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On October 17 2011 00:02 ScrubS wrote:
My father pays almost 40% of his income to the government in taxes. I think that americans finally are paying normal taxes rather than high taxes (for their standards).
If you combine all of America's various taxes, on average it's the second highest taxed country in the world, behind Japan, it just hides it better. Most other countries have a very high income tax rate, however the U.S. also has property taxes, sales taxes, state income taxes, social security, etc etc etc.
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On October 17 2011 01:40 hoganftw wrote:
The real problem is that we spend so much money on other countries that there's no way we can possibly make up our debt, regardless of huge tax increases. When you have bases in 130 countries and a perpetual war on terror, there's nothing you can really do about it besides significantly cut spending. After that, we can focus on increasing taxes and working on our debt from there.
If by spending money on other countries you mean blowing them up in order to secure natural resources........ i agree there should be less of that.
User was warned for this post
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On October 17 2011 01:58 TangJuice wrote:Show nested quote +On October 17 2011 01:40 hoganftw wrote:
The real problem is that we spend so much money on other countries that there's no way we can possibly make up our debt, regardless of huge tax increases. When you have bases in 130 countries and a perpetual war on terror, there's nothing you can really do about it besides significantly cut spending. After that, we can focus on increasing taxes and working on our debt from there. If by spending money on other countries you mean blowing them up in order to secure natural resources........ i agree there should be less of that.
You mean the United States shouldn't spend more than every other country on Earth combined on the military?
You must be a Loyalist Rebel Imperialist Facist Communist Jihadist!
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On October 17 2011 01:31 jdseemoreglass wrote:
When 47% of the nation doesn't pay federal income taxes, you absolutely need to increase taxes on the lower 50%. We simply can't have half of the nation making financial decisions they are exempt from. So long as each person receives one vote, we should all be partly accountable for the policies we democratically enact. Otherwise you have huge issues with moral hazard which will continue to send us in the direction of Greece.
Why is it, when people say "Half of the country doesn't pay taxes" they point their finger at the lower 50% of earners?
Take a look.
![[image loading]](http://1.bp.blogspot.com/-oHCcm9FfPNo/TWea09x5dPI/AAAAAAAAVP0/2gOvwcnz-jw/s1600/MINT-TAXES-R4.png)
The greyed out part is the fraction of people that don't pay any taxes.
I can't believe that people would think that taxing the crap out of someone making under $10,000 a year makes more sense that removing loopholes that stops people making into the millions, from paying taxes. Doing so would make a MUCH bigger dent in that pie chart.
Did we just forget that our economy REQUIRES people, particularly at the bottom, to consume goods and products? How much do you think they're going to be consuming if you take away any and all of their disposable income in taxes? The economy will come to a complete standstill.
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Here's a really good write up about the 9-9-9 plan by Jesse Taylor over at pandagon.
So, a brief thought I had about Herman Cain's 9-9-9 plan today: it sucks. Pretty much everyone with a brain thinks that it sucks. But I think I came up with a way that it sucks even more than it was previously thought to suck. Walk with me, will you?
The 9-9-9 plan consists of three taxes: a nine percent income tax, a nine percent sales tax, and a nine percent "business tax". The business tax is a receipts tax rather than a profits tax (as the current corporate income tax is). What this means is that you don't get to deduct anything except "investments, all purchases from other businesses and all dividends paid to shareholders." In other words, you're now taxed nine percent on all wages and salaries paid to employees.
Under the current system, an employee whose pre-tax salary is $50,000 actually costs an employer $53,825 once FICA taxes are added. (For the purposes of this post, all we're concerned about is the employee's pre-tax salary and the employer FICA contribution.) This is because the employee pays 7.65% of their income in FICA taxes, and the employer matches with another 7.65% contribution. The 9-9-9 plan would do away with FICA taxes, and one of Cain's promises is that your employer will pay you that 7.65%. He claims to have worked in private industry before, but that statement makes me doubt this claim.
Anyway, there's no FICA tax under the 9-9-9 plan...but there is a business tax. And the money used to pay your $50,000 salary is subject to a 9% tax. That means the cost of paying you is actually $54,500. Using powers of math, the cost of employing you is $675 higher under 9-9-9.
Amazingly, the problem gets worse the more you're paid. FICA tax is not assessed on wages over $106,800. For someone paid $250,000 a year, the total employer-side FICA charged is $8,170.20, for an effective employer rate of 3.26% and a total cost of $258,170.20. Under 9-9-9? Your employer would pay $22,500 in taxes on your salary for a total cost of $272,500.**
Not only do poor people get a drastic tax increase, but every single person in America would instantaneously become more expensive to employ!
TL;DR: Vast majority of people would end up paying *more* in taxes, AND it would cost businesses more to employ Americans.
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most of you people need a lesson on what is your marginal tax rate and what is your 'average' tax rate.
just because you are in the 25% or 30% bracket certainly does not mean you pay 25% or 30% on your 'total income'. the fact any of you so called 'taxpayers' would assume that shows that you're either lying about your income or you've never taken one look at a 1040.
-the system is progressive, meaning your income is taxed at different rates as it exceeds the brackets ranges (1st x dollars is taxed at x %, go look at a tax schedule for the exact amounts)
-you have plenty of deductions and credits that reduce your taxable income
-there's plenty of non-taxable or special tax rates for different kinds of income
so, if you're in the 25% bracket, you aren't paying 25% to the federal government. its lower, most likely in the teens. if you don't believe me, take a look at your the tax you owe on your most recent 1040 and divide it by your total income (i forget the line numbers). you'll be amazed
this only addresses one part of cain's 9-9-9 but it appears people are most confused over it.
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On October 17 2011 02:02 BronzeKnee wrote:Show nested quote +On October 17 2011 01:58 TangJuice wrote:On October 17 2011 01:40 hoganftw wrote:
The real problem is that we spend so much money on other countries that there's no way we can possibly make up our debt, regardless of huge tax increases. When you have bases in 130 countries and a perpetual war on terror, there's nothing you can really do about it besides significantly cut spending. After that, we can focus on increasing taxes and working on our debt from there. If by spending money on other countries you mean blowing them up in order to secure natural resources........ i agree there should be less of that. You mean the United States shouldn't spend more than every other country on Earth combined on the military? You must be a Loyalist Rebel Imperialist Facist Communist Jihadist!
FOR ALLAH?!
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On October 17 2011 01:57 Redlol wrote:Show nested quote +On October 17 2011 00:02 ScrubS wrote:
My father pays almost 40% of his income to the government in taxes. I think that americans finally are paying normal taxes rather than high taxes (for their standards). If you combine all of America's various taxes, on average it's the second highest taxed country in the world, behind Japan, it just hides it better. Most other countries have a very high income tax rate, however the U.S. also has property taxes, sales taxes, state income taxes, social security, etc etc etc.
Source? I find that rather hard to believe.
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On October 17 2011 02:05 Steveh wrote:
most of you people need a lesson on what is your marginal tax rate and what is your 'average' tax rate.
just because you are in the 25% or 30% bracket certainly does not mean you pay 25% or 30% on your 'total income'. the fact any of you so called 'taxpayers' would assume that shows that you're either lying about your income or you've never taken one look at a 1040.
-the system is progressive, meaning your income is taxed at different rates as it exceeds the brackets ranges (1st x dollars is taxed at x %, go look at a tax schedule for the exact amounts)
-you have plenty of deductions and credits that reduce your taxable income
-there's plenty of non-taxable or special tax rates for different kinds of income
so, if you're in the 25% bracket, you aren't paying 25% to the federal government. its lower, most likely in the teens. if you don't believe me, take a look at your the tax you owe on your most recent 1040 and divide it by your total income (i forget the line numbers). you'll be amazed
Which is how I got to 11% despite making a lot of money. But Cain takes away all those deductions, credits and exemptions so I would pay 9% with his plan, as well as paying 9% more for everything I buy.
Bad deal for most Americans.
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On October 17 2011 02:05 Steveh wrote:
most of you people need a lesson on what is your marginal tax rate and what is your 'average' tax rate.
just because you are in the 25% or 30% bracket certainly does not mean you pay 25% or 30% on your 'total income'. the fact any of you so called 'taxpayers' would assume that shows that you're either lying about your income or you've never taken one look at a 1040.
-the system is progressive, meaning your income is taxed at different rates as it exceeds the brackets ranges (1st x dollars is taxed at x %, go look at a tax schedule for the exact amounts)
-you have plenty of deductions and credits that reduce your taxable income
-there's plenty of non-taxable or special tax rates for different kinds of income
so, if you're in the 25% bracket, you aren't paying 25% to the federal government. its lower, most likely in the teens. if you don't believe me, take a look at your the tax you owe on your most recent 1040 and divide it by your total income (i forget the line numbers). you'll be amazed
this only addresses one part of cain's 9-9-9 but it appears people are most confused over it.
I agree, a lot of people seem to not understand marginal tax rates. If you're in a certain bracket, you only pay that percentage on income above the threshold for that bracket, not all your income.
One thing I'm curious about with Hermain Cain's plan is, does he specify whether basic necessities are exempt from the sales tax? In Canada, we have a national sales tax, but things like groceries and other necessities are exempt and have no sales tax.
I think overall the 9-9-9 plan was a pretty half baked plan that makes for a good sound byte. I don't think Hermain Cain seriously expected to do as well as he is, and thus to have so much scrutiny on his plan, and now it's sort of being exposed because there really aren't a whole lot of details about the plan. Even the CBO estimates about the plan are really just shots in the dark because the plan is just not fully fleshed out at all.
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On October 17 2011 00:02 Zealotdriver wrote:
LOL at anyone who thinks the 9-9-9 build could ever work. This crap is a distraction from real solutions to our economic crisis.
Not really. An overly complex tax code that promotes collusion and corruption between business and government is one of the main problems behind the crisis, along with individuals getting things they can't afford.
The plan itself may be be imperfect, but the principles of it are closer to meaningful reform than any other plans, which just tweak the status quo. You can't pour new wine into old bottles. Time to rewrite the tax code. We can give turbotax and other tax industries a 3-5 years head start to find new jobs and adapt.
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On October 17 2011 00:17 jdseemoreglass wrote:
You really need to contrast these kind of proposals with what we have currently. The 9-9-9 plan has plenty of flaws, of course. But every politician who doesn't have a reform proposal is basically advocating the following:
"My tax plan is to have a system of tax code that is tens of thousands of pages long and is so complicated that thousands of people will have to devote their entire education and career to studying it and figuring out how to work it. There will be countless provisions made for individual companies to create exceptions and special privileges, endless loopholes that can be exploited to reduce federal revenue, and hundreds of measures designed to benefit certain groups at the expense of others, based upon the fiat of politicians."
The system we have now is so stupid and nonsensical and inefficient and complicated that virtually any reform will be a step in the right direction. Don't get so caught up in the details of this specific plan, just recognize the NEED to establish a system that is simple, effective, and equitable.
Anyone who works a job pays taxes. In fact, payroll taxes fall disproportionately on the poor because they are capped at a certain income level. Also, most states have a sales tax, which takes more, as a percentage, out of a person's paycheck if they make less money. This idea that half the population doesn't pay taxes is obviously false and I really wish it wasn't thrown around everywhere.
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On October 17 2011 02:17 0neder wrote:Show nested quote +On October 17 2011 00:02 Zealotdriver wrote:
LOL at anyone who thinks the 9-9-9 build could ever work. This crap is a distraction from real solutions to our economic crisis. Not really. An overly complex tax code that promotes collusion and corruption between business and government is one of the main problems behind the crisis, along with individuals getting things they can't afford. The plan itself may be be imperfect, but the principles of it are closer to meaningful reform than any other plans, which just tweak the status quo. You can't pour new wine into old bottles. Time to rewrite the tax code. We can give turbotax and other tax industries a 3-5 years head start to find new jobs and adapt.
The plan isn't just imperfect, it is incredibly destructive to most Americans. If anything, compared to the 9-9-9 the complex tax code has proven to protect the little guy (like me).
However, a simple tax code is something we should be moving toward. There is no problem with increasing the tax percentage for individuals who make more money.
Don't want to be in a high tax bracket and pay a high percentage of your income to the government? Then go work at McDonald's and see how much better your life would be...
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my father pays about 30% of his income, he is a democrat, but he actually likes the 9/9/9. he says he's not going to even vote this year because he doesn't like any of the democratic candidates and in my state the primaries are closed party so he can't vote for a republican
On October 17 2011 01:31 jdseemoreglass wrote:
When 47% of the nation doesn't pay federal income taxes, you absolutely need to increase taxes on the lower 50%. We simply can't have half of the nation making financial decisions they are exempt from. So long as each person receives one vote, we should all be partly accountable for the policies we democratically enact. Otherwise you have huge issues with moral hazard which will continue to send us in the direction of Greece.
you realize they don't pay taxes because they're pretty much poor right?
tell me where you see the difference
Family A:
4 Kids, Husband, Wife. Makes $500,000/yr, pays $125,000 in taxes (just straight 25% lets say, if you're making 500k chances are you know some people and know how to hide shit better and pay less though, but for sake of the argument lets say you are actually signing away 125k).
Family B:
4 Kids, Husband, Wife. Makes $25k/yr, pays $6250 in taxes (thats 25% also). Do you see a problem with this? How are they going to afford food, pay the bills, etc etc? Family A is going to be able to pay all bills and provide food very easily for their family while having a lot of money left over for "wanted" goods, not "needed" goods.
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On October 17 2011 02:21 Silidons wrote:
my father pays about 30% of his income, he is a democrat, but he actually likes the 9/9/9. he says he's not going to even vote this year because he doesn't like any of the democratic candidates and in my state the primaries are closed party so he can't vote for a republican
Read:
On October 17 2011 02:05 Steveh wrote:
most of you people need a lesson on what is your marginal tax rate and what is your 'average' tax rate.
just because you are in the 25% or 30% bracket certainly does not mean you pay 25% or 30% on your 'total income'. the fact any of you so called 'taxpayers' would assume that shows that you're either lying about your income or you've never taken one look at a 1040.
-the system is progressive, meaning your income is taxed at different rates as it exceeds the brackets ranges (1st x dollars is taxed at x %, go look at a tax schedule for the exact amounts)
-you have plenty of deductions and credits that reduce your taxable income
-there's plenty of non-taxable or special tax rates for different kinds of income
so, if you're in the 25% bracket, you aren't paying 25% to the federal government. its lower, most likely in the teens. if you don't believe me, take a look at your the tax you owe on your most recent 1040 and divide it by your total income (i forget the line numbers). you'll be amazed
this only addresses one part of cain's 9-9-9 but it appears people are most confused over it.
9/9/9 would most likely increase how much your father pays.
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On October 17 2011 01:41 Penecks wrote:
Can someone explain how the poor cope with the high taxation of European countries? Some of the EU posters mention like 19% VAT or something like that. Is it due to all the assistance the govt can then give those poorer citizens that balances it? Not trolling I actually have no idea.
Generally the countries with national sales taxes have exemptions for basic necessities such as food.
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9-9-9 is awful for the exact reason listed in OP. Is tax law complicated? Yeah, in fact it's retarded at times. I spent all last night reading up on individual taxation and the stupid exclusions, deductions, etc. But all 9-9-9 would do is severely increase taxes for the poor and reduce them for the rich. There's a reason for all these deductions.
All of a sudden you have a huge medical bill you have to pay because of a terminal illness. Should you have to pay taxes on the income you received to pay off the medical bill? Congress says no. Should you have to pay income taxes on a scholarship you received for educational purposes? Current tax law says no. Why should you really. Should employees pay income tax for the child care services rendered by the employer, or health insurance, etc? Currently you can deduct this, thus it provides incentives for both employer and employee to engage in this, which is something beneficial for society (actually having decent child care).
I feel people not familiar with what deductions are don't even understand them and think it's the government paying you for doing something. Rather, it's just income you received from your employer that they don't force you to pay in taxes on.
If you're taxed at a 40% marginal rate after federal/state taxes, your employer can either offer you a $3,000 health care plan or give you an additional $3,000 salary. To the employer, it's identical results for them - they're paying $3,000. For you, if you take the salary, you have to buy the $3,000 plan yourself anyways. If you take the plan, you break even. But if you take the salary, you have to pay income tax of $1,200, and you only have $1,800 for the healthcare plan, so in the current state of things it's good to take a $3,000 pay cut and get healthcare.
Deductions/exemptions/etc. are there for good reason - to provide incentives for people to engage in certain acts. The 9-9-9 is awful and only hurts the poor.
On October 17 2011 02:05 Steveh wrote:
most of you people need a lesson on what is your marginal tax rate and what is your 'average' tax rate.
just because you are in the 25% or 30% bracket certainly does not mean you pay 25% or 30% on your 'total income'. the fact any of you so called 'taxpayers' would assume that shows that you're either lying about your income or you've never taken one look at a 1040.
-the system is progressive, meaning your income is taxed at different rates as it exceeds the brackets ranges (1st x dollars is taxed at x %, go look at a tax schedule for the exact amounts)
-you have plenty of deductions and credits that reduce your taxable income
-there's plenty of non-taxable or special tax rates for different kinds of income
so, if you're in the 25% bracket, you aren't paying 25% to the federal government. its lower, most likely in the teens. if you don't believe me, take a look at your the tax you owe on your most recent 1040 and divide it by your total income (i forget the line numbers). you'll be amazed
this only addresses one part of cain's 9-9-9 but it appears people are most confused over it.
I suggest you take a lesson in tax. Most people when they refer to income taxes paid refer to the overall amount, not what bracket they are in. So if you say "I paid 28% in income taxes last year" you are most likely in the 33% bracket. I'm not sure how you'd "be amazed" as this is a commonly understood fact about income taxes.
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On October 17 2011 02:23 BuddhaMonk wrote:Show nested quote +On October 17 2011 01:41 Penecks wrote:
Can someone explain how the poor cope with the high taxation of European countries? Some of the EU posters mention like 19% VAT or something like that. Is it due to all the assistance the govt can then give those poorer citizens that balances it? Not trolling I actually have no idea. Generally the countries with national sales taxes have exemptions for basic necessities such as food.
The 9-9-9 plan has no exemptions for food or medicine as stated in the OP just so people fully understand it.
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On October 17 2011 02:02 Bibdy wrote:
One of the problems in our country is that not every citizen is 'equally invested' in terms of voting. We need to promote more involvement in the public area. One way to do this is to give everyone a tax responsibility. One improvement to the tax code would be to make everyone pay something. Keep the tiers, but make the bottom tier pay 1%. This would promote active engagement in the political process rather than benefitting from tax money, wholly ignorant and unaffected by anything.
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On October 17 2011 02:23 BuddhaMonk wrote:Show nested quote +On October 17 2011 01:41 Penecks wrote:
Can someone explain how the poor cope with the high taxation of European countries? Some of the EU posters mention like 19% VAT or something like that. Is it due to all the assistance the govt can then give those poorer citizens that balances it? Not trolling I actually have no idea. Generally the countries with national sales taxes have exemptions for basic necessities such as food.
In Finland food is around 10%, other stuff 21%
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EPT
