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sonnylax
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 Posted: 10/27/04 - 14:58 Post subject:
| jrjo wrote: |
The bottom 50% of wage earners in the US foot about 4% of the tax roles. Granted they earn about 14% of the total wages, but if you suddenly told half the country they were going to have to pay 3x or 4x as much in federal taxes because everyone would pay the same 'flat' rate, well... I don't think a Congressperson would dare step foot in their home district ever again. |
Yeah, but they would get 100% of their paycheck. Big difference.
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cherylpf
crazy cat lady
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Posted: 10/27/04 - 14:59 Post subject:
| jrjo wrote: |
The bottom 50% of wage earners in the US foot about 4% of the tax roles. Granted they earn about 14% of the total wages, but if you suddenly told half the country they were going to have to pay 3x or 4x as much in federal taxes because everyone would pay the same 'flat' rate, well... I don't think a Congressperson would dare step foot in their home district ever again. |
Can you help explain this to me? You know, slowly, single syllable words....  I'm not sure I follow
I know that the top 5% (or so) wealthiest earn like 90%ish of the income...what would they pay in taxes? And by '4% of the tax roles' are you saying only income taxes or sales tax, property tax, etc included? AND, does the whole 'flat tax' theory (as opposed to Sonny's 'fair tax' which I don't know if I understand either) eliminate those? or is it just a flat tax on income?
I definitely agree that if I was to pay 3-4X in taxes I would be cranky but I just want to understand why this would be the case.
probably should have paid more attention in financial accounting 2.
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elkid
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Posted: 10/27/04 - 14:59 Post subject:
| jrjo wrote: | | Maybe poor urban planning in metropolitan areas, but as a whole, I wouldn't say overpopulated. |
I wouldn't say poor urban planning. I'd say people go where the jobs are. More plentiful employment opportunities in US cities than in the sticks.
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Pug
The Movie Geek
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Posted: 10/27/04 - 15:00 Post subject:
| sonnylax wrote: |
Yeah, but they would get 100% of their paycheck. Big difference. |
That's fair tax, not flat tax.
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elkid
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Posted: 10/27/04 - 15:06 Post subject:
| jrjo wrote: | | The bottom 50% of wage earners in the US foot about 4% of the tax roles. Granted they earn about 14% of the total wages |
No; they pay 4% and they make 4% of total wages despite representing 50% of the tax return base. FACT:
Number of Federal Individual Income Tax Returns Filed, 2001
Total: 128,817,051
Top 50%: 64,408,526
Bottom 50%: 64,408,525
Total Adjusted Gross Income Earned by the Taxpayers in Each Income Bracket, 2001
Total: 887,682,000
Top 50%: 852,642,000
Bottom 50%: 35,040,000
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runaroundsue
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Posted: 10/27/04 - 15:13 Post subject:
| elkid wrote: |
I wouldn't say poor urban planning. I'd say people go where the jobs are. More plentiful employment opportunities in US cities than in the sticks. |
true...and I said "world" specifically because I don't think the US in general is overpopulated. Is the exemption to promote population amongst ourselves? I claim ignorance on the subject, I just don't know why the exemption still exists today. Do we "need" children to tax in the future? The wheels are turning....but I can't crank anything out. To me it goes against the "children are a privilege, not a right" concept.
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jrjo
Gone Fishin
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Joined: 15 May 2002
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Location: Lake Wobegon, MN
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Posted: 10/27/04 - 15:22 Post subject:
http://www.irs.ustreas.gov/pub/irs-soi/01in01ts.xls
| cherylpf wrote: | | I know that the top 5% (or so) wealthiest earn like 90%ish of the income...what would they pay in taxes? |
The top 5% earn around 32% of the income. And they pay around 53% of the taxes. With the bottom 50% of earners getting 14% of the income, then the top 50% is around 86%.
| Quote: | | And by '4% of the tax roles' are you saying only income taxes or sales tax, property tax, etc included? |
That would just be federal taxes. I'd have to really dig, but I don't know if anyone has data for all 50-states combined to included sales tax, property tax and such. There's just no way probably because how much sales tax your demographic spends isn't trackable depending on what you buy.
| Quote: | | AND, does the whole 'flat tax' theory (as opposed to Sonny's 'fair tax' which I don't know if I understand either) eliminate those? or is it just a flat tax on income? |
A true 'flat' tax would be just that, flat for everyone. So if we went to say 20% for everybody for federal taxes, then it would shake out that the bottom half of the income pie..around 90% of the US, would suddenly have to foot half the federal tax bill. And if they are now only paying about 35% of the tax bill, that is going to be a nearly 50% rise in their taxes. People will revolt. 
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jrjo
Gone Fishin
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Posted: 10/27/04 - 15:29 Post subject:
| elkid wrote: |
Total Adjusted Gross Income Earned by the Taxpayers in Each Income Bracket, 2001
Total: 887,682,000
Top 50%: 852,642,000
Bottom 50%: 35,040,000 |
http://www.irs.ustreas.gov/pub/irs-soi/01in01ts.xls
...the totals of AGI I was looking at were
Total: 6,241,036,000,000
Top 50%: 5,379,286,000,000
Bottom 50%: 861,750,000,000 ...14%
Last edited by jrjo on 10/27/04 - 15:48; edited 1 time in total
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cherylpf
crazy cat lady
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Posted: 10/27/04 - 15:34 Post subject:
| Quote: | | The top 5% earn around 32% of the income. And they pay around 53% of the taxes. With the bottom 50% of earners getting 14% of the income, then the top 50% is around 86%. |
Thank you--I have no idea where my 'stat' came from...something I obviously remembered incorrectly. (although I had trouble with that spreadsheet)
| Quote: | | A true 'flat' tax would be just that, flat for everyone. So if we went to say 20% for everybody for federal taxes, then it would shake out that the bottom half of the income pie..around 90% of the US, would suddenly have to foot half the federal tax bill. And if they are now only paying about 35% of the tax bill, that is going to be a nearly 50% rise in their taxes. People will revolt. |
This is where I'm confused again. So, 90% of the US would foot half the tax bill. Is this because the total tax revenues would go down? Or am I completely missing that currently they pay a lot less than the flat 20% rate?
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phillycat
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Posted: 10/27/04 - 15:39 Post subject:
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jrjo
Gone Fishin
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Posted: 10/27/04 - 15:42 Post subject:
Okay Cheryl, let me try this. Say the whole country together makes 1,000 dollars. And to be a flat tax, the IRS would need to collect 200 of that, assuming 20% is where Congress sticks the tax at.
That being the case 90% of us would together be making $500. The Bill Gates of the world and his other top 10% cohorts would make the other $500. So come tax time, you and I the rest of the 90% of the country would have to pony up the 20% of our income to send in that half of the taxes for our $100 out of the $200. Bill Gates and friends would pay the other $100 for their 20% rate on the money they make.
Now what I'm saying is right now, you, I and the rest of us that make up that non-Bill Gates 90% are only paying, in my scenario, $70. And with a flat tax, who is going to explain that now I have to help pay more 'cuz we have to pay $100 instead of $70. And Bill and buddies now get a huge cut from $130 to $100.
Yeah.. it'd be a revolt.
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elkid
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Posted: 10/27/04 - 15:55 Post subject:
| jrjo wrote: | Okay Cheryl, let me try this. Say the whole country together makes 1,000 dollars. And to be a flat tax, the IRS would need to collect 200 of that, assuming 20% is where Congress sticks the tax at.
That being the case 90% of us would together be making $500. The Bill Gates of the world and his other top 10% cohorts would make the other $500. So come tax time, you and I the rest of the 90% of the country would have to pony up the 20% of our income to send in that half of the taxes for our $100 out of the $200. Bill Gates and friends would pay the other $100 for their 20% rate on the money they make.
Now what I'm saying is right now, you, I and the rest of us that make up that non-Bill Gates 90% are only paying, in my scenario, $70. And with a flat tax, who is going to explain that now I have to help pay more 'cuz we have to pay $100 instead of $70. And Bill and buddies now get a huge cut from $130 to $100.
Yeah.. it'd be a revolt. |
What? This makes no sense. The upper half would not get a cut. They'd actually be forced to pay a substantial share without ridiculous exemptions.
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runaroundsue
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Posted: 10/27/04 - 16:10 Post subject:
| elkid wrote: |
What? This makes no sense. The upper half would not get a cut. They'd actually be forced to pay a substantial share without ridiculous exemptions. |
some. I think that's where alot of speculation comes in. And maybe we should just get rid of all that speculation. Try flat tax and no exemptions.....if it doesn't work make graduation changes taxing the rich more and still prevent the exemptions. What would it hurt to try......we are already in debt. I don't mind paying a higher % in taxes in comparison to the guy next door that struggles due to circumstance that are or aren't in his control, I don't like paying more than the Kerrys and the Bushes.
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jrjo
Gone Fishin
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Posted: 10/27/04 - 16:13 Post subject:
| elkid wrote: | | What? This makes no sense. The upper half would not get a cut. They'd actually be forced to pay a substantial share without ridiculous exemptions. |
Run the numbers.
Right now it's an incremental tax system. ANY kind of income tax that is flat is going to be a huge tax break for the top 10%.
And as for ridiculous exemptions, they're not found on the personal tax side of income tax code. It really is basically pretty cut n' dried for 1040s. Where the loops come in is on the corporate side. Now if you want to talk corporate income taxes, the rates there and who pays what, that's a whole different story. But all the flat tax schemes I've seen apply to personal income taxes. It'd be a boon for the wealthy.
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sonnylax
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Posted: 10/27/04 - 16:30 Post subject:
Corporate taxes are a joke. Companies don't pay taxes. You and I do as real people. When IBM has to pay "corporate taxes," that is less $$$ they have to pay employee salaries, employee benefits, return as profit for the shareholders of the company, invest in new machinery or R&D, etc.
Corporate taxes are basically a fraud to an un-educated workforce. They are transparent to the actual companies.
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