of "progressive taxation" but no real grasp of how it is actually being applied.

You already agreed that some people use more infrastructure than others. Well, earning the 2nd $100k requires using more of the infrastructure to do it. As they use more of the infrastructure, they are actually increasing their percentage of use as well thus justifying higher rates.

So, imagine that a person uses 1 unit of a 10 unit road to make his first $100k, that's 10% of the road usage. If he uses another 1 unit of road to make a second $100k, he's increased the total road usage to 11 units and his personal usage to 2 units. Now he's using 18% of the road. If he added a 3rd unit, he'd be up to 25% of the road's total usage.

His second unit of road usage means he's responsible for a greater percentage of overall road usage and thus the 2nd $100k can't be taxed at the same rate as the 1st because he's no longer using the same 10% of the road.

Obviously, I'm just making up these numbers. But the point is that making the second $100k requires that there's an increase in the percentage use of the infrastructure. It doesn't remain flat.

 

[sickc0d3r]

Burden is not justification to take money from somebody else instead of paying your fair share

How can you talk about "fair share" without acknowledging the fact that taxes aren't the only costs we are forced to manage, by the system in which we are obliged to participate? If we lived back in the days of homesteading you might have a point. But there are no unclaimed plots of usable land anymore.

And why are you ignoring that income tax brackets are applied equally to everyone and accepting income in a higher bracket is completely voluntary? Unlike rent.

 

[panamaican]

Lol fuck off with this telling me why I'm posting things. If that's the way you feel just stop responding.

I fixed my example to get you to answer to it. Not squirm around it so you dont hsve to address it

When you present an example and then say it's a bad example because it supports my point and not yours, that's not me squirming around. That's you been smacked in the face with reality, realizing you're wrong and then scrambling to find something that you claim makes you right.

I never said the whole mil would be taxed at 40%. You're being extra tedious about this because you already have it in your head I don't understand the tiered system.

I have it my head that you don't understand because your posts suggest that you don't understand.

We arent all paying a flat tax you dolt. That is the whole topic of this discussion between us.

Some dollars are taxed way higher then others. Justify this

Like here for example. I pointed out that whether I make $501k or I make $500 million I pay the exact same tax rate. I pointed out earlier that I pay the same tax rate on my 1st $100k as everyone else, regardless of how much more money I make than them in total. My first $100k isn't taxed more just because I made more. And my $500 million is taxed that same as someone else's $501k.

Our system does exactly what you want it to do. Your complaint no longer seems related to anything wrong with our existing system but to a imagined version that we don't employ.