Posted on 10/14/2003 2:10:35 PM PDT by abnegation
Edited on 04/22/2004 12:37:23 AM PDT by Jim Robinson. [history]
No such thing as a non-taxable T-bill.
If my Flash skills were sharper I would create Neil Cavuto with a pumkin head dancing to the music Pumkin Head by The Seatbelts. I bet it would make air on Halloween. Does anyone know anyone with Flash skills? Anyone? Anyone?
The "rich" don't pay a smaller percentage of their income in taxes; they may be able to pay a smaller percentage of their wealth in taxes. "Rich" people are people with significant wealth. The "rich" do not necessarily have high incomes and people with "higher" incomes aren't necessarily rich.
Yes, the tax code is full of distortions and both incentives and disincentives. It is mostly the attempts to "soak the rich" or to make the tax code more progressive (or "fair" if you are a democrat) that pervert the tax code beyond any semblance of reason. Yes, a rich b*tch like Arianna Huffington can exploit the tax code so that she has little or no "income" and therefore pays little in taxes. This is due to the "fact" that she did not have a six-figure income in a particular year (based on the definitions in the tax code). Your hypothetical example falls apart because it ignores the realities of the tax code, or calls revenue income or ignores expenses, etc.
That much is true -- due to the market forces of supply and demand producing equilibrium interest rates in the financial markets. (Since investors must pay taxes on interest income, they require a higher price, i.e. interest rate, for funds made available for taxable interest securities than do investors for tax-free interest securities.
What?
If you are going to think that way, why not move to China, where you can be sure no one is getting away with keeping too much money?
What do you think the million dollar earner would do with this $384k if he was allowed to keep it? Stuff it in mattresses? Burn it in his gargantuan fireplace while laughing maniacally?
No, he would in some form or fashion put it back into the economy. In fact, that is just what deductions encourage: bigger houses and more business activity.
What do you think the government is going to do with it? They will give it to those willing to return a cut back to congress in the form of political contributions.
On most amortization schedules I've seen, early payments are mostly comprized of interest. So initially, a $7k payment could include $5k of interest. I didn not include the property taxes, which are also deductible. The key point here is that renters may not deduct any portion of their housing cost. Now there are wealthy renters and poor homeowners, so it is not a purely income-related issue. However I would guess that fewer folks who earn less than $50k own homes than those who earn more than $100k, for example.
Home ownership is a good thing and it is natural that there should be preferences in the tax code to encourage and support home ownership. But those justifiable deductions do skew the effective tax rates being paid.
Regarding the reduced deductions at higher income levels, I ran these numbers through an automated tax program. I don't know if it should have reduced the deductions, but it didn't. Reducing deductions proably tends to make the tax fairer, but adds yet another layer of complexity.
Unless you had some major disaster or medical expenses, I bet that you pay a higher percent. I think you do not understand how the tax code works.
As if it's any of our business how much someone else makes or needs. I don’t recall the constitution calling for equality under the law for everyone except wealthy people. But what does happen if the top marginal rates go too high is that "greedy bastard" who makes a million a year will simply say to himself, "It's simply not worth the time/risk/hassle/aggravation to grow my business, hire more employees, buy more equipment, deal with regulations, to earn that extra 500k a year when Joe Lieberman is only going to take most of it away from me to feed the Washington parasites. Instead, I'll just hang it up and head to the beach and enjoy the hell out of my savings instead of investing them for the future. Screw them all.”
If this ...and...if that...
If 'if's and 'but's were candy and nuts we'd all have a merry Christmas.
I don't know who the 'rich' are. But I do know that some high income individuals, due to legitimate deductions and adjustments, pay a smaller percentage of the gross income then person with lower incomes. In some cases it is a dramatic difference.
Wealth is a different matter from income, as you correctly point out. It is taxed in various ways: capital gains, property tax, intangibles tax, estate tax, etc. Some of those taxes only affect those with significant assets. Some forms of wealth, such as municipals bonds, can generate income which is not taxed or is taxed at a lower rate.
Your hypothetical example falls apart because it ignores the realities of the tax code, or calls revenue income or ignores expenses, etc.
If you have a specific complaint, you can mention it. I plugged the numbers into a tax calculation program and it came up with the same calculation I made. Sure it's just an example, but it is within the rules that I am aware of. I'm not sure where revenue comes into it, that's usually a term for business income. If expenses were included it would probably skew the rate even more because few lower income folks have enough deductions to itemize them.
If the poster had indicated how much income his boss had made then we wouldn't have to guess. It would be easy to draw the conclusion that because the dollar amount of his boss's tax was large, he paid his 'fare shair' of taxes. However a reasonable guess is that the boss paid a smaller percentage of his income in taxes then the poster himself did. Now perhaps a billionaire's 'fair share' is smaller then his accountant's is. I don't know what anyone's 'fair share' is, so I can't say for sure.
No sweat. It happens.
My gross taxes exceeded the salary of someone earning 1/3 of my income.
Gross taxes? What are those? Some taxes are deductible from other taxes so the net tax paid is the number that matters. If you're in the 30% or higher tax bracket and have other, non-deductible taxes, that would seem likely.
You have proved no points except for a bad case of envy.
I'm not envious of those who earn more then I do. I'm envious of those who pay a lower effective tax rate then I do.
Nope. You made that up.
Add to this all of the other taxes and our joint gross tax rate is 46%.
Let me ask again, what do you mean by "gross tax rate?" You remind me of a guy I was talking to the other day. He said he used to pay something like 70% in taxes. I challenged him on that number. It turns out he simply added up all the tax rates paid. That is, 30% income tax + 8% sales tax + 2% car tax and so on. I'm sure you're not as 'innumerate' as that, but I don't know what you mean by 'gross tax rate.' Some taxes are deductible from other taxes, so simply adding them all up is meaningless. It's the net final taxes paid that matter.
All I keep hearing from you is progressive envy to soak the rich.
You are delusional. I've never expessed that.
Many of my friends are heading out of country because of this. I have been looking myself, but have only decided to send my investments off-shore for now.
OK, thanks for revealing where your loyalty is. And don't forget that you'll be liable for paying US income tax as long as you're a citizen regardless of domicile unless you're a tax cheat. Hasta la vista.
United States citizens living abroad are required to file annual U.S. income tax returns and report their worldwide income if they meet the minimum filing requirements for their filing status and age.
IRS FAQ
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.