Spinning the income tax

[Raz]

Re: Spinning the income tax

I agree, Raz, that someone running a business that creates something or provides a service is at least "fairly taxed". I am such a person and trust me I am taxed. I will defend Cindy in that it is pretty clear to me that two things are true. One, not everybody making money is actually contributing wealth and sometimes is actually taking it and, two, the ability to avoid taxes increases with money made. People who make money without creating anything are a bigger systemic threat to capitalism more than any tax. Now, I can understand how one would point the finger at government on that very score but government is not stealth about its taking and "we the people" have some kind of check on it in principle.

I think we need to get use to the idea that a substantial number of people making money are not creating anything and correcting that should be where our energy is spent.

As usual, Sunsky, you make valid points with a reasonable argument.

But the problem is what I highlighted in red: once a majority of the electorate has "no skin in the game" the republic is finished and we are on a rapid road to a very bad system where less wealth is created and the most productive are simply skinned by the mob. Toqueville said as much over two-hundred years ago.

At some point Atlas will simply shrug, although I must say I consider Ayn Rand's world-view as abhorrent, having all the compassion of a beehive.

[flintlock]

Re: Spinning the income tax

As usual, Sunsky, you make valid points with a reasonable argument.

But the problem is what I highlighted in red: once a majority of the electorate has "no skin in the game" the republic is finished and we are on a rapid road to a very bad system where less wealth is created and the most productive are simply skinned by the mob. Toqueville said as much over two-hundred years ago.

At some point Atlas will simply shrug, although I must say I consider Ayn Rand's world-view as abhorrent, having all the compassion of a beehive.

I agree with you in principle Raz. But breaking up taxes into categories by calling them Federal, SS, medicare, etc doesn't mean they hurt any less to the person paying them. They basically borrow from SS anyway to pay general budget items, so I feel its a bit unfair to say people who pay no Federal income tax don't have at least some "skin in the game". Since we all pay the same SS tax up to a point. The average Joe doesn't even know which taxes he pays , only the total amount.( if he even knows that!)

But yes, those with no skin in the game definitely don't care about future FEDERAL tax increases, though they should. ( less dollars available to pay them)

Agree 100% Atlas will shrug at some point.

[cindykimlisa]

Re: Spinning the income tax

Do you have any data to support your allegations? It doesn't match up with my experience.

How many people is "Many"? I know three people whose annual income is between $270,000 and $310,000 - they own small to medium sized businesses with between 15 and 65 employees, they still work 50+ hours every week, and their federal tax rate is about 38% of their GROSS income.
They're not getting one thin dime from the taxpayers and they certainly aren't taking money from the stockholders, unless taking dividends or S-Corp distributions on their own stock makes them cheats or freeloaders!

"Many people don't pay any taxes cause they don't report their income." Don't take this too hard, Cindy, but just what does that have to do with the price of eggs in China? It makes no difference what the tax rate is to evaders and criminals: they don't obey the laws no matter what rate is set.
It's like criminals and gun control: they don't obey any laws unless it pleases them to do so, and all that's accomplished by forcing stringent requirements on the mass of Americans is to disarm the law-abiding who are themselves the victims of crime.

Mark's comment is technically and idealogically correct, and your entire post reeks of B.S.

Hi Raz

Put this in your pipe and smoke it! No BS only took a few minutes to find this below


And Raz, do take this too hard but what do eggs in China have to do with any of this?

A more serious answer is this: There is a tax system which some people study and take advantage of. Some people get screwed cause they are not paying attention and do not do good planning. Other people do well with good planning and some do not. Other people cheat. That is democracy not marxism. In marxism if you cheat you die. In marxism, if you make a lot they take it all away from you.

Cindy

Friday, July 08, 2005

More Wealthy Folks Pay No Taxes Under Bush

The IRS recently released figures to Congress that show the number of wealthy people who pay absolutely no taxes has grown significantly since George W. Bush seized the White House.[/font]
[]The portion of the study that showed full income (from all sources) shows that 5,650 rich individuals and couples paid no federal income tax in 2002.
The number of wealthy people living the tax-free life was 4,910 in 2001 and 2,766 in 2000.[/font]

Find Out How These Rich Folks Avoided Paying Any Income Taxes[/font]

]

[By KEVIN McCOY June 15, 2008 [/font]


Death is inevitable, but federal income taxes aren't for an increased number of high-income earners.

New IRS statistics show 7,389 federal tax returns with $200,000 or more in adjusted gross income reported no federal income taxes in 2005. T

Additionally, 4,224 of the over-$200,000 earners reported no worldwide income tax liability on their 2005 returns, the IRS data show. That represents a 75% increase from the 2,420 comparable returns filed in 2004



Outrageous: Exxon Mobil Paid No Income Tax in 2009
[FONT='Arial','sans-serif']Last week, Forbes magazine published what the top U.S. corporations paid in taxes last year. “Most egregious,” Forbes notes, is General Electric, which “generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.” Big Oil giant Exxon Mobil, which last year reported a record $45.2 billion profit, paid the most taxes of any corporation, but none of it went to the IRS:[/font]
[FONT='Arial','sans-serif'] [/font]
[FONT='Arial','sans-serif']Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. [/font]
[FONT='Arial','sans-serif'] [/font]
[FONT='Arial','sans-serif']No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas[/font]
[FONT='Arial','sans-serif'][/font]
[FONT='Arial','sans-serif']Mother Jones’ Adam Weinstein notes that, despite benefiting from corporate welfare in the U.S., Exxon complains about paying high taxes, claiming that it threatens energy innovation research. Pat Garofalo at the Wonk Room notes that big corporations’ tax shelter practices similar to Exxon’s shift a $100 billion annual tax burden onto U.S. taxpayers. In fact, in 2008, the Government Accountability Office found that “two out of every three United States corporations paid no federal income taxes from 1998 through 2005.”[/font]

[Slimprofits]

Re: Spinning the income tax

I agree with you in principle Raz. But breaking up taxes into categories by calling them Federal, SS, medicare, etc doesn't mean they hurt any less to the person paying them. They basically borrow from SS anyway to pay general budget items, so I feel its a bit unfair to say people who pay no Federal income tax don't have at least some "skin in the game". Since we all pay the same SS tax up to a point. The average Joe doesn't even know which taxes he pays , only the total amount.( if he even knows that!)

thanks for sticking up for the little guy

I would wager you are a pretty damn good boss to work for.

When you're making what amounts to jack squat due to inflation and the outrageous cost of living in many parts of the country, but still paying 25-30% of total salaries earned in FICA, state and federal income taxes, it's complete and total bullshit for anyone to say that we don't have skin in the game.

[bpr]

Re: Spinning the income tax

Or how to give libertarians an apoplectic fit :eek:

http://finance.yahoo.com/news/Nearly...67323.html?x=0



Of course, no mention made of the $3,825 dollars this family paid in FICA taxes.

Or the likely $2000 or so paid in sales taxes.

Or the $600 in gasoline taxes.

Or the $5000 to $10000 paid for health insurance.

Not sure why you would post this, except to start a shouting match.

It's not news, it the same BS that is published every quarter.

It's clearly a slanted article, and those who think the poor are sucking off the system have been at the sucking end of the pipe for a little too long.

R&R

[sunskyfan]

Re: Spinning the income tax

I agree that everybody should have skin in the game. We should scrap the income based taxes and we should go to a small (2-4%) transaction tax (not VAT) with no exclusions so that all do and all are taxed on the amount of the economy they use. A transaction tax would prevent bubbles and over speculation in the economy and remove forever the debate between rich and poor as far as taxes are concerned. It would also expose the enequalities of systems on trade and provide a bases for appropriate adjustments on foreign made products.

[flintlock]

Re: Spinning the income tax

I'm no tax accountant, but more than likely they paid no income taxes that year because they were writing off losses in other years. Perfectly legal. Why shouldn't they do everything legal to pay as little tax as possible? Blame the politicians who put in the loopholes, not the people who take advantage of them.

Beware of hokey statistics. 2 out of 3 corporations not paying taxes could include Aunt Jenny's flower pressing business, or the beer making company your friend started in his basement. Or the fact that most small businesses use all their profits to pay the salary of the owner, hence no taxable corporate profit. It gets paid on his personal return instead.

Generally speaking, all corporate taxes get passed along to the final consumer in the way of higher prices.

[Munger]

Re: Spinning the income tax

I'm no tax accountant, but more than likely they paid no income taxes that year because they were writing off losses in other years. Perfectly legal. Why shouldn't they do everything legal to pay as little tax as possible? Blame the politicians who put in the loopholes, not the people who take advantage of them.

Beware of hokey statistics. 2 out of 3 corporations not paying taxes could include Aunt Jenny's flower pressing business, or the beer making company your friend started in his basement. Or the fact that most small businesses use all their profits to pay the salary of the owner, hence no taxable corporate profit. It gets paid on his personal return instead.

Generally speaking, all corporate taxes get passed along to the final consumer in the way of higher prices.

Goldman Sachs' Tax Rate Drops to 1%

[Raz]

Re: Spinning the income tax

Hi Raz

Hi Cindy (Hope this type is big enough for you to hear me)

Put this in your pipe and smoke it! No BS only took a few minutes to find this below

I quit smoking 25 years ago, Cindy; never cared much for a pipe.
And being a "Googler" myself I can find far more Leftist Crap than you did in less than sixty seconds!:p
7,369 filthy rich people who pay little or no taxes; why that's clearly an epidemic!!

USA Today, The New York Slimes, Huffington Post, and of course, "Mother Jones".:rolleyes: What a lineup!
And might I say, Cindy, you did quite a job with the old "cut and paste" routine. It always helps one's argument to avoid anything in the article that might blow your case completely out of the water.

Take GE: the manufacturing sectors of the company were profitable and would show a 22% federal tax on their gross income had the financial sector of the company not shown HUGE LOSSES.
But we don't want to point out that the company as a whole made NO MONEY, now do we?:eek:

Also omitted from the Forbes article was this little gem: "
"But it's the tax benefit of overseas operations that is the biggest reason why multinationals end up with lower tax rates than the rest of us. It only makes sense that multinationals "put costs in high-tax countries and profits in low-tax countries," says Scott Hodge, president of the Tax Foundation. Those low-tax countries are almost anywhere but the U.S. "When you add in state taxes, the U.S. has the highest tax burden among industrialized countries," says Hodge. In contrast, China's rate is just 25%; Ireland's is 12.5%."

Most corporate loopholes were closed in tax legislation that passed Congress in 1986 and 1991.
All we need to do now is raise the corporate rate even higher and perhaps we can deport the remaining stateside operations of the biggest companies as well.

And we don't want to mention that most small businesses are organized as Sub-S Corporations or LLCs that are pass-through entities - they pay ZERO income taxes because the shareholders entail all the income tax liability. If we acknowledged this it might call into question the true picture of corporate taxes.

One other point: no individual employee of any company pays more than HALF of his or her Social Security tax - the employer pays half for each employee.

And Raz, do take this too hard but what do eggs in China have to do with any of this?

Absolutely nothing, Cindy - just like your citing of criminal evaders/non-filers has absolutely NOTHING to do with the rate of Federal Income Tax.

A more serious answer is this: There is a tax system which some people study and take advantage of. Some people get screwed cause they are not paying attention and do not do good planning. Other people do well with good planning and some do not. Other people cheat. That is democracy not marxism. In marxism if you cheat you die. In marxism, if you make a lot they take it all away from you.

Those who don't pay attention to their financial affairs and make no effort to plan for contingencies are not being screwed, Cindy - they are simply reaping the predictable results of their own apathy and sloth.

You're confusing Marxism with Leninism, Cindy. Marx envisioned a dictatorship of the proletariat that seized the means of production, not the personal effects, residences and everything else belonging to each individual. This transitional state would eventually give over to a classless society and eventually even government would cease as pure communism emerged. Nowhere did Marx envision a GULAG, nor did he describe the small business owners (bourgeoisie) and small landowners (kulaks) in Leninist terms such as "bloodsuckers", "insects", "leeches", etc., and incite such dehumanizing hatred in order to exterminate millions of human beings.

Cindy

Friday, July 08, 2005

More Wealthy Folks Pay No Taxes Under Bush

The IRS recently released figures to Congress that show the number of wealthy people who pay absolutely no taxes has grown significantly since George W. Bush seized the White House.[/font]
[]The portion of the study that showed full income (from all sources) shows that 5,650 rich individuals and couples paid no federal income tax in 2002.
The number of wealthy people living the tax-free life was 4,910 in 2001 and 2,766 in 2000.[/font]

Find Out How These Rich Folks Avoided Paying Any Income Taxes[/font]

]

[By KEVIN McCOY June 15, 2008 [/font]


Death is inevitable, but federal income taxes aren't for an increased number of high-income earners.

New IRS statistics show 7,389 federal tax returns with $200,000 or more in adjusted gross income reported no federal income taxes in 2005. T

Additionally, 4,224 of the over-$200,000 earners reported no worldwide income tax liability on their 2005 returns, the IRS data show. That represents a 75% increase from the 2,420 comparable returns filed in 2004



Outrageous: Exxon Mobil Paid No Income Tax in 2009
[FONT='Arial','sans-serif']Last week, Forbes magazine published what the top U.S. corporations paid in taxes last year. “Most egregious,” Forbes notes, is General Electric, which “generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.” Big Oil giant Exxon Mobil, which last year reported a record $45.2 billion profit, paid the most taxes of any corporation, but none of it went to the IRS:[/font]
[FONT='Arial','sans-serif'] [/font]
[FONT='Arial','sans-serif']Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. [/font]
[FONT='Arial','sans-serif'] [/font]
[FONT='Arial','sans-serif']No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas[/font]
[FONT='Arial','sans-serif'][/font]
[FONT='Arial','sans-serif']Mother Jones’ Adam Weinstein notes that, despite benefiting from corporate welfare in the U.S., Exxon complains about paying high taxes, claiming that it threatens energy innovation research. Pat Garofalo at the Wonk Room notes that big corporations’ tax shelter practices similar to Exxon’s shift a $100 billion annual tax burden onto U.S. taxpayers. In fact, in 2008, the Government Accountability Office found that “two out of every three United States corporations paid no federal income taxes from 1998 through 2005.”[/font][/quote]

[Raz]

Re: Spinning the income tax

thanks for sticking up for the little guy

I would wager you are a pretty damn good boss to work for.

When you're making what amounts to jack squat due to inflation and the outrageous cost of living in many parts of the country, but still paying 25-30% of total salaries earned in FICA, state and federal income taxes, it's complete and total bullshit for anyone to say that we don't have skin in the game.

The most pungent bull$#!t of all is turning someone into a straw man so you can stick a match to him.

Employees pay only 1/2 of their Social Security tax - their employer pays the other half. Half of all filers don't pay federal or state income taxes with the expectation that they will receive a check or credit in return - but that's exactly what 47% of ALL filers do.
EITC was passed in 1975 to encourage the working poor to avoid welfare by giving them a credit that would essentially wipe out their payroll taxes. It was HUGELY expanded by the Democratic Congess during Clinton's first two years in office, and even the Republicans got in on the act in 2001. A claimant with two qualifying children can receive over $5,000 under this program.

Taxes on gasoline are used specifically to build and maintain highways. Even with employers paying half and EITC refunding that and more to filers who show $40,000 in income, our "public serpents" in the Congress spent all the tax receipts and still robbed Social Security because they not only aren't forced to make difficult choices, they use these robberies to buy votes!

You might well pay sales, property, fuel, and other taxes - everyone does - but unless you pay INCOME TAXES you can vote to have mine raised while exempting yourself. Under that reality you have no skin, bone, tooth or anything else in the game.

[c1ue]

Re: Spinning the income tax

I'd just like to point out that the 47% of households that don't pay any federal income tax: what is their share of wealth in the US? Of income in the US?

It is disingenuous to say that these households are all freeloaders if indeed these households own a smaller percentage of assets and earn a smaller percentage of income than they pay as a percentage of overall taxes - which they do.

If even Warren Buffet notes this disparity, I'm not sure what the rancor is about.

[Raz]

Re: Spinning the income tax

I'd just like to point out that the 47% of households that don't pay any federal income tax: what is their share of wealth in the US? Of income in the US?

It is disingenuous to say that these households are all freeloaders if indeed these households own a smaller percentage of assets and earn a smaller percentage of income than they pay as a percentage of overall taxes - which they do.

If even Warren Buffet notes this disparity, I'm not sure what the rancor is about.

I respect your opinions, c1ue; always have and still do.

I'm not without compassion or a sense of fairness: I believe that any tax on income should be progressive. Nor do I believe that a family trying to live on $30,000/year should pay more than 1.0% of their gross income in combined income taxes. At the same time I do NOT believe that anyone should have the right to vote for congressional candidates promising to raise taxes on "the rich" (whatever that means) while promising credits, refunds, etc. to make certain that their supporters pay NO income tax.
That is mob rule - the tyranny of 51%.

For all practical purposes we are there today, and should it [predictably] get worse, the American republic is finished.
Not only will less wealth be created but social and political tensions will eventually explode.

Now to address the other side: unless we can offer people a real-world job - and a piece of the action, like an ESOP - we are absolutely headed for a massive and violent political breakdown. W's "ownership society" was a total crock that involved debt slavery to buy a house that many could not afford; a true ownership society involves granting equity in a necessary and viable business to one's employees. We must concentrate on the two things that are in critically short supply in these United States: (1) energy production - petroleum - since it's both an economic and a security issue, and (2) manufacturing, so people can earn a comfortable living.

Unless we restore a prudent and equitable workingplace for everyone who is willing to learn and work this country has no future. And it won't happen as long as class warfare is preached from the Left of the spectrum and the "right" to pillage the nation by banksters and other oligarchs is preached from the Right of the spectrum.

I don't see any real solutions being offered by the RepubliCrat frauds currently in power.

[flintlock]

Re: Spinning the income tax

The most pungent bull$#!t of all is turning someone into a straw man so you can stick a match to him.

Employees pay only 1/2 of their Social Security tax - their employer pays the other half. Half of all filers don't pay federal or state income taxes with the expectation that they will receive a check or credit in return - but that's exactly what 47% of ALL filers do.
EITC was passed in 1975 to encourage the working poor to avoid welfare by giving them a credit that would essentially wipe out their payroll taxes. It was HUGELY expanded by the Democratic Congess during Clinton's first two years in office, and even the Republicans got in on the act in 2001. A claimant with two qualifying children can receive over $5,000 under this program.

Taxes on gasoline are used specifically to build and maintain highways. Even with employers paying half and EITC refunding that and more to filers who show $40,000 in income, our "public serpents" in the Congress spent all the tax receipts and still robbed Social Security because they not only aren't forced to make difficult choices, they use these robberies to buy votes!

You might well pay sales, property, fuel, and other taxes - everyone does - but unless you pay INCOME TAXES you can vote to have mine raised while exempting yourself. Under that reality you have no skin, bone, tooth or anything else in the game.

Good point about the EITC. I forgot about that. Like I said, I'm no tax accountant.. Being self-employed, I pay both sides of the SS tax. All I know is I write some big checks for taxes, even in years I don't make squat. In those bad years most of it goes for SS. It doesn't make me feel any better knowing I paid less in Federal tax than SS. Either way it is going to THEM out of MY pocket. And that money is already spent long before they even receive it. So lets just say I'm not counting on all that SS money they have set aside for me.:rolleyes:

I've said it before. More taxes is not the answer. Fix the spending or else. Of course those who pay little or no taxes think you can "soak the rich" with no consequences. But then some people have to learn the hard way.

[c1ue]

Re: Spinning the income tax

I'm not without compassion or a sense of fairness: I believe that any tax on income should be progressive. Nor do I believe that a family trying to live on $30,000/year should pay more than 1.0% of their gross income in combined income taxes. At the same time I do NOT believe that anyone should have the right to vote for congressional candidates promising to raise taxes on "the rich" (whatever that means) while promising credits, refunds, etc. to make certain that their supporters pay NO income tax.
That is mob rule - the tyranny of 51%.

That is a fair point, but it is one sided to say that the RepubliCrats or whomever are specifically targetting higher income taxes for the 'rich' because they can raise votes from the more numerous 'poor'.

If we look at the various bills, the existing tax structure, and so forth, it is clear (to me) that the target isn't the rich.

It is the middle class.

The rich have lobbyists and 'friends in Congress'. The poor have masses of votes. The middle class have neither.

Is $350,000 a year middle class?

It would depend on where you are.

In the Bay Area, it would be upper middle class.

In Mississippi, it would be rich.

Every supposed 'tax the rich' bill includes dozens of provisions for the truly rich, and in many cases the truly rich have already moved their assets such that the bulk are untaxable (see Kennedy offshore trust).

[cindykimlisa]

Re: Spinning the income tax
















One other point: no individual employee of any company pays more than HALF of his or her Social Security tax - the employer pays half for each employee.


The above is not correct: I am an employee and pay self emplyment tax as a self employed person. Clergy according to IRS have dual status.





You're confusing Marxism with Leninism, Cindy. Marx envisioned a dictatorship of the proletariat that seized the means of production, not the personal effects, residences and everything else belonging to each individual. This transitional state would eventually give over to a classless society and eventually even government would cease as pure communism emerged. Nowhere did Marx envision a GULAG, nor did he describe the small business owners (bourgeoisie) and small landowners (kulaks) in Leninist terms such as "bloodsuckers", "insects", "leeches", etc., and incite such dehumanizing hatred in order to exterminate millions of human beings.

I am not confused at all - just do not agree with your simplistic case for Marxism.

Cindy