mlmpetert
10-20-2011, 02:28 PM
So this thread is inspired by Herman Cain’s 999 but isn’t necessarily about it. Its also inspired by the occupy Wall Street guys who have several messages, one of them being paying for one’s “fair share”. With both the occupy movement and Cain’s 999 plan we have seen a lot of philosophical thought with regards to what different people think is fair when it comes to paying taxes. Cable news, articles online and blogs offer their opinion as what they deem fair or just but they don’t really get any counter point or devil’s advocate type opinion because all too often they are directing their message at a base that is all ready set to agree with them.
I have never heard so much thought and talk centered around taxes in my life! I think this is one of the most important debates or talks people and politicians can have because its routed in thoughts around prosperity, fairness, equality, and personal & social responsibitly. So whats thewarpath's opinion on equality?
my thoughts:
With regards to taxes I believe they are a necessary evil. I hate them but not because I don’t appreciate the things they provide, but because I view the progressive and incentive laden system as intrinsically unfair and overly complicated. I studied some tax while in school and something that shaped me tax ideology was stumbling on a particular part of the Hobby Loss Rules. Without getting into much detail the Hobby Loss Rules try to prevent people from taking income deductions on what the IRS determines is more hobby then actually business. The rules are pretty straight forward; however, if your hobby/business happens to be breading, showing, training or racing horses the rules are much more laxed. In my experience the only people who bread, show, train or race horses, and therefore benefit by doing so, are rich.
In recent weeks or months we have been reminded that 47% of households pay no federal income taxes. Many are quick to point out that even those who may not pay federal income taxes still pay taxes via payroll taxes at 15.3%. The problem with that line of thought is that payroll taxes are forced savings that are held for your direct benefit later in life. In the case of SS the amount you end up getting when retired is directly related to how much you were forced to save during your working lifetime.
About 15% of ”taxpaying” households pay absolutely zero in combined federal income and payroll taxes. While half of these people are seniors that do not work and are therefore not subject to any payroll tax, the other half are people who make less then 20k a year and have at least 1 kid. A portion of these poorest families actually pay a negative tax as they get money back in excess of any income withholding and payroll tax paid during the tax year. Also worth noting is that many people receive benefits unrelated to tax deductions, credits and refunds. Welfare, food stamps and housing vouchers are some of the more substantial benefits available for the lowest income earners.
With all that said I personally believe that everyone who earns money should pay taxes. I also think everyone should pay the same percentage in taxes, which is absolutely not regressive as some say, its proportional. Don’t worry under a completely proportional tax system the rich still pay more in taxes. I do not understand (although im open to consideration) why some people should pay a different percentage in tax then others. I will say that while I like flat tax plans and hybrid flat/fair tax plans like Cain’s, I do think “passive income” should also be taxed the same as “earned income” under a proportional system, so things like capital gains and qualified dividends would be taxed like everything else. As much as the estate tax sounds like a “king’s tax” I would be up for taxing estates but only at the same equal rate as all other income. Im undecided on SS.
I do feel that its society’s responsibility to help and I have compassion for the 7% percent or so of families that currently pay zero or a negative amount in combined income and payroll taxes, as well as those in very hard but slightly better situations. I think additional benefits should be available to people who need them although instead of just giving them money in the form of a yearly refund check to spend on anything they want I think the benefits should be more controlled and have a focus on eliminating generational poverty.
So my thoughts are everyone should pay taxes at a equal rate on all and any income. I also think business should pay taxes in the same fashion. This all comes from a fairness and equality standpoint.
What are you thoughts? Should some people pay a higher percentage in taxes than others? Should everyone pay the same? Should people only pay based on what they consume? Is it okay that we all benefit for services that only 50% pay for while the remaining 35% only pay for direct future benefits to themselves and with 15% paying nothing at all? Is it okay that the 15% who pay nothing at all are giving tax refunds paid by everyone else to do with whatever they like?
I have never heard so much thought and talk centered around taxes in my life! I think this is one of the most important debates or talks people and politicians can have because its routed in thoughts around prosperity, fairness, equality, and personal & social responsibitly. So whats thewarpath's opinion on equality?
my thoughts:
With regards to taxes I believe they are a necessary evil. I hate them but not because I don’t appreciate the things they provide, but because I view the progressive and incentive laden system as intrinsically unfair and overly complicated. I studied some tax while in school and something that shaped me tax ideology was stumbling on a particular part of the Hobby Loss Rules. Without getting into much detail the Hobby Loss Rules try to prevent people from taking income deductions on what the IRS determines is more hobby then actually business. The rules are pretty straight forward; however, if your hobby/business happens to be breading, showing, training or racing horses the rules are much more laxed. In my experience the only people who bread, show, train or race horses, and therefore benefit by doing so, are rich.
In recent weeks or months we have been reminded that 47% of households pay no federal income taxes. Many are quick to point out that even those who may not pay federal income taxes still pay taxes via payroll taxes at 15.3%. The problem with that line of thought is that payroll taxes are forced savings that are held for your direct benefit later in life. In the case of SS the amount you end up getting when retired is directly related to how much you were forced to save during your working lifetime.
About 15% of ”taxpaying” households pay absolutely zero in combined federal income and payroll taxes. While half of these people are seniors that do not work and are therefore not subject to any payroll tax, the other half are people who make less then 20k a year and have at least 1 kid. A portion of these poorest families actually pay a negative tax as they get money back in excess of any income withholding and payroll tax paid during the tax year. Also worth noting is that many people receive benefits unrelated to tax deductions, credits and refunds. Welfare, food stamps and housing vouchers are some of the more substantial benefits available for the lowest income earners.
With all that said I personally believe that everyone who earns money should pay taxes. I also think everyone should pay the same percentage in taxes, which is absolutely not regressive as some say, its proportional. Don’t worry under a completely proportional tax system the rich still pay more in taxes. I do not understand (although im open to consideration) why some people should pay a different percentage in tax then others. I will say that while I like flat tax plans and hybrid flat/fair tax plans like Cain’s, I do think “passive income” should also be taxed the same as “earned income” under a proportional system, so things like capital gains and qualified dividends would be taxed like everything else. As much as the estate tax sounds like a “king’s tax” I would be up for taxing estates but only at the same equal rate as all other income. Im undecided on SS.
I do feel that its society’s responsibility to help and I have compassion for the 7% percent or so of families that currently pay zero or a negative amount in combined income and payroll taxes, as well as those in very hard but slightly better situations. I think additional benefits should be available to people who need them although instead of just giving them money in the form of a yearly refund check to spend on anything they want I think the benefits should be more controlled and have a focus on eliminating generational poverty.
So my thoughts are everyone should pay taxes at a equal rate on all and any income. I also think business should pay taxes in the same fashion. This all comes from a fairness and equality standpoint.
What are you thoughts? Should some people pay a higher percentage in taxes than others? Should everyone pay the same? Should people only pay based on what they consume? Is it okay that we all benefit for services that only 50% pay for while the remaining 35% only pay for direct future benefits to themselves and with 15% paying nothing at all? Is it okay that the 15% who pay nothing at all are giving tax refunds paid by everyone else to do with whatever they like?