Taxation

[DeletedUser]

Define crap.

easy one wasn't it about 2 years ago our Senators (something you may or may not have heard of) bought 2 private Jets for themselves to take them to/from Social events. using taxpayer money to boot.

I would define that as crap spending.

 

[DeletedUser]

easy one wasn't it about 2 years ago our Senators (something you may or may not have heard of) bought 2 private Jets for themselves to take them to/from Social events. using taxpayer money to boot.

I would define that as crap spending.

Why would you define it as crap spending?
...and how by the way you guys have picked your words thus far it sounds like they guzzle money towards crap all the time.

That's one incident that may or may not be wasteful spending.

 

[DeletedUser]

Why would you define it as crap spending?
...and how by the way you guys have picked your words thus far it sounds like they guzzle money towards crap all the time.

That's one incident that may or may not be wasteful spending.

have you heard of "commercial airlines"? Do you think everyone in America owns a private Jet for themselves? If you do then you are one naive person.

And our country does "guzzle money towards crap all the time"

 

[DeletedUser]

have you heard of "commercial airlines"? Do you think everyone in America owns a private Jet for themselves? If you do then you are one naive person.

Indeed I have.
Ever heard of "time is money"?
When using commercial airlines you are at the mercy of their schedueles and incidents beyond your control. I imagine using a private jet will free up time.
Time which may be spent working for you, the people.

Don't let us forget that this also allows them to work and discuss freely as well,
whereas traveling with a commercial airline would not provide the necessary discretion
provided by a private jet.

And our country does "guzzle money towards crap all the time"

Present some facts.

 

[Diggo11]

easy one wasn't it about 2 years ago our Senators (something you may or may not have heard of) bought 2 private Jets for themselves to take them to/from Social events. using taxpayer money to boot.

I would define that as crap spending.

I would define that as crap voters...

 

[DeletedUser]

I agree with Diggo's comment. I'm not going to criticize our congressmen on their benefits; reason being, compaired to the trillion Obama has added to our spending, that's chump change.

All of the bail-outs (including George Bush Jr.'s) were crap spending. The SS is going bankrupt because of crap spending. Earmarks are crap spending. The new conservative Congress is going to outlaw earmarks: that's one new good step.

 

[DeletedUser22575]

I agree with Diggo's comment. I'm not going to criticize our congressmen on their benefits; reason being, compaired to the trillion Obama has added to our spending, that's chump change.

All of the bail-outs (including George Bush Jr.'s) were crap spending. The SS is going bankrupt because of crap spending. Earmarks are crap spending. The new conservative Congress is going to outlaw earmarks: that's one new good step.

The new conservative congress is not going to accomplish much of anything expect posture and position themselves for the 2012 election.

 

[DeletedUser]

The tax system explained in beer


Suppose that every day, ten men go out for beer and the bill for all ten comes to $100...

If they paid their bill the way we pay our taxes, it would go something like this...

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7..
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do..

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20". Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?


They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

"I only got a dollar out of the $20 saving," declared the sixth man. He pointed to the tenth man,"but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair that he got ten times more benefit than me!"

"That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.

 

[DeletedUser]

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100...

If they paid their bill the way we pay our taxes, it would go something like this...

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7..
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do..

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20". Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?


They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

"I only got a dollar out of the $20 saving," declared the sixth man. He pointed to the tenth man,"but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair that he got ten times more benefit than me!"

"That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.

if you don't understand that ten you know nothing about how taxes work but I like this version so much better because it is so much more accurate.

If you have the drive, here's a yarn for you to ponder called "Bar Stool Economics":

Suppose that every day, ten men go out for beer and the bill for all ten
comes to $100. If they paid their bill the way we pay our taxes, it would
go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the
arrangement, until one day, the owner threw them a curve. 'Since you are
all such good customers,' he said, 'I'm going to reduce the cost of
your daily beer by $20.' Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the
first four men were unaffected. They would still drink for free.

But what about the other six men - the paying customers? How could they
divide the $20 windfall so that everyone would get his 'fair share?'

They realized that $20 divided by six is $3.33. But if they subtracted
that from everybody's share, then the fifth man and the sixth man would each
end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's
bill by roughly the same amount, and he proceeded to work out the amounts each
should pay.

And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to
drink for free. But once outside the restaurant, the men began to compare
their savings.

'I only got a dollar out of the $20,'declared the sixth man. He pointed
to the tenth man,' but he got $10!'

'Yeah, that's right,' exclaimed the fifth man. 'I only saved a
dollar, too. It's unfair that he got ten times more than I got' 'That's
true!!' shouted the seventh man. 'Why should he get $10 back when I got only two?
The wealthy get all the breaks!'

'Wait a minute,' yelled the first four men in unison. 'We
didn't get anything at all. The system exploits the poor!'

Just then, the new, young Bartender strolled up, and exclaimed
“You know, guys, you’re absolutely right! I can help you out… Yes I can!”
And with a smile, explained how his great plan can bring them the change they need.

The new bartender assured them that, even though the bar is losing money fast,
and the new leather barstools, signs and beer supply haven’t been totally paid for yet,
their bar bill will remain at $80.

Since the seventh, eighth, ninth and tenth men are now considered rich,
(after all, they’ve been selfishly enjoying most of that $20 savings anyway!),
their portion of the bill will return to what they were charged before…
“perhaps even higher” he added, “its only fair. However,”
he added, “if they promise to only order my special brew – Universal Lite Green Beer –
they may get special rebate coupons for bar tab discounts next year!” he proclaimed.
“My plan will provide an additional $20 in revenue! This will give the first four, and the fifth man much needed “Beer Relief”.

“Halleluiah!!” the 5 men rejoiced in unison.

And so it was:
The fifth man, like the first four, still paid nothing (100% savings), AND each received $4.00.
The sixth now paid $4 instead of $3 (Well, we needed to do that to help the fifth man).
The seventh now paid $7 instead of $5.
The eighth now paid $12 instead of $9.
The ninth now paid $18 instead of $14.
The tenth now paid $59 instead of $49.

“See, when you spread the wealth around, its good for everybody,” explained the new bartender.

The next night the tenth man didn't show up for drinks so the nine sat down and had beers without him. Since there would now be a shortfall, the bartender adjusted the tabs for the sixth, seventh, eighth and ninth men, and eventually, had to ask the fifth man to contribute too.

Gradually, the men paying the tab could not afford the increased price of beer and one by one stopped going to the bar.

Finally, only the first four men showed up at the bar.

They were shocked to find the bar closed, the doors locked and a sign over the door read ‘Under new Management - “Mao’s Dragon Buffet”.

“Greetings. May I help you?” asked the new owner.

 

[DeletedUser]

Nice story Doc - I enjoyed it as a parable, but like most of these things, if you get off the hillbilly-level of thinking it breaks down quite quickly. Macro-economic reality is not as simple as splitting a drinking-tab.

To take just one instance - it pays no attention to where this money comes from. Did it grow on a tree?
So the guy with the big tax burden splits? Now someone else takes his job - maybe one of the guys who didn't have one before, but more likely the 2nd biggest payer and everyone moves up a step. Now there's the same amount of money but only 9 beers to buy instead of 10 and everyone is better (or at least, no worse) off.

Most wealthy folks rely on the tax-provided infrastructure of roads, public transport, airports, social welfare, health regulations, education facilities, police and judiciary etc. to provide them with a means of making a living - not many companies can exist without a helathy and mobile workforce (and protection from the Mafia!) for example.
Maybe a few sportspeople/musicians/internet entrepreneurs or others who are essentially lone traders could relocate and generate their income from a low-tax environment, but tenure at an African university or becoming a soccer-player in Russia would not suit everybody.
You would think that Westerners would be flooding the developing world to escape their tax bills, but in fact trans-national migration is overwhelmingly in the opposite direction.
The interesting point of debate is whether successful economies tend to have high-taxation regimes because they can afford the luxury, or whether government spending is an essential pre-condition to long-term growth (chicken or egg?) and where the point of balance lies. I strongly suspect this argument won't be settled or even clarified by hokey little anecdotes.

 

[DeletedUser]

The guy with the big tax burden is the business owner. He employs the other men paying for the drinks. After he leaves to China or wherever else the business climate is favorable, the un-employed are still left at the bar. The four not paying are those welfare cases that are always clamoring for more benefits.

All folks rely on the infrastructure... and re-distribution of any wealth will make everyone poorer. I would gladly give the wealthy a tax break and get more jobs and services, than give the poor a week long party.

 

[DeletedUser]

Oh what a bunch of crock.

 

[DeletedUser3543]

To be fair, it's not a bunch of crock.

The Doc has pretty much summed up the entire UK economy in a few short sentences

 

[DeletedUser]

To be fair, it's a gross misrepresentation of just how the system works. It's a distorted picture, presented by people who have been sold the erroneous notion that the rich provide opportunities for the poor, and therefore we should allow the rich to be richer, so they will provide more opportunities for the poor. This perception is simply flat dead wrong.

 

[DeletedUser]

No matter how much money is pumped into the welfare system, we will always have poor people. if you put some of them to work, at least you lessen the tax burden. I have never heard of a poor person creating jobs, but the wealthy are always investing to avoid taxes.

 

[DeletedUser16008]

To be fair you cannot have a system where more is continuously paid out than is paid in end of story...As for our welfare system in the UK etc re taxes its been over balanced like this for years, plenty comes in but goes out the wrong doors when spent. We dont have any production or resources to speak of and are pretty much left with a service industry, in a nutshell the UK is toast in the longrun, thats why we acquired an empire in the firstplace.Eventually it'll end up where it was before the expansion...just another average economy which imo is no bad thing..

Taxes are based on a money system & fiat money is as it stands flawed & unsustainable. A few years and we think we have it all sorted, how foolish. In the future it will be looked back on. It will be examined and concluded that as with all other fiat systems it became terminally sick and self imploding. Only this time it was on a truly global scale whilst humanity went through ( i hope ) a temporary insanity of decadence, denial and blinded waste of that which is finite on this ball of wax...

Look at the insanity of the money industry and greed for never ending profit. Economists, bankers & traders etc make more than most industry's in salary yet they are actually useless, they dont make anything they dont provide anything they have no real value apart to make more of something that dosnt really exist out of nothing in the first place. And so are taxes.

It is the ultimate king with no clothes story

We, meaning the generations of our fathers and our children will be judged by history as those who had the knowledge the intelligence the technology and the time to do something but do we have the will ? What will the verdict be ?

Off topic a bit it may be but its all tied to the same system .... money... as we currently understand and use it.You will not fix one aspect without scrapping the whole thing and therefore its unlikely to happen at all...

 

[DeletedUser]

No matter how much money is pumped into the welfare system, we will always have poor people. if you put some of them to work, at least you lessen the tax burden. I have never heard of a poor person creating jobs, but the wealthy are always investing to avoid taxes.

I truly despise simplistic examination of complex issues. It's typical political rhetoric. There's no evidence to support the crap you're spewing, merely propaganda (in the guise of evidence) generated by public relations firms posing as non-partisan think tanks, but there's ample evidence clearly demonstrating the fallacy of your assertions.

Addressing your last post, you are making a gross generalization about the welfare system. As well, the - tax burden - is not a tax burden, it is a percentage of income provided to the government so they can pay for things like - the military. You are pulling the age old argument that welfare is the tax burden, when the greater bulk of the tax burden is our overinflated military. Not only is it a burden on the end that it must be paid for, it's a burden in that it provides employment for so many people, paid for by the government. You wish to argue about "putting people to work" who are on the welfare system, well let me tell you -- who will provide the paychecks? The government? Great fix there. Why not put them in the military? *rolls eyes*

As to the wealthy, I have no personal gripes with those who are financially successful. What I have a gripe with is giving them tax breaks. The present mentality has only increased the disparity between the rich and the poor, and resulted in a larger percentage of poor. This is because the goal of those who have money, is not to give it away, it's to keep as much of it as possible.

Exactly how do you intend on addressing issues appropriately if you are not going to grasp the entire scope of the issues? The reality is that slavery has not been abolished, it has merely been outsourced. You see, higher profits results in more investors, which allows them to continue to develop their overseas exploitation industry whilst playing politics over here to cut back on the taxes. The majority of major companies have their research and corporate offices here, whilst having their production in India, China, Mexico, Taiwan, Philippines, etc. Anywhere that the citizenry can be exploited, is a great place for all that manual labor at a dollar a day (and less). Reducing their taxes isn't going to change that, and it certainly won't reverse the trend, nor will it provide more jobs.

The economic model, followed by the vast majority of corporations (and, of course those wealthy enough to either invest in or run said corporations), is always have more profit, greater profit, each and every quarter, each and every year. To do this, they have to squeeze the rock, which means reducing manpower, cutting paychecks and benefits, producing by exploitation of people in this and other countries.

Those who do "big" business are not hampered by morals, they're focused on the bottom line. And while it costs 3.2 billion dollars a year for their lobbyists to serve their greater interests, it's a drop in the bucket when compared to the amount of profits they get when they don't have to pay taxes.
Your assumption as to how tax breaks are utilized is simply wrong. In fact, it's the line and sell that is pushed by the lobbyists, to the politicians, who then try to sell you the lie (why? So that these politicians can keep their job by getting donations to their campaign and or be guaranteed a job should they lose the next election. It's a run, and it's been going on for decades), the lie that is a spin-off from the military industrial complex birthed in the 40s, now running rampant in just about every industry. Hands in the pie, hands in the politics, and hands in your pants.

Damn dirty hands if you ask me.


edit: I wish to assert, my particular argument does not address taxation as a whole, only the foolish notion that the wealthy should be exclusively exempt, or provided breaks, from taxation.

 

[DeletedUser]

About 47 percent will pay no federal income taxes at all for 2010. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization. How would a tax reduction help them? These are the lower income families. You know the ones that don't provide any jobs..
The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

The lion's share of the tax burden comes from the top 10% of income earners, they account for 70% of the tax revenue..just like in the story.. the lower income people whine and moan about fairness, when in reality, they are getting more than they contribute.

 

[DeletedUser]

About 47 percent will pay no federal income taxes at all for 2010. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization. How would a tax reduction help them? These are the lower income families. You know the ones that don't provide any jobs..
The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

The lion's share of the tax burden comes from the top 10% of income earners, they account for 70% of the tax revenue..just like in the story.. the lower income people whine and moan about fairness, when in reality, they are getting more than they contribute.

lol, I love it. You didn't provide the source, but that comes right out of Heritage Foundation, a Republican/Corporate public relations firm posing as a non-profit think tank (see my first paragraph above). Your argument is a gross misrepresentation, because it is not an issue of who pays taxes and who doesn't.

Let's just start out with charts from their very own site (i.e., using your source):

Source: heritage.org/budgetchartbook/top10-percent-income-earners

Source: heritage.org/budgetchartbook/top10-percent-income-earners

This, is a glaring example that the rich are getting richer, whilst the poor are getting poorer. It is statistically irrefutable. Taxation for the wealthy has decreased, and yet they are still providing the bulk of tax revenue. Just look at those numbers. The top 1% ($410,096+ earned income)* are providing 40% of all tax revenue. The top 5% ($160,041+ earned income)* are providing 60% of all tax revenue. Despite the "breaks" they presently have, they are still paying the bulk. This is because they make so much damn money, not because they are being overtaxed. Truth is, they're being undertaxed.

As to the 50% of folks providing only 2.89% of tax revenue, it is because they make so little damn money ($0 to $32,878 earned income)*. And yes, if you are making less than 7,000 a year of income, you don't pay taxes. Let's face it, even if you were to tax them, the amount of revenue generated would be chicken feed, grossly insubstantial and simply not impacting of what you call the - tax burden -. Here's the logic: Those making less than 7,000 a year are grossly under the cost of living, and therefore to tax them would spark survival mode, which will result in more crimes committed on the mere basis of needing to feed themselves and/or their children (at the very least, it would result in more people needing to rely on welfare programs, costing the tax payers even more). As it is, people are working under the table to avoid taxation (and yes, the rich do it too, so let's not go there) in order to survive through the increased cost of living that has struck the U.S. since Bush Jr's reign of economic terror.

Source: heritage.org/budgetchartbook/top10-percent-income-earners

Finally, I want you to take a very sharp look at those numbers in the core chart. A soon as Bush Jr. walked into office, he started working with Congress to institute tax breaks for the wealthy (which are, unfortunately still in effect due to Obama's "compromise," man he pissed me off). This chart demonstrates the impact of tax breaks on the wealthy, wherein they ended up paying less to IRS. But notice how it had the exact opposite effect on bottom 50%?!? They went from 3.91% prior to the tax breaks, down to 3.5% a year after the tax breaks. I.e., the poor got dramatically poorer. History clearly demonstrates that the wealthy did not "reinvest" those dollars back into the economy, they hoarded it or took it overseas.

And the exact same thing happened with Reagan's tax breaks for the wealthy. A history of examples that tax breaks simply do not work as you think they do (surprisingly, if you look at the early years, you'll see that Carter's economic stimulus packages actually seemed to work for everyone, which goes in contra to just about everything you're arguing and just about every argument posed by the Republican Party).


* Based on 2007 estimates. which is something else I wanted to point out. You're relying on 5 year old information. The numbers are substantially worse now, with the rich being far richer, the poor continuing to be far poorer. Of course, it doesn't help Heritage's arguments to include the last 5 years, as it demonstrates amply the gross failure of the economic system under Bush Jr's administration, particularly when you consider the rich are still getting those tax breaks.

 

[DeletedUser]

You seem to be more interested in class war than tax structure. I see you are a left-over Bush basher. He isn't president anymore. We have had 2 years of new blood, time will tell and judge the outcome. I have been through this with Nixon, Carter, Regan, Bush Sr. Clinton, and Bush Jr.
Presidents come and go but the dirty little secret is Congress spends the money, and that my friend has been where the problem lies.
I know however, that socialism and sharing the wealth go hand in hand.