Taxes...

[Okla-homey]

You prolly already did yours.

We always wait til the last minute. Because we always owe. Believe me, its no fun writing a five figure check to Uncle Sam, buts its better than giving the gubmint an interest-free loan that would result in a tax refund. It's actually the more rational thing to do, although it still sux monkey balls.

For the record, various research entities have determined that this year, approximately 50% of Americans, that's one out of two, will not pay a dime in Federal income taxes.

This time of year, I honestly wish only the people who are required to pay income tax could vote. :mad:

[SCOUT]

Dennis Prager spent some time last week talking about the fact that about 50% of the US public will not be paying any Federal income tax. He asked the question, would you join a club if 50% of the members paid no dues and decided what the other 50% had to pay? Would you feel that this arrangement was fair?

It was interesting to hear the responses from the various people who called in. I am curious what the sages on the south oval think.

[SoonerInKCMO]

Can one of y'all point me to the research that shows half the peeps don't pay income tax? I'm interested in reading about that... maybe they'll have some tips on how I can join that club. ;)

Hell, when I was a college student and making $7,000/yr working part time, I paid income taxes. I was doing something wrong. :(

Also, I have not yet done my taxes... knowing that I'll have to pay and that I have to file in three states has not been very motivating.

[Harry Beanbag]

It was interesting to hear the responses from the various people who called in. I am curious what the sages on the south oval think.


I think you already know what they are gonna say.

[JLEW1818]

"YES WE CAN"

[bluedogok]

You aren't the only one "paying taxes" if you have to write a check to gov't on April 15. Even if you get a refund you are "paying taxes" unless that refund eclipses the amount that you paid in. You also "paid taxes" with the FICA withheld because i think most of us know that we will never see that money in the future, so it is pretty much nothing more than another tax.

We try to get our withholding set up to where we get about 100-200 back and that's it, that isn't "giving" the gov't much of a no interest loan. We pay our property taxes out of pocket and that 3,500 a year bill (on a 140,000 house) is enough to save for in my mind. I did the quarterly payment thing when I was self-employed and that tax structure sucks and was a pain. It also seemed like whatever I paid in was never enough.

The way the "50%" don't pay taxes is though all of the low income credits and deductions like the Earned Income Credit. In fact most of them make money off income taxes because of all those credits.

BTW - I have to do ours this weekend as well.....

[Okla-homey]

When we lived in Montgomery, AL, we always got a kick out of all the brothers who bought new rims with their "earned income tax credit" and sisters who got new weaves with theirs.

BTW, who new "weaves" cost 300.00?:eek:

[yermom]

that's the cheap ones ;)

i know a guy that makes in the 60's and paid no taxes. i;m not really sure how it worked that way, but bought a house, so they were actually paying him

i guess i need to start having kids...

[Ike]

I was reading some thing somewhere that basically a family of 4 making 50 Gs will get away with paying no tax. Basically, it went something like this: 50,000 minus the standard deduction, plus the 4 personal deductions leaves them with a tax liability of ~2,800. 2 child tax credits of 1000 a piece takes it down to 800, and then theres a "making work pay" credit of 800, which actually zeros them out, or close to it.

Now, the only thing in there thats "new" there is the 800 dollar "making work pay" credit. So if one makes the assumption (and I'm making it simply because these are the only numbers I've been given) that the 50% of america not paying taxes are ALL in families of 4 making $50,000 for the year, that means that the federal government is losing out on about 30 billion dollars. With total tax revenues projected to be in the ballpark of 1.7 trillion (which is about half of total govt revenues), that would be about 2.5% of tax revenues, or about 1.1% of total revenues (assuming here revenue numbers near what they were for 2009 (http://en.wikipedia.org/wiki/2009_United_States_federal_budget).)

It should also be noted here that per-capita income in the US is between 46K and 47K. (since per-capita income is just roughly gdp/population, even children are assumed to be 'making' an income for this statistic...I think...I am not an economist). So under the assumptions I am making, (that every american not paying taxes is in a family of 4 making 50K), These people are still only making 25% of per-capita income in the US. (in reality it's probably less) 50% of our country controls less than 25% of GDP.*

What's the sadder fact? that 50% of our country doesn't pay income tax? or that 50% of the country controls less than 25% of GDP?

I should also note: These people are still paying taxes. Social security and medicare taxes (which are nearly as large, net, as income taxes) still get paid by this part of the population. Some fraction of everything they buy goes to paying corporate taxes, excise taxes, and/or customs duties/tariffs.
Not to mention sales taxes. I don't have data handy to do more calculations, but I would wager a beer that taken as a whole, this 50% of the population that doesn't pay income taxes actually winds up having a larger fraction of their income go to taxes than the other 50% of the population that do pay income taxes.


*these are only 'back of the envelope' calculations...I stand by them as only being in the ballpark of being correct.

[yermom]

but progressive taxes are socialism

[btk108]

I've written a check for the last 15 years....and will probably write one this year, too, Homey. Why give it early?

Going to the game Sat?

[jkjsooner]

My wife makes more than me and had about $5000 less taken out in taxes. My huge refund went to me owing something once I plugged in her numbers. Ugh!

We both make about equally and I've told her several times that if she doesn't adjust what she has taken out they'll never take out enough.

I like getting a refund. It's a good way to force you to save a little extra. It might not be the smartest thing financially but, let's be honest, the .5% interest or whatever you can get at a bank isn't really enough to make a difference anyway...

[1890MilesToNorman]

Stop bitching, when the King and his Congressional Jesters have all yer money you will be well taken care of. Only the King and his Jesters are allowed property and wealth.

Sheesh

[SCOUT]

I was reading some thing somewhere that basically a family of 4 making 50 Gs will get away with paying no tax. Basically, it went something like this: 50,000 minus the standard deduction, plus the 4 personal deductions leaves them with a tax liability of ~2,800. 2 child tax credits of 1000 a piece takes it down to 800, and then theres a "making work pay" credit of 800, which actually zeros them out, or close to it.

Now, the only thing in there thats "new" there is the 800 dollar "making work pay" credit. So if one makes the assumption (and I'm making it simply because these are the only numbers I've been given) that the 50% of america not paying taxes are ALL in families of 4 making $50,000 for the year, that means that the federal government is losing out on about 30 billion dollars. With total tax revenues projected to be in the ballpark of 1.7 trillion (which is about half of total govt revenues), that would be about 2.5% of tax revenues, or about 1.1% of total revenues (assuming here revenue numbers near what they were for 2009 (http://en.wikipedia.org/wiki/2009_United_States_federal_budget).)

It should also be noted here that per-capita income in the US is between 46K and 47K. (since per-capita income is just roughly gdp/population, even children are assumed to be 'making' an income for this statistic...I think...I am not an economist). So under the assumptions I am making, (that every american not paying taxes is in a family of 4 making 50K), These people are still only making 25% of per-capita income in the US. (in reality it's probably less) 50% of our country controls less than 25% of GDP.*

What's the sadder fact? that 50% of our country doesn't pay income tax? or that 50% of the country controls less than 25% of GDP?

I should also note: These people are still paying taxes. Social security and medicare taxes (which are nearly as large, net, as income taxes) still get paid by this part of the population. Some fraction of everything they buy goes to paying corporate taxes, excise taxes, and/or customs duties/tariffs.
Not to mention sales taxes. I don't have data handy to do more calculations, but I would wager a beer that taken as a whole, this 50% of the population that doesn't pay income taxes actually winds up having a larger fraction of their income go to taxes than the other 50% of the population that do pay income taxes.


*these are only 'back of the envelope' calculations...I stand by them as only being in the ballpark of being correct.
First, I would disagree that the 46 to 47k average number includes kids as earners. It is my understanding that those figures are generally reported as household. In other words, it could be one earner, two earners etc. but the household average fall around $50k.

I think the sadder fact is that 50% of the population do not pay yet can determine the payment amounts of the remainder. The distribution of wealth is something that each person has at least some input to. Working harder, sacrificing for your kids, saving etc. Having your taxes determined by another group takes those decisions out of the hands of the payers. That is a patently broken system in my opinion.

[yermom]

so if you make under 50k a year you aren't worthy of voting?

[SoonerInKCMO]

so if you make under 50k a year you aren't worthy of voting?

Only if you make under 50k, are married and have two kids under 17. ;)

[Okla-homey]

so if you make under 50k a year you aren't worthy of voting?

Of course they are worthy of voting. We have evolved as a country from the Founders Era in which only male property owners could vote, to practically universal sufferage. I say "practically" because in most states, convicted felons and incarcerated persons aren't allowed to vote.

But look at it this way. Folks who do not pay Federal income taxes are generally not too concerned about whether the people they elect enact changes in the Federal tax code that increase taxes on those who do pay Federal income taxes.

No matter how you look at it, you must admit the system we have perpetuates a paradigm in which the interests of those who rely on government largesse and therefore, O.P.M. (other people's money), are generally opposed to the interests of those people who are compelled to pay taxes that ultimately end up in other people's pockets - a/k/a "redistribution of wealth."

We need a system in which April 15 is a sucky day for everyone. If we ever got there, I suspect much, if not all, the runaway spending that has become the norm nowadays would taper right off. That's also why I'm a fan of a flat tax on all but those living belowthe Federal poverty line, plus a Federal sales tax which would tap into a vast untapped revenue stream. That way everyone, including crooks, tax cheats and illegals, would get to share in the fun every time they make a purchase.

[yermom]

so what do you suggest? raise taxes on the poor?

i don't see a line forming to trade places with people on the dole

[Okla-homey]

so what do you suggest? raise taxes on the poor?

i don't see a line forming to trade places with people on the dole

We need a system in which April 15 is a sucky day for everyone. If we ever got there, I suspect much, if not all, the runaway spending that has become the norm nowadays would taper right off. That's also why I'm a fan of a flat tax on all but those living below the Federal poverty line, plus a Federal sales tax which would tap into a vast untapped revenue stream. That way everyone, including crooks, tax cheats and illegals, would get to share in the fun every time they make a purchase.

[bluedogok]

My wife makes more than me and had about $5000 less taken out in taxes. My huge refund went to me owing something once I plugged in her numbers. Ugh!

We both make about equally and I've told her several times that if she doesn't adjust what she has taken out they'll never take out enough.

I like getting a refund. It's a good way to force you to save a little extra. It might not be the smartest thing financially but, let's be honest, the .5% interest or whatever you can get at a bank isn't really enough to make a difference anyway...
The stupid thing is when they jack around with the withholding rate charts "to put more money in your pocket" (it has happened under many presidents regardless of party) when all they are doing is screwing around with everyone so you end up having to pay at the end of the year or change your withholding again if you try to keep it fairly close to a zero balance.

I remember when I was making 18,000 a year and I still didn't get much back, I still had to "pay taxes" and didn't turn a profit due to taxes. Most of these credits have ballooned in the past 10-15 years but yet all we hear about it is that "the rich don't pay enough taxes", well of course they can't keep up if the bottom end isn't paying in. At best it should be a zero sum thing, the credits should never "pay you" more than you paid into the system, which many are getting money back more than what they paid in.

[SCOUT]

To go back to the membership analogy, imagine the club was a history club. There is a proposal to change the meeting place from some dude's basement to the Waldorf. The only problem is that it is going to increase the overall budget by 200%. Do you think the half that doesn't have to pay anything will support this proposal? Do you think it is fair to those who actually have to pay for it?

[Ike]

First, I would disagree that the 46 to 47k average number includes kids as earners. It is my understanding that those figures are generally reported as household. In other words, it could be one earner, two earners etc. but the household average fall around $50k.

No, it does. Per Capita income is a simple calculation. Total GDP divided by population. Not divided by household, because that is a harder number to come by. It's not right, it's not wrong, it just is what it is.



I think the sadder fact is that 50% of the population do not pay yet can determine the payment amounts of the remainder. The distribution of wealth is something that each person has at least some input to. Working harder, sacrificing for your kids, saving etc. Having your taxes determined by another group takes those decisions out of the hands of the payers. That is a patently broken system in my opinion.

Again, those 50% do pay. SS and other payroll taxes, consumption related taxes, etc. And because the 50% that "don't pay" spend most, if not all of their income on consumption, thats probably a larger fraction of their income going to taxes than most people take into account.

[SoonerInKCMO]

If some dude is out there supporting his wife and two kids, paying Medicare and Social Security taxes, paying 8-9% local sales tax, paying his mortgage or rent, paying property taxes, etc., etc., and doing this all on considerably less than I'm making, I won't complain if he ends up getting back whatever he paid in for income taxes.

[SCOUT]

No, it does. Per Capita income is a simple calculation. Total GDP divided by population. Not divided by household, because that is a harder number to come by. It's not right, it's not wrong, it just is what it is.



Again, those 50% do pay. SS and other payroll taxes, consumption related taxes, etc. And because the 50% that "don't pay" spend most, if not all of their income on consumption, thats probably a larger fraction of their income going to taxes than most people take into account.

The last thing I want to do is have a statistical disagreement with you :) I was saying that the figures are generally not reporting as per capita income but rather total household income. It is as equally imprecise but would not be a simple division by population.

SS and other payroll taxes are in a separate bucket, for the most part, when spending by the government is being considered. I am not trying to say that 50% do not pay taxes. I have been careful to only specify federal income tax.

[Ike]

Of course they are worthy of voting. We have evolved as a country from the Founders Era in which only male property owners could vote, to practically universal sufferage. I say "practically" because in most states, convicted felons and incarcerated persons aren't allowed to vote.

But look at it this way. Folks who do not pay Federal income taxes are generally not too concerned about whether the people they elect enact changes in the Federal tax code that increase taxes on those who do pay Federal income taxes.

I fundamentally disagree with the previous sentiment. One of the reasons republicans get a lot of support for their tax cuts, even ones that mostly go to the wealthy is because most everyone believes in the back of their mind that one day they will be part of the wealthy, and when they are, they'd like to not have to pay a lot of tax on that.



No matter how you look at it, you must admit the system we have perpetuates a paradigm in which the interests of those who rely on government largesse and therefore, O.P.M. (other people's money), are generally opposed to the interests of those people who are compelled to pay taxes that ultimately end up in other people's pockets - a/k/a "redistribution of wealth."

We need a system in which April 15 is a sucky day for everyone. If we ever got there, I suspect much, if not all, the runaway spending that has become the norm nowadays would taper right off. That's also why I'm a fan of a flat tax on all but those living belowthe Federal poverty line, plus a Federal sales tax which would tap into a vast untapped revenue stream. That way everyone, including crooks, tax cheats and illegals, would get to share in the fun every time they make a purchase.

Interestingly, there are those that claim that over the last 10 years, wealth has been redistributed the other way...to the rich. How or why, I have no idea, but I've seen a number of things supporting this view over the past several years.

But regardless, the point I'd bring up is that I have yet to meet anyone who wants to take a pay cut in order to pay less tax.

[Ike]

The last thing I want to do is have a statistical disagreement with you :) I was saying that the figures are generally not reporting as per capita income but rather total household income. It is as equally imprecise but would not be a simple division by population.

SS and other payroll taxes are in a separate bucket, for the most part, when spending by the government is being considered. I am not trying to say that 50% do not pay taxes. I have been careful to only specify federal income tax.

I'm not trying to have a statistical argument...but if you get the number for GDP in the US (roughly 14 trillion) and divide by the population (roughly 300 million), you come out with something between 46K and 47K.

I have no idea what average household income is, even an estimate of it.

[SCOUT]

I'm not trying to have a statistical argument...but if you get the number for GDP in the US (roughly 14 trillion) and divide by the population (roughly 300 million), you come out with something between 46K and 47K.

I have no idea what average household income is, even an estimate of it.
Household income is tabulated by the Census Bureau. According to their most recent fact sheet for 2008, median household income is $52,029.

http://quickfacts.census.gov/qfd/states/00000.html

[yermom]

The stupid thing is when they jack around with the withholding rate charts "to put more money in your pocket" (it has happened under many presidents regardless of party) when all they are doing is screwing around with everyone so you end up having to pay at the end of the year or change your withholding again if you try to keep it fairly close to a zero balance.

I remember when I was making 18,000 a year and I still didn't get much back, I still had to "pay taxes" and didn't turn a profit due to taxes. Most of these credits have ballooned in the past 10-15 years but yet all we hear about it is that "the rich don't pay enough taxes", well of course they can't keep up if the bottom end isn't paying in. At best it should be a zero sum thing, the credits should never "pay you" more than you paid into the system, which many are getting money back more than what they paid in.

now this i agree with

[Ike]

Household income is tabulated by the Census Bureau. According to their most recent fact sheet for 2008, median household income is $52,029.

http://quickfacts.census.gov/qfd/states/00000.html

(and now we learn the difference between medians and means)

Seriously, I'm not arguing with you at all...just trying to illuminate the math.

Median household income is calculated in the following way: Take all households, and list their incomes in increasing order. Find the one exactly in the middle. That is median household income. In other words, 50% of american households make more than that, and 50% make less.

Mean income would be what we more often associate with an average. Sum up the incomes of all households and divide by the number of households.
The reason mean household income is rarely reported is because it gets biased by the high end. I was reading a thing a few months ago that showed that the top 400 households earned more than the bottom 24,000,000 households. If you take the average of just those two groups, the mean income would be more than 24,000,000 households make, and thus not a very illuminating number...for some things.

So you can see then why per-capita income and median household income are very different numbers. When I was calculating how much of GDP the bottom 50% control, I was using per-capita income, because it relates more directly to GDP.

[SCOUT]

(and now we learn the difference between medians and means)

Seriously, I'm not arguing with you at all...just trying to illuminate the math.

Median household income is calculated in the following way: Take all households, and list their incomes in increasing order. Find the one exactly in the middle. That is median household income. In other words, 50% of american households make more than that, and 50% make less.

Mean income would be what we more often associate with an average. Sum up the incomes of all households and divide by the number of households.
The reason mean household income is rarely reported is because it gets biased by the high end. I was reading a thing a few months ago that showed that the top 400 households earned more than the bottom 24,000,000 households. If you take the average of just those two groups, the mean income would be more than 24,000,000 households make, and thus not a very useful number...for some things.

So you can see then why per-capita income and median household income are very different numbers.

While I appreciate the education, you will see that I said that household income is generally the reported number. Not that they are the same thing.

I provided the link because you said didn't know how it was calculated.

[Ike]

While I appreciate the education, you will see that I said that household income is generally the reported number. Not that they are the same thing.

I provided the link because you said didn't know how it was calculated.
Oh, I didn't know how average household income was calculated, because it involves an estimate of how many households there are...which I couldn't do from what I have.

If I look up the estimate of households in the US (~115 million), then that would mean that average household income is 121,000...which as I mentioned before, is biased toward the high end.

[Veritas]

We're meeting our CPA on Tuesday to find out the final tax bill. We know it's going to be hefty. I can't say as I'm super thrilled to have worked nearly four months out of the year for the government.

I'm pretty confident that if I didn't have to give that money to them that we could reinvest it into our business to help it continue to grow and provide more jobs. I could do more with that money to stimulate the economy than the government can, guaranteed.

But, you know, somebody has to help pay back the Chinese for Bush's wars and Obama's...well, pretty much everything Obama's done.

So, actually, ****, I worked for the Chinese for four months. That blows.

[delhalew]

I am an aberation. I slipped into recipient status this year. However, in the intrest of doing what is right, I am willing to take a hit and vote for a flat/fair tax.
Yes I paid my FICA, but that is not income tax persay.
If you think about this opinion is self serving, meaning as an American, I should be able to improve my lot in life and save myself future money.
All that said...repeal the sixteenth amendment.

[NormanPride]

nationwide sales tax

[TopDawg]

I think the sadder fact is that 50% of the population do not pay yet can determine the payment amounts of the remainder. The distribution of wealth is something that each person has at least some input to. Working harder, sacrificing for your kids, saving etc. Having your taxes determined by another group takes those decisions out of the hands of the payers. That is a patently broken system in my opinion.

The way you phrase it, you make it seem as though ONLY the people not paying into the system have a say. The people who ARE paying into the system also have a vote, right? It's not as if the system says "Hey poor people, how much do you want the rich people to pay?"

Each person who doesn't pay has the same "vote-power" as each person who does. That still may be a sad fact to you, but it seems a little less unfair to me than the way I understand your post above.

[Boarder]

I have this book (http://www.amazon.com/FairTax-Answering-Critics-Neal-Boortz/dp/B0027CSNOO/), but haven't gotten a chance to read it, yet.

It seems like tax changes get more and more play each year. Last time, Huckabee and Paul were both advocates.