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America divided by Democrats: "The Non-Paying Class"
Wall Street Journal ^ | Nov 20, 2002 | Editorial

Posted on 11/20/2002 3:11:21 AM PST by The Raven

Edited on 04/22/2004 11:47:33 PM PDT by Jim Robinson. [history]

The stars look to be in perfect alignment for tax relief. With a GOP majority in both houses of Congress, the Bush Administration is making eager and energetic noises, and the economy is in what Fed Chairman Greenspan calls a soft spot.


(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Editorial; Government
KEYWORDS: fair; journal; poor; rich; tax; taxreform; wsj
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We need to fix this by reducing the size of government and then stopping taxation of income.
1 posted on 11/20/2002 3:11:21 AM PST by The Raven
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To: The Raven

All of which suggests that the last thing the White House should do now is come up with more exemptions, deductions and credits that will shrink the tax-paying population even further.

The Crisis of Democracy

The Honorable James DeMint (R-SC)
United States House of Representatives

THURSDAY, APRIL 5, 2001
12:00 noon

"There has been a shift in the relationship between individuals and government, he argues, such that fewer and fewer are paying taxes at the same time that more and more are receiving increasingly generous benefits. If it becomes the case that most voters do not bear a financial burden for this largess, then there will be little to restrain--and significant political incentives to encourage--the continued growth of government. And at that point, DeMint warns, we have reached a major crisis in our democracy."

Milton Friedman as quoted by Northwest Florida Daily News, 10-16-2000:

Walter Williams, World Net Daily, 10-25-2000

If you're among those who pay little or no federal income taxes, what do you care about tax cuts? Moreover, if you think tax cuts pose a threat to government handout programs, you might be openly hostile and support Al Gore's silly "risky scheme" talk. So many Americans paying little or no federal taxes makes for a natural spending constituency. It's like me in the restaurant: What do I care about extravagance if you're footing the bill?

Right now the bottom 60% perceive little to no "Individual Income Tax" burden,(in many cases even a handout) and 70% of the voting public clamors for more from government looking for the top 40% of income earners/producers to foot the bill.

Effective Individual Federal Income Tax Rate (Percent of gross income)
Income Category 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 Projected
1999
Lowest Quintile -0.6 -0.8 -0.2 -0.5 -0.2 -1.3 -1.9 -2.9 -3.4 -5.6 -6.8
Second Quintile 3.6 3.9 4.6 3.5 3.9 3.2 3.3 2.7 1.8 1.8 0.9
Middle Quintile 7.1 7.5 8.3 6.8 6.8 6.1 6.5 6.3 5.9 6.1 5.4

Those that readily perceive some of the burden.

Effective Individual Federal Income Tax Rate (Percent of gross income)
Income Category 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 Projected
1999
Fourth Quintile 9.7 10.4 11.3 9.5 9.3 8.7 8.9 8.7 8.5 8.7 8.4
Highest Quintile 15.8 16.3 17.1 14.5 14.3 15.1 15.1 14.8 15.5 16.2 16.1

While Congress plays both ends against the middle; hiding the real burden in inflation, higher prices on all goods and services, lower takehome pay, lower return on investment, and higher interest rates. All keeping the poor right where they are and pushing for more freebees.

Consider that 15.3% SS/Medicare tax on the 1st $75K of wages/self-employment income, plus the 6% Federal/State Unemployment tax, all of which are but a portion of the effect of federal taxes embedded the price of all products we purchase. Taken together with the Individual tax rates above we all pay more than:

Effective Total Federal Tax Rate (Percent of reported income)
Income Category 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 Projected
1999
All Families 22.8 23.4 23.5 21.4 21.8 22.6 22.5 22.6 23.5 24.7 24.2

Data from IRS collections statistics and The Bureau of Economic Analysis as compiled in tabular form by the Congressional Budget Office.
http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0


2 posted on 11/20/2002 3:27:25 AM PST by ancient_geezer
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To: *Taxreform; Taxman; Principled; Bigun; EternalVigilance; Action-America; pigdog
Thomas Hobbes from Leviathan
3 posted on 11/20/2002 3:30:48 AM PST by ancient_geezer
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To: ancient_geezer
Yep......take all the essential government functions like judicial and defense and pay for them equally with something like a VAT - then take the functions affecting individuals (schools, health, etc) and privitize - but pay for them with an individual tax
4 posted on 11/20/2002 3:34:22 AM PST by The Raven
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To: The Raven
This won't be fixed until the country is bankrupt.

When 50%+ of the voters figure out they can vote themselves the benefits of someone else's money there is no going back.

That 50% will never voluntarily go back to paying taxes again. They are not interested in justice or even long term economic consequences, look at France and Germany as good examples of where we're going.

This is why the national sales tax as an alternative to income taxes is dead on arrival.
5 posted on 11/20/2002 3:35:37 AM PST by DB
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To: The Raven
At a minimum, the FedGov has to eliminate the payroll tax and tax everybody through a graduated progressive tax. The problem with the payroll tax is that a large number of people have no concern about what the income tax rate is, because they do not pay it. The payroll tax, however, is accepted because of the fiction that people are "putting their money in" to Social Security, and that they will be able to take "their money" out later.

The Democrats would scream bloody blue murder before they eliminate the payroll tax, because it is central to the fiction that Social Security is a savings plan, rather than just another government entitlement. But everything about the payroll tax is deceptive, including the amount actually paid. People have no idea how much their employers are kicking into this Ponzi scheme.

A rational plan would be to eliminate the payroll tax, both the employee and employer share, and start the income tax at 12% on the first dollar earned, going up to about 30% for the top marginal rate. And eliminating withholding, so the citizenry needs to write out a check of exactly how much they have to pay to the FedGov every quarter, wouldn't be a half bad idea.
6 posted on 11/20/2002 3:40:16 AM PST by Republican Landslide
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To: Republican Landslide
And will never happen.
7 posted on 11/20/2002 3:42:02 AM PST by DB
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To: The Raven
This article leaves out one thing, and that is the hidden tax that is called corporate tax. That tax is paid through the back door by consumers via higher prices in consumer goods. Since most people don't see it coming directly from their paycheck they have no idea that they are paying it.

Corporations do not pay taxes, individuals do. It's all a big scam to send money to the central state but it comes off our hides. Politcians figured out that raising incime taxes on individuals would not buy them votes, but they wanted the money anywa, so they inveted corporate taxes and conned the ignorant into believing it a tax on the rich, not realizing that corporate taxes are part of the end price of goods and services.

In reality we all pay higher taxes than the article claims. Only the taxes are backdoor taxes and hidden rather than the obvious income taxes.

Taxes are a scam and eventually stifle economic activity and expansion and that is what is happening everywhere.

8 posted on 11/20/2002 3:49:23 AM PST by Cacique
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To: The Raven
FedGov gets approx 50% of its income from personal income taxes. Tax relief could be targeted at the the other 50%. Such as:

Cut Capital Gains
Turn a portion of offshore oil production royalties back to the states.
Insert your suggestion here.

9 posted on 11/20/2002 4:04:51 AM PST by Ben Ficklin
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To: Cacique; The Raven

This article leaves out one thing, and that is the hidden tax that is called corporate tax.

Same is true of the VAT. Any time government is able to hide or disguise taxation from the electorate as a whole by burying it in inflation or "taxing the rich.", it place is base card:

A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw

Until we place the full burden in sight that the cost of largess can be perceived, we will continue to have a Congress more than willing to pander to the basest instincts of the people.

Sir Alex Fraser Tytler (1742-1813). Scottish jurist and historian:

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.

That is why we desparately need to establish the National Retail Sales Tax and dump the current tax system into the bit bucket.

10 posted on 11/20/2002 4:10:11 AM PST by ancient_geezer
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To: ancient_geezer
Simply put, a tiny group of people (553,380) were responsible for more than one-quarter of the income tax take of $877 billion.

Before numbers get thrown around too much, how much wealth is owned and/or generated by this tiny group of people? Then I would like to know how much wealth is owned and/or generated by the rest of the people. If I could see the two proportions then I would be better able to judge if and how the ratios are out of whack.

11 posted on 11/20/2002 4:21:15 AM PST by RWG
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To: Republican Landslide
Any tax scheme should be based solely on collecting revenue for legitimate government functions and issues of "fairness" and the like should play no role. These other issues should be dealt with in separate and distinct legislation.

Opponents of progressive taxation would be well advised to focus their arguments on job creation noting that higher income people save more and that an economic truism is that "savings equal investment". I don't have any current statistics but I would not be surprised if it takes about $100,000 to create a single new job. That $100,000 doesn't come from the government but must come from those with savings,i.e. capital formation.

12 posted on 11/20/2002 4:22:54 AM PST by monocle
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To: monocle
Oh how I do agree that issue of fairness not coming into play. Everyone should taxed at the same rate. And speaking of taxes, and fairness, the subject of sin taxes has not yet been brought up. The government is getting rich on our excesses. Tobacco and liquor taxes for one. We don't want to bring up gas taxes either.

The list goes on and on and on. The public has no clue, even those who think they have a clue are clueless as to how much the individual actually pays in tax versus the value of the object he thinks he is purchasing. My contention is this, We would be absolutely astounded at the wealth available in this country if we were to live without taxes for just one year, and we think we are wealthy now.

Can you think of anything the various governments do not tax? If those who came to this country in the beginning, could see what we have allowed government to do and become at our expense, they would a. Fall over laughing. b. die weeping. c. Call us fools. d. All of the above.
13 posted on 11/20/2002 5:14:51 AM PST by wita
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To: The Raven
bttt for later reading
14 posted on 11/20/2002 5:27:48 AM PST by maica
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To: Cacique
Every word you say is true, plus...

The corporate income tax is the most progressive of taxes since the finished product, in most cases, must pass through a pipeline of packagers, transporters and retailers before it even gets to where the consumer may decide to buy it. Each of these entities, essential to our modern economy, adds its tax burden to the final cost of the product.

The best example of this I can think of off the top of my head is the common loaf of bread. The last figures I saw revealed that a single loaf of bread contains roughly four to five cents worth of wheat, which goes to the farmer who grows the wheat. The rest of the cost is added, in turn, by the wholesale purchaser at the grain elevator, the corporate purchaser of the product, the transporter of the wheat, both from the elevator and then again from the corporation to the retail chain and from the chain to its individual sales outlets, and further from the retail outlet itself. Costs of transportation and manufacture are, of course legitimate costs, and should be expected. What is generally forgotten is that each of these private sector business entities must also pay taxes, all of which are added to the product before the consumer even has a chance to pay his overt sales tax on the item.

Just think how a partial cent increase in tax on each gallon of oil percolates through the economy; then think of each and every product one buys in order to live a decent life.

Then, of course, all that you've managed to save in your lifetime, paying taxes all the way, is again taxed when you die. As far as I'm concerned, even the much publicized "tax freedom day" is laughable.

15 posted on 11/20/2002 5:48:16 AM PST by logos
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To: The Raven
The RAts have created a system where those who pay nothing decide on how much the rest pay. If I had my way, you would get 1 vote fore every $1000 you pay in income and SS taxes.
16 posted on 11/20/2002 5:57:16 AM PST by Blood of Tyrants
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To: The Raven
These are interesting figures that I've seen before. I have no hope for the ultimate prosperity of this Republic and have not once I discovered (at an early age) the implications of the scam whereby Peter gets to vote to take away Paul's money.

That said, I'd like to see some hard numbers regarding ratios of income/wealth broken out in much the same way as the numbers were in the article.

For instance, if the top 5% of americans make 30% of the income of the nation, yet pay 80% of the taxes, that is truely an evil situation. If, however, the top 5% made 80% of the income and payed 80% of the taxes, the situation would still be evil (as income taxes are by definition IMO), but somewhat less so.

Do any freepers on this thread have or have seen such data?

17 posted on 11/20/2002 6:07:43 AM PST by zeugma
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To: Republican Landslide
Your ideas make entirely too much sense. They will never come to pass.
18 posted on 11/20/2002 6:10:42 AM PST by taxed2death
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To: Cacique
I think the National Taxpayers Union figured our total tax outlay to be more like 44% of our income (taking into account property, sales, school taxes, etc.). It may be even higher now.

The Republicans have got to come up with a brand-new and fair tax system that gives an immediate, tangible result to the taxpaying citizen. They have got to quit dilly-dallying around. They don't have much time. People are getting angry.

19 posted on 11/20/2002 6:28:31 AM PST by pray4liberty
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To: The Raven; RWG; ancient_geezer
Even the barest of glances at tax data reveal a system that is steeply progressive. Tax revenue has been increasingly squeezed out of top earners. According to the most recent data, from 1999, the richest -- with income above half a million dollars -- constituted 0.5% of taxpayers but accounted for 28% of total tax revenue.

This misinterprets the data it presumably relies on (the Joint Committee on Taxation study of 1999 data) and, in any event, presents an incomplete picture. See JCT Study on 1999 Data.

First of all, from a procedural standpoint alone, without knowqing what fraction of the total income the group in question earns, it is impossible to tell whether 28% is progressive, regressive, or flat.

Secondly, page 3 of the above linked report (which is the relevant data since it includes almost all income and almost all taxes, indicates that the top 1% of taxpayers (beginning at $340,000 and averaging $1 million) earn 17.2% of total income and pay 23.2% of the taxes. Therefore, this article, which claims the top 1/2 of 1% pay $877B when the data shows the top 1% paid $391B has done a shoddy job of research---at best. It's calculations leave something to be desisered as well. If the $877B figure were correct, it would represnt closer to 50% of all taxes rather than 28%.

20 posted on 11/20/2002 7:08:37 AM PST by Deuce
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To: The Raven
When the Dims successfully create a country where a voting majority pays NO taxes, and we may already be there, we will never be able to reduce taxes or government because that voting majority will always choose to raise the burden on those who pay for their free lifestyle.
21 posted on 11/20/2002 7:11:31 AM PST by Republic of Texas
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To: The Raven
" All of which suggests that the last thing the White House should do now is come up with more exemptions, deductions and credits that will shrink the tax-paying population even further. "

The key point. Reduce taxes, AND loopholes so that more people pay a lower percentage of taxes. That way more people have a vested interest in lower taxes.

22 posted on 11/20/2002 7:13:29 AM PST by Republic of Texas
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To: The Raven
NO VATS!!! They are a tool of the socialist.
23 posted on 11/20/2002 7:16:03 AM PST by Leto
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To: Leto
>>NO VATS!!! They are a tool of the socialist.

You're referring to the graduated income tax???
24 posted on 11/20/2002 8:28:18 AM PST by The Raven
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To: The Raven
I want to get rid of it too!
25 posted on 11/20/2002 8:42:45 AM PST by Leto
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To: ancient_geezer
If government were, say, only 15% of GDP, nobody would much care HOW they were taxed - VAT, flat tax, etc., would all be pretty much OK, since the overall hit would not be so bad. Plus it would be easier to make the switch from income tax to VAT (much less intrusive) because the stakes would be lower and people would not be so suspicous of a hidden tax increase. Tax reform should not just be about HOW we are taxed, but that, fundamentally we are taxed WAY TOO MUCH.
26 posted on 11/20/2002 8:53:07 AM PST by eno_
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To: The Raven
This will never happen. Washington DC would have to become a swamp again before they would release their stranglehold on the taxpayer.
27 posted on 11/20/2002 8:55:41 AM PST by dljordan
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To: zeugma; RWG
From the CBO link in reply #2 you can find the tax shares with respect to family income shares, as well as many other applicable measures presented in time series tables.

http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0

To answer your question in 1999 the

Top 5%:

accounts for 27% of the total family income and

paid 37% of total federal taxes(individual, payroll, corporate, estates etc.)

Top 1%

accounts for 15% of the total family income and

paid 21% of total federal taxes.

Another statistical source more detailed tax, income, expenditure, home ownership etc. information arranged in annual ftp folders for 1984 through 2000 though the narrowest slice is quintile data:

ftp://ftp.bls.gov/pub/special.requests/ce/standard/


28 posted on 11/20/2002 9:28:07 AM PST by ancient_geezer
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To: eno_

Plus it would be easier to make the switch from income tax to VAT (much less intrusive) because the stakes would be lower and people would not be so suspicous of a hidden tax increase.

The fundamental purposes of VATs is to assure payment and allow unperceived increases in tax rates. They always rise and the individual still pays them, the taxes are just hidden from the electorate's view in the price of goods and services as inflation.

Secondly VATs impose the greatest burden on the economy through overhead costs associated with planning, accounting, litigation, and payment of such taxes increasing such taxes by more than 65% of what they generate in revenues, not even counting the increased administration costs that hits the government budget.

Last, I really hate to be the one to inform you but for all practical purposes, our corporate tax is a VAT.

http://www.taxfoundation.org/foundationmessage03-00.html

"Under the WTO definition of the term, a sales tax is an indirect tax, as is an European-style VAT. The economic equivalence of an European-style VAT and a subtraction-method VAT is well-established. A subtraction-method VAT is essentially identical to a business income tax except that all purchases of plant and equipment may be expensed, rather than depreciated as under current U.S. law."

And every man woman and child in the nation, pays federal taxes through that VAT.

DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?

by D. Sherman Cox J.D. L.L.M. Taxation

The idea is to get rid of it and to remove the blinders over the electorates eyes, not to hide taxes even more than we do already.

To remove taxation of the individual, is to remove the goad which assures accountability of government to the electorate. Federal tax rates are high because a majority of the electorate do not proportionately perceive burden their demand for largesse imposes on the minority of citizens.

The siren call for representation without taxation is the formula that got us where we are at today. The ability to hide or disguise taxation from the view of large sectors of the electorate allows the Congress to get away with the creation of the evergrowing monster that it fosters.

A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw

Liberty and freedom have a price, responsibility. If that price is avoided there are no brakes on the growth of government, the ultimate result is the end of freedom through creeping socialism.

Right now the bottom 60% perceive little to no "Individual Income Tax" burden,(in many cases even a handout) and 70% of the voting public clamors for more from government looking for the top 40% of income earners/producers to foot the bill. That perception continues to grow ever stronger by eliminating even more participants from the Federal Individual Income Tax rolls as proposed in the tax reduction proposals through changes in personal exemption limits and other mechanisms such as the EITC, transfer of taxation into corporate(i.e. hidden sales) taxes.

29 posted on 11/20/2002 9:42:28 AM PST by ancient_geezer
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To: eno_

Tax reform should not just be about HOW we are taxed, but that, fundamentally we are taxed WAY TOO MUCH.

Patrick Henry, Virginia Ratifying Convention June 12, 1788:

Until you make the taxes visible to all, there will be no incentive to reduce the size of government, nor to reduce taxation.

Milton Friedman as quoted by Northwest Florida Daily News, 10-16-2000:

We wonder why over 60% of the voters PERCEIVE no problem with the taxrates and vote for polidiots that promise to bring home the most bacon because they are the only ones that benefit from higher taxes with more spending on socialistic "gimme" programs. As this continues under Bush or anyone else for that matter, expect a liberal tax and waste congress for many years to come.

We are all paying through the nose, rich and poor while politicians play the tune of envy and resentment that Americans continue to respond to not understanding the full picture what is happening to them. The NRST is a means to open VOTERS eyes to the reality.

30 posted on 11/20/2002 9:48:41 AM PST by ancient_geezer
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To: ancient_geezer
My point, exactly. You are going to get just as passionate a response to flat tax proposals in that they do not get rid of IRS intrusion into our personal lives. But ANY type of reform is going to be easier if you get the level of government spending down.
31 posted on 11/20/2002 9:50:45 AM PST by eno_
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To: eno_

My point, exactly.

Nice attempt a spin, but not quite, you expect that government will magically go on a reduction diet while the majority of the electorate perceives little tax burden. History demonstrates quite the contrary is true.

But ANY type of reform is going to be easier if you get the level of government spending down.

Easier tax reform perhaps. Just how do you intend to get government spending down with the majority of the electorate pushing for more largess from government on the backs of the minority of citizens.

70% of the voting public clamors for more from government looking for the top 40% of income earners/producers to foot the bill.

Getting Spending down is by far the more difficult tax under such conditions.

Sir Alex Fraser Tytler (1742-1813). Scottish jurist and historian:

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.

Government spending is not going down until the majority of citizens perceive the tax burden that is placed on them.

You've got the cart before the horse.

You are going to get just as passionate a response to flat tax proposals in that they do not get rid of IRS intrusion into our personal lives.

Which is precisely a good reason to be against such proposals, as well as the fact the Flat Tax increases the majority of folks who do not perceive taxes by increasing the personal exemption bracket.

Furthermore, the Flat Tax maintains a VAT component which hides the tax burden from the view by embedding it in inflation.

I'll stick with going to an NRST that meets the standard of visibility as well as getting government intrusion our of our financial privacy.

H.R.2525
SPONSOR: Rep Linder, John (introduced 07/17/2001)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer:
http://www.fairtax.org & http://www.salestax.org


32 posted on 11/20/2002 10:35:12 AM PST by ancient_geezer
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To: The Raven
bookmark bump
33 posted on 11/20/2002 12:51:12 PM PST by lepton
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To: ancient_geezer
paid 37% of total federal taxes(individual, payroll, corporate, estates etc.)...corporate taxes should be removed from the totals I am interested in. My taxes reflect the activities of my sole proprietorship and my farm because I am the account by which all of the reckoning is done. Corporations may be 'persons' but I am only interested in 'natural persons'.

34 posted on 11/21/2002 3:33:39 AM PST by RWG
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To: RWG

corporate taxes should be removed from the totals I am interested in.

You pay corporate taxes through consumption purchases as all business taxes are derived from and paid out of sales revenues. Only individual citizens can ultimately pay taxes, corporations are merely associations of individuals as stockholders, employees and customers.

Howeve,r In the CBO report corporate taxes amount to 2.9% of gross family income, distributed in proportion to family capital income on the theory that corporate taxes decrease investment returns.

See the following more detailed study of the same information for distribution tables as a function of tax type:

http://www.cbo.gov/showdoc.cfm?index=3089&sequence=11#tableG-1a

 

Table G-1a.
Effective Federal Tax Rates for All Households, by Income Quintile, Using Comprehensive Household Income Adjusted for Household Size, 1979-1997 (In percent)

  1997
Income Categorya 1979 1981 1983 1985 1987 1989 1991 1993 1995   Under
1997
Law
  Under
2000
Law

Total Effective Federal Tax Rate
 
Lowest Quintile 8.1 8.3 8.1 9.7 8.9 8.5 7.9 7.6 6.0   5.6     5.3  
Second Quintile 14.0 14.2 13.0 14.5 14.3 14.3 14.2 13.5 13.6   13.9     12.8  
Middle Quintile 18.2 18.7 17.1 17.7 17.3 17.6 17.3 17.3 17.6   17.5     16.7  
Fourth Quintile 21.2 21.9 19.9 20.2 20.0 20.3 20.2 20.4 20.8   20.5     20.0  
Highest Quintile 27.8 27.1 23.7 23.7 25.4 25.1 25.2 26.8 28.3   27.7     27.4  
 
  All Quintiles 22.3 22.4 20.2 20.6 21.3 21.3 21.1 22.0 22.9   22.8     22.3  
 
Top 10 Percent 30.0 28.4 24.7 24.4 26.8 26.2 26.3 28.5 30.4   29.4     29.1  
Top 5 Percent 32.2 29.6 25.3 24.9 27.9 27.0 27.3 30.1 32.3   30.9     30.5  
Top 1 Percent 37.3 31.8 26.8 26.0 29.9 28.2 28.9 33.3 36.4   33.3     32.7  
 
Effective Individual Income Tax Rate
 
Lowest Quintile -0.4 0.3 -0.1 0.3 -0.7 -1.1 -1.9 -2.3 -4.5   -5.0     -5.3  
Second Quintile 3.9 4.5 3.5 3.9 3.4 3.5 3.1 2.4 2.2   2.4     1.3  
Middle Quintile 7.3 8.0 6.6 6.5 5.8 6.1 5.9 5.5 5.5   5.6     4.8  
Fourth Quintile 10.1 11.0 9.1 8.9 8.2 8.4 8.2 8.0 8.0   8.1     7.5  
Highest Quintile 15.9 16.7 14.1 13.8 14.6 14.4 14.1 14.7 15.5   16.1     15.8  
 
  All Quintiles 11.1 12.0 10.2 10.1 10.2 10.2 9.8 10.0 10.4   11.0     10.5  
 
Top 10 Percent 17.7 18.3 15.5 15.2 16.4 16.0 15.7 16.7 17.6   18.1     17.8  
Top 5 Percent 19.4 19.7 16.8 16.4 18.1 17.4 17.1 18.6 19.6   20.0     19.5  
Top 1 Percent 22.4 22.0 19.1 18.5 20.7 19.5 19.7 22.5 23.4   23.0     22.3  
 
Effective Social Insurance Tax Rate
 
Lowest Quintile 5.3 5.8 5.8 6.5 6.6 7.2 7.0 6.8 7.2   7.4     7.4  
Second Quintile 7.3 7.8 7.6 8.4 8.6 8.7 9.0 8.8 8.8   9.2     9.2  
Middle Quintile 8.3 8.9 8.7 9.2 9.1 9.4 9.3 9.5 9.6   9.7     9.7  
Fourth Quintile 8.4 9.0 8.9 9.4 9.5 9.7 9.9 10.2 10.3   10.2     10.2  
Highest Quintile 5.6 6.2 6.3 6.5 6.6 6.7 7.4 7.5 7.5   6.7     6.7  
 
  All Quintiles 6.8 7.5 7.4 7.8 7.9 8.0 8.4 8.5 8.6   8.1     8.1  
 
Top 10 Percent 4.5 5.1 5.2 5.2 5.4 5.4 6.3 6.2 6.4   5.4     5.4  
Top 5 Percent 3.2 3.8 3.8 3.8 4.1 3.9 5.0 4.8 5.1   4.2     4.2  
Top 1 Percent 1.4 1.6 1.6 1.5 1.7 1.5 2.2 2.0 2.7   2.1     2.1  
 
Effective Corporate Income Tax Rate
 
Lowest Quintile 1.0 0.6 0.5 0.5 0.5 0.5 0.5 0.6 0.5   0.5     0.5  
Second Quintile 1.4 0.8 0.6 0.6 0.9 0.8 0.6 0.8 0.8   0.7     0.7  
Middle Quintile 1.6 1.0 0.9 0.9 1.2 1.1 1.0 1.1 1.2   1.1     1.1  
Fourth Quintile 1.8 1.2 1.1 1.1 1.4 1.3 1.2 1.3 1.4   1.4     1.4  
Highest Quintile 5.6 3.6 2.7 2.8 3.6 3.5 3.1 3.9 4.7   4.4     4.4  
 
  All Quintiles 3.4 2.2 1.8 1.8 2.4 2.3 2.0 2.5 2.9   2.9     2.9  
 
Top 10 Percent 7.1 4.6 3.4 3.5 4.4 4.3 3.8 4.9 5.9   5.4     5.4  
Top 5 Percent 9.0 5.6 4.2 4.3 5.4 5.3 4.7 6.0 7.2   6.3     6.3  
Top 1 Percent 13.0 7.9 5.7 5.6 7.2 6.9 6.6 8.2 10.0   8.0     8.0  
 
Effective Federal Excise Tax Rate
 
Lowest Quintile 2.1 1.6 1.9 2.5 2.5 1.9 2.3 2.5 2.7   2.8     2.8  
Second Quintile 1.3 1.1 1.2 1.5 1.5 1.3 1.5 1.6 1.8   1.6     1.6  
Middle Quintile 1.1 0.8 0.9 1.1 1.1 1.0 1.1 1.2 1.3   1.1     1.1  
Fourth Quintile 0.9 0.7 0.8 0.9 0.9 0.8 0.9 0.9 1.1   0.9     0.9  
Highest Quintile 0.7 0.6 0.6 0.6 0.6 0.5 0.6 0.6 0.7   0.5     0.5  
 
  All Quintiles 1.0 0.8 0.8 0.9 0.9 0.8 0.9 1.0 1.0   0.9     0.9  
 
Top 10 Percent 0.7 0.5 0.5 0.5 0.5 0.5 0.5 0.6 0.6   0.4     0.4  
Top 5 Percent 0.6 0.5 0.5 0.5 0.4 0.4 0.5 0.5 0.5   0.4     0.4  
Top 1 Percent 0.5 0.4 0.4 0.3 0.3 0.3 0.3 0.5 0.3   0.2     0.2  

SOURCE: Congressional Budget Office.
NOTES: Effective tax rates are calculated by dividing tax liabilities by adjusted comprehensive household income.
A household consists of the people who share a housing unit, regardless of the relationships among them.
Comprehensive household income equals pretax cash income plus income from other sources. Pretax cash income is the sum of wages, salaries, self-employment income, rents, taxable and nontaxable interest, dividends, realized capital gains, cash transfer payments, and retirement benefits plus taxes paid by businesses (corporate income taxes and the employer's share of Social Security, Medicare, and federal unemployment insurance payroll taxes) and employee contributions to 401(k) retirement plans. Other sources of income include all in-kind benefits (Medicare, Medicaid, employer-paid health insurance premiums, food stamps, school lunches and breakfasts, housing assistance, and energy assistance). Households with negative income are excluded from the lowest income category but are included in totals.
Individual income taxes are distributed directly to households paying those taxes. Payroll taxes are distributed to households paying those taxes directly or paying them indirectly through their employers. Federal excise taxes are distributed to households according to their consumption of the taxed good or service. Corporate income taxes are distributed to households according to their share of capital income.
a. Income categories are defined by ranking all people by their comprehensive household income adjusted for household size--that is, divided by the square root of the household's size. Quintiles, or fifths, of the income distribution contain equal numbers of people.

 

You may adjust as you see fit.

35 posted on 11/21/2002 8:56:55 AM PST by ancient_geezer
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To: The Raven
Something about two wolves and a sheep deciding what's for dinner. :)
36 posted on 12/04/2002 8:13:39 AM PST by anymouse
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To: The Raven
Athread with a discussion on the corporate income tax.
37 posted on 12/04/2002 8:40:48 AM PST by The Old Hoosier
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To: The Raven
"The most recent data from the IRS, in 2000, show that the top 5% coughed up more than half of total tax revenue. Specifically, we are talking about folks with adjusted gross incomes of $128,336 and higher being responsible for 56% of the tax take."

Are you meaning the same top 5% that owns 90% of the wealth in this country? 56%/90%=62.22%. That means that the top 5% are only paying 62% of what the average American pays as a fraction of income; the rich are 38% undertaxed *by your own figures*. The American system is regressive, not progressive. The top 5% vote for lower taxes for themselves, for the exact same reasons as you claim that the lower income brackets would vote for higher taxes for other people-- to make the middle class pay for the rich, as they already do.
38 posted on 12/04/2002 4:37:18 PM PST by guywithnoshoes
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To: ancient_geezer
" If we're to have an income tax, it's a good thing for everyone to pay at least a nominal amount," he said. "If non-taxpayers become a majority in society, what would restrain them from voting for ever higher taxes on others?" "

NOTHING. (in fact they are doing that now)

39 posted on 12/04/2002 5:06:47 PM PST by Republic of Texas
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To: guywithnoshoes
First, Mr. Socialist (Socialism Always Fails. tm), where do you get this 90% statistic? The 56% statistic is from the IRS, year 2000. Where is YOUR number from?

Second, Wealth is not the same as income, so they cannot, logically be compared. Wealth is your net worth, most of which you have ALREADY paid taxes on. Income is what you made this year.

I know that socialists must avoid logic at all costs, lest their house of cards collapse, so I expect your retort to contain some name calling and no facts. That's ok, I don't get mad when my 4 yr old neice throws a fit either, it's just the way 4 yr olds are.

40 posted on 12/04/2002 5:15:27 PM PST by Republic of Texas
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To: guywithnoshoes
I'm not sure what you said. But nobody should care what others earn. And income should not be taxed.
41 posted on 12/04/2002 5:16:04 PM PST by The Raven
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To: guywithnoshoes
BTW, even a socialist should know that 5% of a population cannot vote themselves anything. The OTHER 95% might have something to say about that.
42 posted on 12/04/2002 5:17:32 PM PST by Republic of Texas
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To: The Raven
Don't worry, he's not sure what he said either.
43 posted on 12/04/2002 5:18:20 PM PST by Republic of Texas
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To: Republic of Texas
Yeah he is -- whatever Marxine Waters/Jerry Waddler/ Swimming Coach Kennedy and the other Congressional Marxists have told him to believe.
44 posted on 12/04/2002 5:37:03 PM PST by Morgan's Raider
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To: guywithnoshoes
"Are you meaning the same top 5% that owns 90% of the wealth in this country? 56%/90%=62.22%. That means that the top 5% are only paying 62% of what the average American pays as a fraction of income; the rich are 38% undertaxed *by your own figures*. The American system is regressive, not progressive."

You're mixing your apples with your oranges. Income tax is calculated against income, not wealth. Either you honestly didn't understand that you were erroneously interjecting wealth into a formula where it doesn't apply (only income does) or you are purposely trying to mislead people. Which is it?

45 posted on 12/04/2002 5:47:43 PM PST by constable tom
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To: The Raven
Steve Forbes was onto something with the flat tax. It's far from perfect, but it's understandable, hard to demagogue against, and a lot of people who otherwise pay little attention to politics would have supported it. It would be a big step in the right direction.

I used to love NRST, but I've come to the conclusion that it can never be implemented without repeal of the Sixteenth Amendment.

46 posted on 12/04/2002 5:48:45 PM PST by Mr. Jeeves
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To: Mr. Jeeves
Hmmm! What makes you believe there will be no National Sale Tax with the Flat Income + VAT proposals?

Remember the little controversy concerning taxes on internet sales? It's still going on with states moving towards implementing them with the aid of the federal government to clear the way.

Whether we like it or not, there will be some form of federal sales tax ultimately. The only say we will have in the matter is wherther or not we will get rid of income & corporate taxes first.

The issue of the 16th amendment is totally bogus in respect to getting rid of the income tax. The 16th will not be repealed until after the income tax is removed from the statutes and is no longer seen as a politically viable method of taxation.
47 posted on 12/04/2002 6:59:58 PM PST by ancient_geezer
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To: Republic of Texas
>>Don't worry, he's not sure what he said either.



LOL !!!
48 posted on 12/05/2002 1:34:19 AM PST by The Raven
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To: Deuce
Therefore, this article, which claims the top 1/2 of 1% pay $877B

It doesn't say that. Your reading of the article is just more shoddy than the math you attribute to the author.... What it sez is:Simply put, a tiny group of people (553,380) were responsible for more than one-quarter of the income tax take of $877 billion. which if you do the math....877/4=219.25

49 posted on 12/05/2002 5:46:37 AM PST by hobbes1
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To: The Raven
This is the flaw with progressive tax system. I'm sorry but it's just not right to divide the nation into taxpayers and non-taxpayers. It essentially creates two different classes of citizens, and the non-taxpaying class will always vote to increase the tax burden on others. If we had a fair media, they would constantly be harping on this, because this is the real fairness issue with taxes and it constitutes a real threat to our system of government.
50 posted on 12/05/2002 5:54:22 AM PST by Godel
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