Creating Fair Taxation

Discussion in 'Budget & Taxes' started by Shiva_TD, Mar 4, 2015.

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  1. Ted

    Ted Banned

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    again very very absurd. if free health care did not help the poor, just the doctors, the poor would not want or use $800 billion of it each year!!
     
  2. Shiva_TD

    Shiva_TD Progressive Libertarian Past Donor

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    Let's see if your analogy to a "can of soup" works. Let's assume $2.5 trillion in authorized general expenditures and 150 million income tax households. If everyone pays the identical amount then their annual income tax obligation per household would be $16,667 regardless of income.

    Please explain to me how a single person household earning the federal minimum wage of $7.25/hr is going to pay $16,667 in income taxes when they only have a gross income of $15,080 (actually less because of FICA taxes)?

    The only way the "can of soup" analogy works is if we divide the roughly $15 trillion in gross personal income equally among the 150 million households so that each household has $100,000/yr in income and then every household can afford to pay the $16,667/yr in income taxes. The "can of soup" analogy simply doesn't work unless you have the income equally distributed and I can't think of many people that would advocate that.

    But we can have "fair taxation" based upon an income tax if every tax paying entity pays the same "tax rate" on income but only "net income" can be taxed and not the "gross revenue" of the tax paying entity. For example a business with a gross revenue can't be expected to pay a 15% tax rate on $10 million in revenue if it's profit margin is only 8%. It would lose money just trying to operate and that would drive the enterprise into bankruptcy even though it's earning a profit.

    So I've applied the same principle across the board with only one minor exception. The enterprise continues to be able to deduct it's operating expenditures while for the individual the "operating expenditures" are defined by the "Exemption" based upon median household income. It's merely a minor difference in how we determine "net income" for each.

    Every tax paying entity, regardless of whether they're an individual, household, or business enterprise, pays the identical tax rate on all "net income" (as opposed to "gross revenue") and that's "fair taxation" for all tax paying entities.
     
  3. Shiva_TD

    Shiva_TD Progressive Libertarian Past Donor

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    Perhaps a little research in necessary as opposed to blindly believing what might be in the newspapers.

    https://en.wikipedia.org/wiki/Social_programs_in_the_United_States#Costs

    $717 billion is one hell of a lot of money but let's look at the US budget for 2010 that this analysis of welfare spending, that was exceptionally high due to the greatest recession since the Great Depression, so we can see what it cost relative to other spending.

    In 2010 the authorized expenditures of the US government were $3.456 trillion (actual) but $1.148 trillion were for Social Security/Medicare that were fully funded by the FICA/Payroll/Self-employment tax and not by corporate or personal income taxes. That left $2.308 trillion in general expenditures but only $717 billion, or 31%, of that was spent on "social programs" (direct or indirect welfare assistance to mitigate the effects of poverty) out of the entire US budget.

    https://en.wikipedia.org/wiki/2010_United_States_federal_budget

    I haven't read of another comprehensive analysis of the total social welfare expenditures since the Heritage Foundation's analysis of 2010 but we know that spending has gone down with the dramatic reduction in the unemployment rates that were about 10% in 2010. It's my understanding that last year we spent about $500 billion out of the roughly $2.28 trillion in general expenditures or about 21% of the general expenditures.

    Of course if we include Social Security and Medicare spending then the percentage paid on social welfare expenditures drops significantly but I exclude them because they have their own revenue source that has collected trillions of dollars in revenue above the actual expenditures.

    https://en.wikipedia.org/wiki/2015_United_States_federal_budget#Outlays_by_budget_function

    So yes, it's a lot of money but it's not even close to accounting for most of the federal government spending. We also know how to dramatically reduce those social welfare expenditures. If we reduce the poverty then the necessity to mitigate the poverty with social welfare expenditures is also reduced. That's something "social conservatives" can't seem to understand.

    Reducing Poverty = Reducing Welfare Assistance

    The "fiscal conservative" understands this fact while the "social conservative" generally doesn't.
     
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  4. danielpalos

    danielpalos Banned

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    Is that how the rich get richer and the poor get poorer?
     
  5. Ted

    Ted Banned

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    the poor don't in fact get poorer. For example they all have access to free state of the art medical care that a king didn't have access to 50 years ago.
     
  6. Ted

    Ted Banned

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    the issue is whether free health care and housing for the poor is to help the poor or to help landlords and doctors. Do you know the answer?

    - - - Updated - - -

    What fact?? and why do you feel the social conservative does not understand it.
     
  7. danielpalos

    danielpalos Banned

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    you are claiming advances in technology instead of wealth?

     
  8. Ted

    Ted Banned

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    I am claiming that if the poor now have free access to state of the art medical care that a king didn't have access to 50 years ago the poor are not get poorer but rather far far richer.
     
  9. danielpalos

    danielpalos Banned

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    just claiming advances in the Standard of living instead of wealth?
     
  10. Ted

    Ted Banned

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    dear, when you're sick and get access to millions and millions of dollars of new medical care that most people can only dream of it is hard to claim you are getting poorer!! Why be so silly?
     
  11. danielpalos

    danielpalos Banned

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    not sure what you mean by, "most people". the least wealthy in our republic get the medical assistance they can afford, except in case of emergency.
     
  12. Ted

    Ted Banned

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    of course thats 100% mistaken and 100% ignorant. The least wealthy cant afford any medical assistance yet get state of the art medical assistance through Medicare, Medicaid, S-chip, Tricare, free clinics, etc.
     
  13. danielpalos

    danielpalos Banned

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    merely repeating what I stated without actually understanding it?
     
  14. MRogersNhood

    MRogersNhood Banned

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    26% would be an improvement.
    it currently about 46% everybody gets taxed in the US.
    That's psuedo-slavery.
    I heard the UK band guys talking today.UK charged them 90% of whatever they made.
    It's no wonder they came to the US.
    Taxes were lower than 46% them days, too.
    God only asks for 10%.What makes the Fed think they're THAT much better than God?
     
  15. Shiva_TD

    Shiva_TD Progressive Libertarian Past Donor

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    Nothing is "free" and the landlord is going to collect the same rent and the doctor is going to receive the same compensation regardless of whether the person receives "welfare" assistance or not.

    The first rule of the fiscal conservative is to "pay the bills" from the revenue collected annually as opposed to borrowing to pay for those expenditures.

    The income tax is the primary source of revenue for the federal government and there's more than enough net personal income (i.e. income in excess of the mandatory cost of living) in the United States to fund all of the authorized expenditures of the federal government. As previously noted in this thread if we excluded all personal income up to the "median household income" to account for the mandatory expenditures of the household the tax rate on "net (disposable) income" above that amount would have been 29% in 2013 and 24% in 2014.

    Obviously the higher income households with more than $200,000 (for single filers) or $250,000 (for married filing jointly) in "earned income" that are in the 39.6% income tax rate bracket would receive a tax cut under my proposal. At the same time the top 400 income households, with an average of $250 million in "unearned income" that paid about 18% in personal income taxes would see a tax increase.

    Once again everyone would be subjected to the identical tax rate above the "Exemption" so that only "disposable income" is taxed and not the income required for mandatory expenditures of the household so the tax is fair. Some would pay more in taxes while the majority would actually realize a tax cut under this proposal and all of the authorized expenditures of the federal government would be funded.
     
  16. Ted

    Ted Banned

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    1) if there was more than enough we would not have a $20 trillion deficit
    2) raising taxes destimulates the economy so we don't want to do it
    3) cutting expenditures is a good idea since they are sky high and obviously don't do any good
    4) lowing taxes is a good idea because it stimulates the economy
     
  17. Meta777

    Meta777 Moderator Staff Member

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    No we shouldn't.....:/ I agree.
    The reason we do is because, for what ever reason, our politicians have not been willing to collect enough in taxes to cover the costs.

    Is that so? Is it always a good idea? Does it/will it always stimulate the economy?
    If not, then when will it stimulate, and when wont it?....Also, does it matter one way or another as to who's taxes get lowered the most??

    -Meta
     
  18. Ndividual

    Ndividual Well-Known Member

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    A flat tax rate would be fairest if everyone had to pay taxes in some form or another.
    Those with no income at all or receiving government aid who are able bodied could be compelled to perform a predetermined number of hours of community services equivalent to the amount of government aid they receive which would be adjusted upward or downward relative to tax rate changes.
     
  19. Shiva_TD

    Shiva_TD Progressive Libertarian Past Donor

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    Under-taxation of higher income households that can afford to pay higher taxation has resulted in the national debt we have today and not a lack of personal income. As my analysis indicates if we only tax the top 50% of income (i.e. all income above median income) the tax rate would have been 29% in 2013 and 24% in 2014 based upon gross personal income of the United States. Don't even try to claim that someone like Mitt Romney that earns over $20 million a year can't afford to pay $5 million in taxes.

    That all depends on what is being taxed. If the tax is increased on disposable income used for consumption then it results in less consumption but that's not true with disposable income used for investment purposes. The only investments that benefit the economy are "primary investments" (e.g, direct purchases of stocks from a corporation) but based upon an analysis of SEC transactions for a month less than 0.00005% of all investment dollars are for primary investments. Statistically, rounded off to 1/1000th of a percent the amount of investments in primary investments is ZERO. Secondary investments (e.g. purchases of existing stocks on the stock market) don't do anything for the economy.

    In general I agree and the proposal I've put forward DOES CUT TAXES. As noted it would have reduced the personal tax rate from 39.6% to 29% in 2013 and it would have reduced the 39.6% tax rate to 24% in 2014. That's a TAX CUT in case you didn't notice and it would have fully funded the Congressionally authorized general expenditures of the federal government.

    Do you believe in the US Constitution? If so then the Constitution delegates the role and responsibility to Congress to determine what the necessary expenditures of government are and is not something we have any say in. We can have opinions but it's Congress that determines if the spending is doing any good.

    Of course we can have personal opinions and I'll express a couple of mine.

    Welfare assistance mitigates the effects of poverty but was never designed to reduce poverty. When it comes to the mitigation of the effects of poverty the welfare programs have been successful although the limited funding reduces the effectiveness of the programs. If we spent more on welfare assistance then it would do a better job of mitigating the effects of poverty. What our government hasn't been doing very well is addressing the problem of poverty so that the necessity for the spending is reduced. Many complain that welfare assistance hasn't reduced poverty but they ignore the fact that it was never intended to reduce poverty. It only mitigates the effects of the poverty.

    On the other hand we know that the 2003 invasion of Iraq has created an increased terrorist threat. ISIS is a direct result of the installation of a Shi'ite controlled government in Iraq following the US invasion by the US government. That was money poorly spent because it increased the costs of the United States government to address the expanded problem of terrorism that threatens us. The same can be said of the invasion of Afghanistan because we're still there spending hundreds of billions of dollars not to mention the blood of US soldiers sent to fight that war.

    Of course hindsight is 20-20 so often we're stuck paying for poor decisions by our government.

    For example if the US government been more proactive in the "War on Poverty" by reducing poverty as opposed to simply mitigating the effects of the poverty with welfare assistance we wouldn't be spending as much on welfare assistance today. If the Minimum Wage, for example, had simply been increased based upon the cost of living there would be far less money expended on welfare for working Americans.
     
  20. Ted

    Ted Banned

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    and thats exactly what you want: less consumption, more saving and investment. Econ 101!!!!
     
  21. Shiva_TD

    Shiva_TD Progressive Libertarian Past Donor

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    >>>MOD EDIT Deleted Post Removed<<<

    Federal Income by Tax Bracket.jpg

    While this information, based upon IRS reporting, is from 2009 and our tax rates were increased slightly, those in the 15% income tax bracket (i.e. middle income households) paid more in taxes than the top two income tax brackets and capital gains taxes combined. That has not fundamentally changed since the tax increases in 2013.

    We can also note that this only relates to $1.54 trillion in personal income taxes which excludes the $1.7 trillion in other federal tax revenues (2015). Effectively the 44% claim translates into 20% of federal tax revenues while the top 1% are receiving about 30% of all gross income in the United States and own about 40% of all the wealth in the United States.

    It can also be noted that the top 400 income households, with an average annual income of $250 million each, paid an average income tax of about 17.5% on gross income which is about the same tax rate that a household with only $90,000/yr in gross income pays.

    In point of fact some high income households are over-taxed while some are undertaxed. If the household is earning a lot of money and paying the 39.6% tax rate then they're over-taxed. If the high income household is paying a lower tax rate than someone earning far less then they're under-taxed.

    My proposal solves those problems at both ends. For the household paying a 39.6% tax rate they're tax rate would be substantially reduced under my tax proposal (29% in 2013 and 24% in 2014). For those only paying a 17.5% income tax rate their tax rate would increase (29% in 2013 and 24% in 2014). Everyone would be paying the identical tax rate above the Exemption so no one would be getting screwed or treated to favoritism under the proposal I've provided and there would be no "deficit spending" in any tax year.
     
  22. danielpalos

    danielpalos Banned

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    We could be actually solving simple poverty and capitalism's natural rate of unemployment on an at-will basis in our at-will employment States, instead of simply paying for a War on Poverty for around a generation.

    - - - Updated - - -

    The right is welcome to abolish our wars on crime, drugs, poverty, and terror.
     
  23. Shiva_TD

    Shiva_TD Progressive Libertarian Past Donor

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    No, we need more consumption while also ensuring that everyone has enough investment assets and savings to eliminate the necessity for government welfare assistance (in the form or Social Security/Medicare) when the person/household is too old to work. That criteria does not change the total amount of dollars in investments/savings where 99.99995% don't stimulate the economy anyway because they're in secondary investment markets as opposed to being primary investments that fund enterprise. No one really requires tens of millions of dollars at retirement just so they don't need Social Security/Medicare when they're too old to work but a couple of million dollars each would ensure that no one needs Social Security/Medicare when they're too old to work.
     
  24. Ted

    Ted Banned

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    do you have any idea what your point is????
     
  25. Shiva_TD

    Shiva_TD Progressive Libertarian Past Donor

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    Absolutely. I was responding to a rather ignorant opinion that implied we can't have increased consumption, that expands the economy, while also having personal savings and investments, that don't expand the economy.
     
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