Master of Ossus rants about American IncomeTax

[Master of Ossus]

Possible, yes - the question I suppose is just how typical it is.

Well, apparently, over 39% of people in the labor force do just that, and I'm guessing that's roughly correlated with the lowest-earning 39% of the labor force.

[Master of Ossus]

He's talking about the recorded labor force, so if you filed a tax return, that probably included you.

If memory serves, my parents filed tax returns on me since I was born. They put money into bank accounts and stocks when I was young.

It would be very unusual (and sort of a bad tax move) for them to actually file a separate return for you, unless they put a LOT of money into bank accounts and stocks for you when you were young. It's more likely that they declared you as a dependent and then declared your income on the part of their return pertaining to that.

[bobalot]

Back to the article.

I think spending a whole lot of money on something tangible is a pretty good idea as opposed to spending spending $700 billion bailing out some rich arseholes who fucked the economy and suddenly had a overnight Keynesian conversion. Bridges and infrastructure can help the country increase its efficiency and expand its ability to generate income.

Americans have it pretty good when it comes to taxes. Relatively, compared to other first world countries, you guys pay much less. Especially big companies and rich people.

[Ender]

There's a real obvious solution here people - since MoO swears there are these loopholes we could be exploiting, we have him prepare our taxes next year. If he's wrong, it will be really obvious, if he is right you get more money.

[Master of Ossus]

There's a real obvious solution here people - since MoO swears there are these loopholes we could be exploiting, we have him prepare our taxes next year. If he's wrong, it will be really obvious, if he is right you get more money.

I'd be happy to do that, if you'd pay me my normal wages for the time it takes me to fill out your return (and if it were, you know, legal). It would probably be cheaper just to hire a real tax planner, though.

[Darth Wong]

MoO has been quite clever here: he has supported his assertion that the rich are overtaxed even now, after three decades of targeted tax cuts, by shifting the focus from the question of how burdensome those taxes are on them and focusing entirely on whether poor people pay enough tax: a question he attempts to resolve without considering their ability to pay at all. Even though poor people are already in such dire straits that their life expectancy and infant mortality rate lag far behind those of the wealthy, and (as we have finally admitted) their standard of living was artificially inflated by debt.

[Darth Wong]

Why should the distinction between payroll taxes and income taxes be in any way meaningful to a discussion about who is shouldering the burden of paying for government programs?

Because payroll taxes don't go to fund general government programs, but for specific programs (almost all of which are targeted specifically at people with low incomes). The fact of the matter is, people making $20k per year pay will probably not pay anything at all towards Obama's proposed infrastructure developments.

It's also a big tax planning issue that so few people pay taxes. If you hypothetically planned a flat tax break that would take $100 off of every single person's income tax, its impact would be disproportionate towards the rich because, by and large, the lower class pays nothing to begin with. That, actually, became a minor campaign issue, recently.

Frankly, it's absurd to pretend this spending is so segregated, when all of the government's programs are partially funded by borrowing money from our children. That's how your government got itself $10 trillion in debt.

[Master of Ossus]

MoO has been quite clever here: he has supported his assertion that the rich are overtaxed even now, after three decades of targeted tax cuts, by shifting the focus from the question of how burdensome those taxes are on them and focusing entirely on whether poor people pay enough tax: a question he attempts to resolve without considering their ability to pay at all. Even though poor people are already in such dire straits that their life expectancy and infant mortality rate lag far behind those of the wealthy, and (as we have finally admitted) their standard of living was artificially inflated by debt.

And I'm sure that paying $5 on a $30k income would be FAR too burdensome for them to bear.

And, moreover, those "targeted tax cuts" on the wealthy have essentially been repealed even as we're issuing NEW tax cuts for the poor and middle classes.

Finally, the Obama conception of income taxes seeming to be "the wealthy can afford to pay more, the poor can't afford to pay as much," relies heavily on the wealthy being able to adequately fund government spending. Even with his higher tax rates, though, tax revenues are projected to fall significantly short of even modern spending. The original thread that this was attached to pertained to a proposed, and quite significant, increase in spending that he is planning, suggesting that this shortfall will only get higher.

[Crayz9000]

It's simply mind-blowing that the brain-bug that is the "fact" that the lower and middle classes can't afford to pay income taxes (but the rich can painlessly afford to see their after-tax incomes reduced by 10+% instantaneously) has shielded people making $30,000/year from paying even $5 in Federal income tax and the country expecting a balanced budget.

I'm sorry. You are an idiot. Next time, back up your fucking assumptions.

I make roughly $35,000 in gross income per year.

According to my W-2 from last year, I paid ~7,000 in income taxes that were withheld from my paycheck. Of those, I received only $1,500 back in refunds. That makes my total taxes approximately $5,500. The State haul from that was only about 10%, meaning that my federal taxes were about 5,000.

Therefore, my federal income tax percentage is a lovely 14.5%.

Don't even dare to say that we aren't paying our fair share, you smug asshole. It's hard enough for us to live on what we get paid. Any additional tax hikes would, frankly, be crippling.

[Darth Wong]

Question: what percentage of the wealth do the rich people own? Is it greater or lesser than their percentage of the overall tax burden?

[Edi]

You can split hairs about the tax theory as much as you want, MoO, but at the end of the day the fact remains that the people in the income brackets you are talking about do pay taxes of some sort that amount to a lot more than a measly $5. The only thing that you have managed to accomplish here is reaffirm what a lot of us already knew, that whenever it comes to economic issues, you're a narcissistic, navelgazing, nitpicking little shit who has absolutely no connection to the reality of average people, never mind those who have low income or who are living in actual poverty.

[Master of Ossus]

Question: what percentage of the wealth do the rich people own? Is it greater or lesser than their percentage of the overall tax burden?

Define "wealthy," but they're about the same right now (if you assume that the top 5% in income are also the top 5% in wealth).

The top ~6% of Americans pay a little over half the country's income tax, and the top ~5.5% of Americans own about half the country's net wealth. The upper-middle class does significantly worse in terms of taxes, but then the lowest income brackets would do about the same in both (e.g., the bottom quintile essentially pays no taxes and has about 3-4% of the nation's wealth).

The Obama tax proposals seem to significantly increase the tax burden to the wealthy, while slightly decreasing the tax burden to the poor and middle classes.

[Darth Wong]

I'm no expert on American tax law, but I'd guess that the reason people here are paying taxes in that bracket is that they don't have kids, so they don't have the one colossal expense which they can use to push their tax rates down.

Of course, if one goes down that road, then one must consider the fact that it's incredibly difficult to raise kids in a low-income environment: so difficult that a much larger proportion of those kids don't even survive to adulthood. So acting as if they're being mollycoddled and not being made to pay enough tax is ... well, I'm having a hard time coming up with any description that doesn't involve the word "heartless".

[Master of Ossus]

You can split hairs about the tax theory as much as you want, MoO, but at the end of the day the fact remains that the people in the income brackets you are talking about do pay taxes of some sort that amount to a lot more than a measly $5.

Those people are getting jobbed by their ilk, then, who really aren't paying any taxes. If they want to complain that their taxes are too high, they should complain about their neighbors who aren't paying anything.

The only thing that you have managed to accomplish here is reaffirm what a lot of us already knew, that whenever it comes to economic issues, you're a narcissistic, navelgazing, nitpicking little shit who has absolutely no connection to the reality of average people, never mind those who have low income or who are living in actual poverty.

I grew up in poverty, shit head. It's not nearly as bad as people I talk to think that it is.

[Darth Wong]

Question: what percentage of the wealth do the rich people own? Is it greater or lesser than their percentage of the overall tax burden?

Define "wealthy," but they're about the same right now (if you assume that the top 5% in income are also the top 5% in wealth).

The top ~6% of Americans pay a little over half the country's income tax, and the top ~5.5% of Americans own about half the country's net wealth. The upper-middle class does significantly worse in terms of taxes, but then the lowest income brackets would do about the same in both (e.g., the bottom quintile essentially pays no taxes and has about 3-4% of the nation's wealth).

The Obama tax proposals seem to significantly increase the tax burden to the wealthy, while slightly decreasing the tax burden to the poor and middle classes.

What's wrong with that, then? According to your figures, the wealthy are not significantly overpaying relative to everyone else, and it is indisputable that they can pay more with less personal pain.

Having said that, I think a better solution is more comprehensive social programs. You can cut poor peoples' taxes down to nothing but it still doesn't allow them to build decent lives for themselves if the income isn't there and the social programs aren't there to provide opportunity and security.

[Illuminatus Primus]

In meager defense of Ossus, I would go back to a true pre-Reagan income tax system, because yes, making 200,000 means you're relatively well-off, but what if you have 4 kids and live in many parts of California or New York? In 1954 the highest marginal income tax bracket was 90% for over 200,000 1954 USD; that's equivalent to over 1.5 million 2007 USD. We should have 500,000, 1,000,000, and 1,500,000 tax bracket, and those people should be getting squeezed.

[Master of Ossus]

I'm no expert on American tax law, but I'd guess that the reason people here are paying taxes in that bracket is that they don't have kids, so they don't have the one colossal expense which they can use to push their tax rates down.

Of course, if one goes down that road, then one must consider the fact that it's incredibly difficult to raise kids in a low-income environment: so difficult that a much larger proportion of those kids don't even survive to adulthood. So acting as if they're being mollycoddled and not being made to pay enough tax is ... well, I'm having a hard time coming up with any description that doesn't involve the word "heartless".

There are lots of activities that are favored under the tax code, but frankly I have a difficult time conceiving of why someone (kids or not) who's making $20k can't possibly afford to pay .025% of their annual income to run government services seems absurd. Yeah, they're getting deductions that were put into the Code because Congress presumably wanted to recognize certain expenses, but in aggregate it's ridiculous to totally exclude these people from the tax base.

[Broomstick]

I'm no expert on American tax law, but I'd guess that the reason people here are paying taxes in that bracket is that they don't have kids, so they don't have the one colossal expense which they can use to push their tax rates down.

Of course, if one goes down that road, then one must consider the fact that it's incredibly difficult to raise kids in a low-income environment: so difficult that a much larger proportion of those kids don't even survive to adulthood. So acting as if they're being mollycoddled and not being made to pay enough tax is ... well, I'm having a hard time coming up with any description that doesn't involve the word "heartless".

The word "selfish" does come to mind as well.

[Master of Ossus]

What's wrong with that, then? According to your figures, the wealthy are not significantly overpaying relative to everyone else, and it is indisputable that they can pay more with less personal pain.

I don't have a problem with the current system, I have a problem with policies that vastly distort this current standard.

Having said that, I think a better solution is more comprehensive social programs. You can cut poor peoples' taxes down to nothing but it still doesn't allow them to build decent lives for themselves if the income isn't there and the social programs aren't there to provide opportunity and security.

It's kind of interesting that in some other countries, they've basically given up on having a progressive tax structure (so they're essentially flat or even regressive tax structures), but make up for that by concentrating the benefits of government services among the poor.

[Broomstick]

I'm no expert on American tax law, but I'd guess that the reason people here are paying taxes in that bracket is that they don't have kids, so they don't have the one colossal expense which they can use to push their tax rates down.

Of course, if one goes down that road, then one must consider the fact that it's incredibly difficult to raise kids in a low-income environment: so difficult that a much larger proportion of those kids don't even survive to adulthood. So acting as if they're being mollycoddled and not being made to pay enough tax is ... well, I'm having a hard time coming up with any description that doesn't involve the word "heartless".

There are lots of activities that are favored under the tax code, but frankly I have a difficult time conceiving of why someone (kids or not) who's making $20k can't possibly afford to pay .025% of their annual income to run government services seems absurd. Yeah, they're getting deductions that were put into the Code because Congress presumably wanted to recognize certain expenses, but in aggregate it's ridiculous to totally exclude these people from the tax base.

They aren't excluded from the tax base. Even the poorest American pays tax every time they buy something, every time they put gas in the car, and so on. Even if I don't make enough this year to pay Federal income I still have to pay social security tax. There are state taxes I have to worry about, too. So no, poor people are NOT excluded from the tax base. Nor do all government services comes from the Federal government - for example, the subsidy that helps me pay for my health insurance is funded by my STATE, not the Feds, so state taxes contribute to that, not the Federal income tax.

You haven't got a leg to stand on, MoO.

[Master of Ossus]

I'm sorry. You are an idiot. Next time, back up your fucking assumptions.

I make roughly $35,000 in gross income per year.

According to my W-2 from last year, I paid ~7,000 in income taxes that were withheld from my paycheck. Of those, I received only $1,500 back in refunds. That makes my total taxes approximately $5,500. The State haul from that was only about 10%, meaning that my federal taxes were about 5,000.

Therefore, my federal income tax percentage is a lovely 14.5%.

Don't even dare to say that we aren't paying our fair share, you smug asshole. It's hard enough for us to live on what we get paid. Any additional tax hikes would, frankly, be crippling.

But you, nonetheless, expect other Americans to suffer a 10% reduction in their post-tax income as if it's nothing? And, moreover, if you think your taxes are so high, then why not blame the 39+% of Americans who pay nothing at all? Those are the ones that I don't think are paying their share. Three guesses what part of the income structure they fall under.

[aerius]

In meager defense of Ossus, I would go back to a true pre-Reagan income tax system, because yes, making 200,000 means you're relatively well-off, but what if you have 4 kids and live in many parts of California or New York?

Don't have 4 kids. Having large families is not a right. If you can't afford it don't do it.

[erik_t]

I don't think you see "their share" the same way as the rest of us, Ossus. Are they paying the same percent of their income? No. Can the fairness and justice of the entire tax structure be boiled down to a constant percent of income? Most of us would again answer no.

You seem to believe that the answer to that question is yes. I'm glad you're in the minority.

[Master of Ossus]

They aren't excluded from the tax base. Even the poorest American pays tax every time they buy something, every time they put gas in the car, and so on. Even if I don't make enough this year to pay Federal income I still have to pay social security tax. There are state taxes I have to worry about, too. So no, poor people are NOT excluded from the tax base. Nor do all government services comes from the Federal government - for example, the subsidy that helps me pay for my health insurance is funded by my STATE, not the Feds, so state taxes contribute to that, not the Federal income tax.

You haven't got a leg to stand on, MoO.

So... why does this mean that it's okay for you to not have to pay Federal income tax? If anything, this just damages your cause even further--you're obviously paying other taxes, so what makes paying income tax so objectionable that we can't POSSIBLY increase (or even keep the same) the federal income tax for those who are making more than you are with the same deductions?

[Master of Ossus]

Don't have 4 kids. Having large families is not a right. If you can't afford it don't do it.

Well, that certainly cuts both ways.