Gentlemen, I must disagree for one fundamental reason -- the U. S. Tax Code is chock-full of 'escape-mechanisms' that the wealthy use (and there are HUNDREDS of them) to avoiding paying anything close to a 'fair share' of taxes. Sure, ON PAPER, Mr. and Ms. Megabucks may be in the tip-top tax-bracket -- but by the time they have their tax attorneys and tax accountants take full advantage of all the loopholes, shelters, exclusions, exemptions, deductions, and "carried interest" provisions, the rich frequently PAY LITTLE OR NOTHING. Guys, if you know me at all, you know I'm not some wild-eyed, America-hating radical Democrat, but those are the facts about the wealthy and the way they are taxed. We need to completely throw out the U. S. Tax Code as it stands today and start over, eliminating ALL of the 'goodies' I mentioned above. Then, and only then, would we finally have a fair tax system.
Then explain how the top tier, over 2 million pay the highest effective rate yet are only 0.1% of the taxpayers?
I do not believe that they actually pay that amount, or anything close to that, honestly. ON PAPER, using little more than assumed "tax brackets" and 'gross estimates' (before application of all the tax code "goodies") they may appear to pay the most, but when you get "down into the weeds", they don't. I'm not an accountant, but I've known LOTS of them.... They've all told me for decades that both "Fat Cat" Republicans and "Limousine Liberal" Democrats laugh all the way to the bank because of our rotten, stinking, corrupt, totally unfair taxation system. Sure, the majority of the über-wealthy pay some portion of what they should have to pay, and, yes, it is a large amount of money -- it SHOULD be. But I truly don't believe it is anywhere near what they would pay without all the loopholes and shelters and write-off's.... In fairness to Donald Trump, his recent tax reform took some action to help correct the situation -- particularly with regard to the way that Democrat-infested states leverage SALT (property taxes) to keep money that SHOULD go to the Federal Government kept in those same Democrat-infested states. But, honestly, it's 'a drop in the bucket' compared to REAL tax reform of the kind that we need to make the entire system truly fair.
Yes, the "effective rate" would indicate that they would pay a higher percentage: https://www.investopedia.com/terms/e/effectivetaxrate.asp Ah, but then the tax attorneys and accountants sharpen their pencils, pore through the immense document that is the U. S. Tax Code, and find countless loopholes, deductions, exclusions, exemptions, and shelters which, as I said, protect them from having to pay anything close to being a "fair share". They DO pay some, certainly (unless they have the really very best tax attorneys on their payroll), but they take full advantage of all the unfair provisions made freely available in the completely unfair tax code. Please understand, I'm not even necessarily advocating a "flat tax" structure. All I'd like to see is the current tax code, complete with its "brackets", etc. -- BUT, with all the loopholes, shelters, exclusions, deductions, exemptions, and "carried interest" totally removed! Surely only those who love the corrupt, unfair tax system as it exists today could object to that....
OK, then, at what point do you think that all the "loopholes, shelters, exclusions, deductions, exemptions, and "carried interest" kick-in? Before, or after the final check is sent in to the IRS?
The marginal rate is the baseline. Using deductions like charitable donations, mortgage deductions, etc., can lower their rate from the marginal to the effective rate they actually pay.
I will try to explain this. Say I earn a lower income than you and say I spend $10,000 a year on goods and services. You earn more money a year and you spend $30,000 on goods and services. Because you buy more expensive food, a bigger TV etc.. and say jewellery because I can't afford to waste money on jewellery but you can. To make the maths simple, we've both paid 10% in state/sales tax etc.. So I've paid $1,000 in tax and you've paid $2,000 in tax.
Even in a flat tax you have a standard deduction. What is your measure of "fairness" as in paying their fair share, when it comes to taxation?
To their state/county/local, not federally which is what this thread is about. Again you point being what? I see you are not an American, perhaps you do not understand taxation in America. My state also has an income tax, some states don't.
OK and? If I earn more I pay more in taxes too? But again, we do not tax spending on the federal level, except for a few limited targeted excise taxes, which is TOTALLY separate from state/county/local taxation. There has been a movement to abolish federal income taxes and go with a national sales tax, but has a long way to go before it is even considered in Congress. It would be at the point of retail purchase and not an accumulated VAT.
I'm NOT an accountant or a tax person. I don't know what the "measure of fairness" is or should be. I know what we have now ISN'T it. I'm paying thousands in taxes each year, while Amazon & many other ultra-wealthy corporations & individuals pay nothing. I'm not opposed to paying my fair share, but the current status quo simply isn't right. I'm opposed to ANY politician who voted for Trump's wealthy class tax cut--regardless of party.
Because we have 50 states and DC all with separate jurisdictions and systems you'll find little discussion of state and local taxes here, mainly just federal taxation which effects us all.
How do you know if you don't know what the measure of fairness even is? And to try and say your taxes are unfair because Amazon paid no corporate income taxes, they pay lots of other taxes, is comparing apples to oranges. Amazon and other companies may not pay an income tax because they are purchasing capital equipment and expanding, engaged in R&D, had loses and bottom line they had no net corporate taxable income. Just as a wealthy person running their business taxes through their personal income taxes and the business had similar expenses. If you had huge medical expenses last year and you ended up paying to income taxes but your neighbor did not and he paid a bunch of income taxes would that be unfair? They already pay over 80% of all income taxes. Are you against the tax cut you got? Did you oppose the $10,000 cap he placed on SALT taxes?
Well, unless I want to purchase something expensive, then I can eat regular food and do the same as the poor. Then, I would pay the same amount as the poor and be able to use what should have gone to taxes for myself. See what I mean? If we each paid, let's say 10% of our gross pays, I'd be sure to pay the $2000 and you'd be sure to pay the $1000. That way, there is no loophole where I can have more off what I make, and you still have to pay the same percentage of your lower income. There is nothing more fair for all.
