3 Inconvenient Truths About Taxes

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Interesting comment by Howard, who thinks taxpayers should pay taxes equal to the "percentage of total income they garnered."
Apparently, Howard does not realize that this would result in a huge tax DECREASE to the wealthy.
Those top people who earn 50% of all income are already paying 70% of the taxes collected, and the top 1% who earn 13.4% of all income pay 22.3% of all taxes - not quite double the proportion of the income they "garnered."

Guglielmo of PA 10:20AM November 08, 2012

Some of the comments posted suggest that it is unfair that the top earners pay over 50% of the taxes. I would suggest that they should pay an equal percentage of tax to the percentage of total income they garnered. I.E. if that group earned 98% of the income wealth, they should pay 98% of the necessary taxes required for that year.
Do not forget that they exploited the systems in place to garner the wealth through avoidance of payment of their taxes. That exploitation should not be rewarded. The tax system should be fixed to eliminate the loopholes that allowed the explosion of the wealth in the top percentage through false derivatives that were never allowed before the dissolution of Glass Steigle.

Howard of DC 11:16PM May 04, 2012

"The 'right' level of taxation", is not as important as the right balance of taxes. Please consider the 2-4-8 Tax Blend - a comprehensive tax reform for both individuals and business that can be defined in one sentence:
Tax individual and corporate income at a flat 8% rate (with no deductions, credits or loopholes), tax individual net wealth at 2% (excluding $15,000 cash and retirement funds) and impose a 4% Value Added Sales Tax (VAT) on business.
For business the combined 8% income rates and 4% VAT would be the lowest and most competitive business taxes of all the developed countries. [The U.S. is the only developed country without a VAT]. The 8% income tax rate also resolves the significant problem in the deferral of taxes on foreign profits caused by imposing a 35% tax (less credit for foreign taxes paid) when the money is brought back into the U.S.
For investors, the net wealth tax might seem revolutionary by U.S. standards, but most high earners would willingly pay a 2% net wealth tax in exchange for eliminating the capital gains and estate taxes and keeping 92% of taxable earnings. The ability to buy and sell assets without being taxed on the gains would spur a new era of investment freedom. The increased after tax income would also create wealth much faster than a 2% net wealth tax could diminish it.
For workers, the elimination of the payroll tax and reduction of the income tax rate creates an immediate boost in take home pay. For example, a young family earning $70,000 currently pays combined federal taxes of 19% but would take home $7,700 more with an 8% income tax (assuming net wealth of under $30,000). This additional $641 per month represents an enormous opportunity for both savings and consumption. The $15,000 per person cash wealth tax exemption also encourages a responsible level of liquidity. The retention of tax exempt retirement savings programs recognizes the need for the elderly to have sufficient assets to supplement social security. Current interest tax deductions for mortgages and student loans are replaced by the ability to deduct the loan principal in computing net wealth. This is the equivalent of a 2% reduction in the interest rate and is arguably a better incentive for both home ownership and higher education.
Eugene Patrick Devany, JD, MPA
www.TaxNetWealth.com

Eugene Patrick Devany of NY 10:41PM May 02, 2012

Cut spending.
Reverse fiat (vaporware) money.
Get the government out of bed with corporations.
Get the government off the backs of corporations.
In other words: unleash true capitalism.
Prosperity comes from production, saving and investment. No one will produce if paid to not; no one will save if the government dilutes the currency; no one will invest if profit is targeted for confiscation.

John Donohue of CA 3:25PM May 02, 2012

Of the federal revenue stream from taxes, who pays what? 50% of all taxes collected come from the top 3% of taxpayers. I would say they are doing more than their fair share. The poor pay nothing and the middle class don't even cover their own costs.

EWT of WI 3:15PM May 02, 2012

Eric, I understand protecting our own country, but why must we pay to defend the rest of the world? Can't they protect themselves? I was going to go into a more in depth rebuttal for your other "points," but noticed the lame "skin in game" rant. At which point I decided not to waste any more time on a nitwit.

Steve of CO 3:09PM May 02, 2012

Earnest, I bet you're wrong.

Steve of CO 3:01PM May 02, 2012

"When all federal, state, and local taxes are taken into account, the bottom fifth of households pays about 16 percent of their incomes in taxes, on average," the report said. "The second poorest fifth pays about 21 percent."
I bet these figures pale in comparison to what the richest Americans pay when you take into account all of these taxes.

Earnest of UT 1:56PM May 02, 2012

1) Social Security isn't really a tax. It's a more of a crappy forced annuity where a low rate of return is paid at retirement age. Forced payers get a return on an investment. So it's not a tax. Same deal with Medicare.
2) Sales tax, state taxes, local taxes, and all non-federal taxes don't equal skin in the game. Because the game we're talking about is the United States of America game. Not the state and local game.
3) Folks who pay no federal taxes are really getting their freedom for free. They make no contribution to provide for the strong national defense of the USA. And it's a strong national defense that provides the freedom from coercion each American enjoys.

Eric of PA 1:05PM May 02, 2012