Take the Forbes 400 - the 400 richest people. Combined net worth is around $1.7 trillion. Now distribute that to the bottom 6 billion people on the planet. Everyone gets $283. About $22 per month - less than a dollar day. That doesn't make the poor appreciably any better off, but those 400 are now as poor as the other 6 billion who just received their $283.
How much do you think the day laborer paid in cash declares? Do you think barbers and waitresses declare all their tips? You think only the rich declare their income? The facts are the facts - 24% is the average income tax rate for the top 1%. I know it runs counter to your world-view, but that's the truth.
No need to eliminate it - just freeze COLA adjustments from here on out. Or cut payments 5% "to ensure the stability of the program" - and then freeze. In 20 years, it's basically gone - and the Government keeps rolling in the taxes...
Also, if a top earner is actually paying 24 percent income tax, they don't live in one of the states with no income tax.
Real top earners have a median income tax of around 8 percent.
Only suckers who can't afford tax lawyers and tax accountants pay 24 percent.
Fwiw, my brother and uncle both work in tax and insurance law in NYC.
Wrong. See the actual tax return data for yourself. I've linked it above and now here - it is quite eye-opening. The FEDERAL (not State - FEDERAL) tax return data shows the average income tax rate of the top 1% is 24%. AVERAGE, FEDERAL. Nothing to do with State. If you're unlucky enough to live in California (like I do), then you get the privilege of paying up to another 10.5% on top of that.
OK, so we don't cap SSI contributions. Do we cap SSI payments? Or do we end the entire charade that it is a "retirement plan" and just call it out as what it is - a money transfer plan, a general tax levied and payments made with no legal obligation for those being paid?
1. Please read the rest of my comment. I factor in Social Security - and that will only INCREASE their effective tax rate (how can additional taxes paid REDUCE their tax rate?)
2. Provably false. See EITC. You can have an income and get tax back - even refunded more than the taxes you paid in. Meaning you can, in effect, not only not pay taxes on income, but get paid to not pay those taxes.
3. And how does that factor into anything? Tax payments, tax rates are still going up for the rich - and down for the poor. How are the taxes paid by all taxpayers NOT heavily progressive?
4. Yes, that's the point of savings! A little saved every month over a long period builds up. Pass it on to your next generation, and it grows even faster. Of course, you get to pay up to a 20% capital gains tax rate on that income you earn from accumulated wealth. It's hardly tax-free - and is at a rate to put you solidly in the top 5% in terms of tax rates.
As far as progressive tax, WE HAVE progressive tax! Everything I've shown proves as much. How much more progressive should it be?
Proof that Forbes lies? Because looking at Apple's published, audited financial information, I see an income before taxes of $17.7 billion - and they pay $4.6 billion in taxes, about a 23% tax rate. Now, if you are privy to some secret information you could make history and become a "Woodward and Bernstein" level famous journalist by revealing counter information and having Tim Cook and the rest of the executive team sent to prison for violating SOX laws...
It seems to me that Forbes is telling the truth. And the published, SOX-compliant reporting from Apple backs that up.
You mean like the 2008 Financial collapse? If you kept your money still invested in stocks, it would be back up to beyond where it was in 2008. How is that wiped out? Only those who were living on leveraged money took it in the shorts. Sure, my house dropped 30% in value in 2008 - but it's now back up over where it previously peaked. I didn't have a 2nd and 3rd mortgage on the place, though - so I wasn't gambling with "on paper" money - leveraged assets.
Not sure of your age, but I am sufficiently advanced (two score and 6!) that I can remember my grandparents AND parents who constantly harped on saving, paying with cash as much as possible, and paying off your debts as quickly as possible. They all lived through financial nightmares that would make today's issues seem like a stubbed toe. Where did they learn those lessons? Seeing what happens when you didn't - the results of bad decisions. Preventing people from experiencing the results of bad choices does not help them learn from those bad choices.
One of the best pieces of advice I ever got, I got from the first engineer I ever worked for, at the young age of 19. He said "you only learn from failure. Success can be dumb luck, but failure is all you". Perhaps we need to let people learn more - not everyone wins first place, not everyone will get a beachfront house and Mercedes.
As far as HOW to do it, look south to Chile. It's a system that works, works VERY well, encourages personal savings (heck, we could do the same - lift the annual cap on IRA contributions), and is guaranteed - unlike our Social Security system. It's become the model that most of South America has adopted and, when it's not riddled with corruption (Argentina) it works really really well.
You do understand that SSI "contributions" AND payments are capped, don't you?
Peruse the latest income tax return data. The top 1% have a 24% income tax rate. They also average just under $1 million in income. So they are paying at least (assuming they are NOT self-employed and have to pay both halves) another 1.1% SSI effectively on their entire income. Meaning that their SSI, FICA and income tax rate is, on average, 25%. I wonder how many other people have a tax rate approaching that?
What tax rate is "suitable" for the rich? Where do you draw the line on "rich"?
Too many do not realize that Social Security is not a guarantee or promise, it carries no legal weight or requirement to pay anybody anything. It is simply an at-will program of the Federal Government and can be adjusted and even eliminated by a simple majority vote of Congress and the stroke of the pen of the President. And every penny just goes straight to the Federal Government - nothing back to any taxpayer.
Your Social Security contributions carry no legal promise, guarantee or obligation to be paid back to you. It's a general tax, as far as legal obligations go, and the Federal Government has zero legal requirement to pay you a single dime. It's not a retirement plan at all (because you are not guaranteed some sort of payback); it's simply a vote-buying mechanism.
I would LOVE to see the data that backs that claim, because what I see is that the top 1% have consistently paid a MUCH higher income tax rate than their share of income would dictate. At least since 1980... If you are in the top 1%, you will be in the group that earns 17% of all income. And you also will pay an average 24% income tax rate, and pay 37% of all income taxes. So you make 1/6th of all income and get to pay more than 1/3rd of all income taxes. How is that considered undertaxed?
How mandatory is the payment of SSI? According to at least one Congressman, and the Supreme Court has also ruled that Social Security carries no legal obligation or promise. It is a benefits program that can be legally changed or even ended at any point, with no repercussion relating to the taxes collected from you. You have no legal right to your Social Security payments.
I'd say that is a LONG WAY from being mandatory. Sounds more like it's at-will by the Government, since there is no legal obligation to pay anyone any Social Security.
Clearly the richest 1% are showing how greedy they are by receiving less than half of what they paid in. And they also pay the most in income taxes - clearly they are not interested in spreading their wealth around enough!
As the song goes, "tax the rich, feed the poor, til there are no rich no more". We'll still have poor - just a lot more of them.
"All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills." —US Constitution Article I, section 7, clause 1.
Bah, that pesky Constitution! Obamacare trashed this rule, since it was written in the Senate and was found, legally, to include many taxes...
Just think how much you could save for yourself if you could keep 67% of your Federal income tax - and all your SSI/FICA payments - over the course of working 35-40 years... And that savings would survive to your estate/inheritors, not just disappear like SSI does, once you die.
claiming Obama was cutting Medicare whereas he (Romney) would not. If that's not a show of popular support, nothing is.
Obama DID cut Medicare - Obamacare does just that very thing ("The ObamaCare Medicare cuts are estimated at $716 billion"). It wasn't just a claim, it was a recital of fact.
Just fill this out and you get an ITIN - which is as accepted as a Social Security number. It's even the same 3-2-4 type of number as a SSN, so it works great for illegal aliens to use for opening bank accounts, getting benefits, etc. And yes, a past girlfriend of mine (Thai national) had overstayed her visa about 8 years and used her ITIN for everything. At least she earned a living doing nails at a local nail salon, but it was a cash business (she "leased" her nail station). Never had a problem filing a tax return or getting benefits when she needed them... ITIN to the rescue!
Uhh, no. If you get a raise at work, do you now pay more for a haircut, or for a pound of beef? No. But the Government does take more of what you earn.
I have no problem with tracking Government growth to inflation plus population growth - I wrote that above. If you have twice the number of customers, your costs are doubled. And as your cost of materials/salaries increases (cost of living), then your costs increase as well. That's population growth and inflation, combined. However, why should cost of Government increase with income, which has outstripped inflation and population growth combined?
I guess it comes down to the belief that Government exists to consume a certain portion of your income, or to provide a limited set of services. If my income increases, I don't pay my mechanic or plumber more money. If my income increases the restaurants and gas stations don't charge me more. Costs of Government should increase at a rate about equal to inflation plus population growth - not personal income growth.
Unfortunately, 70% of Federal Government spending is simply checks to others, it's already redistributing income (over $2 trillion a year) at a massive rate. I fear if it continues, more and more jobs will simply move overseas - and thus the vicious cycle continues.
What I would do is the following:
- Set the personal income tax rate to 20% - that includes income taxes and SSI/FICA. Flat - even for everyone, no deductions. Make the US personal income tax system simple, easy, and attractive - you know EXACTLY how much you're going to pay, right up front.
- Zero out the corporate income tax. 0%. Become the ultimate tax haven for every company in the world. Manufacturing, financial, IT - no one has a 0% tax rate, except the US.
Focus on doing what you can to grow the economy and build jobs here, rather than trying to simply pay people to not work. It's what we're doing now (70% of Federal spending), and it's not working.
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Take the Forbes 400 - the 400 richest people. Combined net worth is around $1.7 trillion. Now distribute that to the bottom 6 billion people on the planet. Everyone gets $283. About $22 per month - less than a dollar day. That doesn't make the poor appreciably any better off, but those 400 are now as poor as the other 6 billion who just received their $283.
How much do you think the day laborer paid in cash declares? Do you think barbers and waitresses declare all their tips? You think only the rich declare their income? The facts are the facts - 24% is the average income tax rate for the top 1%. I know it runs counter to your world-view, but that's the truth.
No need to eliminate it - just freeze COLA adjustments from here on out. Or cut payments 5% "to ensure the stability of the program" - and then freeze. In 20 years, it's basically gone - and the Government keeps rolling in the taxes...
Also, if a top earner is actually paying 24 percent income tax, they don't live in one of the states with no income tax.
Real top earners have a median income tax of around 8 percent.
Only suckers who can't afford tax lawyers and tax accountants pay 24 percent.
Fwiw, my brother and uncle both work in tax and insurance law in NYC.
Wrong. See the actual tax return data for yourself. I've linked it above and now here - it is quite eye-opening. The FEDERAL (not State - FEDERAL) tax return data shows the average income tax rate of the top 1% is 24%. AVERAGE, FEDERAL. Nothing to do with State. If you're unlucky enough to live in California (like I do), then you get the privilege of paying up to another 10.5% on top of that.
OK, so we don't cap SSI contributions. Do we cap SSI payments? Or do we end the entire charade that it is a "retirement plan" and just call it out as what it is - a money transfer plan, a general tax levied and payments made with no legal obligation for those being paid?
1. Please read the rest of my comment. I factor in Social Security - and that will only INCREASE their effective tax rate (how can additional taxes paid REDUCE their tax rate?)
2. Provably false. See EITC. You can have an income and get tax back - even refunded more than the taxes you paid in. Meaning you can, in effect, not only not pay taxes on income, but get paid to not pay those taxes.
3. And how does that factor into anything? Tax payments, tax rates are still going up for the rich - and down for the poor. How are the taxes paid by all taxpayers NOT heavily progressive?
4. Yes, that's the point of savings! A little saved every month over a long period builds up. Pass it on to your next generation, and it grows even faster. Of course, you get to pay up to a 20% capital gains tax rate on that income you earn from accumulated wealth. It's hardly tax-free - and is at a rate to put you solidly in the top 5% in terms of tax rates.
As far as progressive tax, WE HAVE progressive tax! Everything I've shown proves as much. How much more progressive should it be?
Proof that Forbes lies? Because looking at Apple's published, audited financial information, I see an income before taxes of $17.7 billion - and they pay $4.6 billion in taxes, about a 23% tax rate. Now, if you are privy to some secret information you could make history and become a "Woodward and Bernstein" level famous journalist by revealing counter information and having Tim Cook and the rest of the executive team sent to prison for violating SOX laws...
It seems to me that Forbes is telling the truth. And the published, SOX-compliant reporting from Apple backs that up.
You mean like the 2008 Financial collapse? If you kept your money still invested in stocks, it would be back up to beyond where it was in 2008. How is that wiped out? Only those who were living on leveraged money took it in the shorts. Sure, my house dropped 30% in value in 2008 - but it's now back up over where it previously peaked. I didn't have a 2nd and 3rd mortgage on the place, though - so I wasn't gambling with "on paper" money - leveraged assets.
Not sure of your age, but I am sufficiently advanced (two score and 6!) that I can remember my grandparents AND parents who constantly harped on saving, paying with cash as much as possible, and paying off your debts as quickly as possible. They all lived through financial nightmares that would make today's issues seem like a stubbed toe. Where did they learn those lessons? Seeing what happens when you didn't - the results of bad decisions. Preventing people from experiencing the results of bad choices does not help them learn from those bad choices.
One of the best pieces of advice I ever got, I got from the first engineer I ever worked for, at the young age of 19. He said "you only learn from failure. Success can be dumb luck, but failure is all you". Perhaps we need to let people learn more - not everyone wins first place, not everyone will get a beachfront house and Mercedes.
As far as HOW to do it, look south to Chile. It's a system that works, works VERY well, encourages personal savings (heck, we could do the same - lift the annual cap on IRA contributions), and is guaranteed - unlike our Social Security system. It's become the model that most of South America has adopted and, when it's not riddled with corruption (Argentina) it works really really well.
You do understand that SSI "contributions" AND payments are capped, don't you?
Peruse the latest income tax return data. The top 1% have a 24% income tax rate. They also average just under $1 million in income. So they are paying at least (assuming they are NOT self-employed and have to pay both halves) another 1.1% SSI effectively on their entire income. Meaning that their SSI, FICA and income tax rate is, on average, 25%. I wonder how many other people have a tax rate approaching that?
What tax rate is "suitable" for the rich? Where do you draw the line on "rich"?
And which include Apple and other corporations paying 1/1000th the tax rate that individuals do.
Apple is paying about an 18% tax rate, so I guess the average individual has around a 0.018% income tax rate?
With the GOP slashing welfare, the alternative is skyrocketing disability recipients.
I wonder what slashing of welfare that would be, that passed Harry Reid's muster and President Obama's pen?
Too many do not realize that Social Security is not a guarantee or promise, it carries no legal weight or requirement to pay anybody anything. It is simply an at-will program of the Federal Government and can be adjusted and even eliminated by a simple majority vote of Congress and the stroke of the pen of the President. And every penny just goes straight to the Federal Government - nothing back to any taxpayer.
Your Social Security contributions carry no legal promise, guarantee or obligation to be paid back to you. It's a general tax, as far as legal obligations go, and the Federal Government has zero legal requirement to pay you a single dime. It's not a retirement plan at all (because you are not guaranteed some sort of payback); it's simply a vote-buying mechanism.
The richest have been undertaxed for decades.
I would LOVE to see the data that backs that claim, because what I see is that the top 1% have consistently paid a MUCH higher income tax rate than their share of income would dictate. At least since 1980... If you are in the top 1%, you will be in the group that earns 17% of all income. And you also will pay an average 24% income tax rate, and pay 37% of all income taxes. So you make 1/6th of all income and get to pay more than 1/3rd of all income taxes. How is that considered undertaxed?
How mandatory is the payment of SSI? According to at least one Congressman, and the Supreme Court has also ruled that Social Security carries no legal obligation or promise. It is a benefits program that can be legally changed or even ended at any point, with no repercussion relating to the taxes collected from you. You have no legal right to your Social Security payments.
I'd say that is a LONG WAY from being mandatory. Sounds more like it's at-will by the Government, since there is no legal obligation to pay anyone any Social Security.
Clearly the richest 1% are showing how greedy they are by receiving less than half of what they paid in. And they also pay the most in income taxes - clearly they are not interested in spreading their wealth around enough!
As the song goes, "tax the rich, feed the poor, til there are no rich no more". We'll still have poor - just a lot more of them.
"All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills." —US Constitution Article I, section 7, clause 1.
Bah, that pesky Constitution! Obamacare trashed this rule, since it was written in the Senate and was found, legally, to include many taxes...
Just think how much you could save for yourself if you could keep 67% of your Federal income tax - and all your SSI/FICA payments - over the course of working 35-40 years... And that savings would survive to your estate/inheritors, not just disappear like SSI does, once you die.
claiming Obama was cutting Medicare whereas he (Romney) would not. If that's not a show of popular support, nothing is.
Obama DID cut Medicare - Obamacare does just that very thing ("The ObamaCare Medicare cuts are estimated at $716 billion"). It wasn't just a claim, it was a recital of fact.
Just fill this out and you get an ITIN - which is as accepted as a Social Security number. It's even the same 3-2-4 type of number as a SSN, so it works great for illegal aliens to use for opening bank accounts, getting benefits, etc. And yes, a past girlfriend of mine (Thai national) had overstayed her visa about 8 years and used her ITIN for everything. At least she earned a living doing nails at a local nail salon, but it was a cash business (she "leased" her nail station). Never had a problem filing a tax return or getting benefits when she needed them... ITIN to the rescue!
Uhh, no. If you get a raise at work, do you now pay more for a haircut, or for a pound of beef? No. But the Government does take more of what you earn.
I have no problem with tracking Government growth to inflation plus population growth - I wrote that above. If you have twice the number of customers, your costs are doubled. And as your cost of materials/salaries increases (cost of living), then your costs increase as well. That's population growth and inflation, combined. However, why should cost of Government increase with income, which has outstripped inflation and population growth combined?
I guess it comes down to the belief that Government exists to consume a certain portion of your income, or to provide a limited set of services. If my income increases, I don't pay my mechanic or plumber more money. If my income increases the restaurants and gas stations don't charge me more. Costs of Government should increase at a rate about equal to inflation plus population growth - not personal income growth.
Unfortunately, 70% of Federal Government spending is simply checks to others, it's already redistributing income (over $2 trillion a year) at a massive rate. I fear if it continues, more and more jobs will simply move overseas - and thus the vicious cycle continues.
What I would do is the following:
- Set the personal income tax rate to 20% - that includes income taxes and SSI/FICA. Flat - even for everyone, no deductions. Make the US personal income tax system simple, easy, and attractive - you know EXACTLY how much you're going to pay, right up front.
- Zero out the corporate income tax. 0%. Become the ultimate tax haven for every company in the world. Manufacturing, financial, IT - no one has a 0% tax rate, except the US.
Focus on doing what you can to grow the economy and build jobs here, rather than trying to simply pay people to not work. It's what we're doing now (70% of Federal spending), and it's not working.
You mean SUGGESTED postures - not approved. I wonder how many desks you've seen than fit that role? And I wonder why you singled out John McCain?
But there are mountains. Lots of them.