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Old 04-10-2010, 05:36 PM   #61
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So, we have

There are people that pay and people that collect.
The people that pay somehow have a greater sense of fiscal responsibility.
The people that collect are motivated to vote for more government programs
The people that collect therefore should not be involved in the decision process. (voting).
The only reason to disagree with this is ďthey just don't like what it tells themĒ

Every single person pays taxes of one sort or another. Focusing on one source of taxes but then looking at all uses and types of spending is not a legitimate argument and is flawed reasoning.

Itís not that I/we donít like what it tells. The argument is flawed, the conclusions are not valid and there is no evidence to support the premise. Itís all based on a headline.

Note - I share most of the concerns about spending and lack of accountability. I just don't think it has anything to do with who pays income tax.
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Old 04-10-2010, 05:52 PM   #62
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Oh come on. I disagree, said why, and it isn't because I don't like what you are saying. That is mind reading and you can't read my mind.
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The related point I made is that the analogies and slogans do not fit the facts.
OK, then please share some examples of these facts. I either missed them or misread them.


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So, we have
The people that collect therefore should not be involved in the decision process. (voting).
I may have thrown that out there along the way as a somewhat tongue-in-cheek statement, but it isn't at the core of what we are saying. If you really need examples of 'skin in the game' accounting, I'll provide them later. But wow, it just seems so obvious, really.

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Old 04-10-2010, 06:07 PM   #63
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It's kinda like school taxes for me. I have no children. So why do I have to pay school taxes? If someone can ever logically explain this to me, I'm all ears.
I get steamed about school taxes because I actually had to set up a special bond fund to provide top cover for this extremely high involuntary expense in my FIRE budget. I don't mind paying county property taxes because I am the recipient of county services (road plowing, waste management, LE, emergency services, etc).
But what do I get for my school taxes? Nada.

End of rant.
You do get something, and it's not limited to an abstraction (helping the next generation, getting a beter educated electorate, etc). Your property values are better if you've got good schools. We have a town near us that would be a fine place to live, but starting about 20 years ago their schools started going downhill. Underfunding, poor management, etc. Now, houses there sell fro 20% less than ones nearby but in a better school district.
I'm not suggesting that high school taxes are worth it in your case, and I'd certainly not say that money is the most important factor in producing good schools. Still, people without kids do benefit if the public schools are good.
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Old 04-10-2010, 06:56 PM   #64
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I agree it isn't always the same group all through their lives - but if you look at your breakdown you've got the young-generally-low-wage years, followed by two decades of child/edu credits, then finally another two decades of senior-ship.

I'd bet that a pretty large % stay in a pretty low tax group for a large % of their lives.-ERD50
Nope - you can't convince me that for a large percentage of people the 18 to 62 age range is all taken up by low-wage years and child/edu credit years!

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Old 04-10-2010, 07:14 PM   #65
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Every single person pays taxes of one sort or another. Focusing on one source of taxes but then looking at all uses and types of spending is not a legitimate argument and is flawed reasoning.

Itís not that I/we donít like what it tells. The argument is flawed, the conclusions are not valid and there is no evidence to support the premise. Itís all based on a headline.

Note - I share most of the concerns about spending and lack of accountability. I just don't think it has anything to do with who pays income tax.
I agree, the 47% don't pay taxes, is misleading for all the reason spell out on the board.

However, a big reason this argument gets made is due to the fictional way the Government treat social security. Every year when they mail my statement as say you paid in X$ (not a large number) and you earned benefits of Y$ at age 66. The government is taking part in charade as I am sure most of us know. The money all goes to Washington and with few accounting tricks can be spent anyplace. So in this context it is accurate to say 47% don't pay anything for the Dept of Defense, Energy, Interior, HEW, Education etc. Of most of the people do a lot of money into our inter-generational wealth transfer called Social Security and Medicare.

After or perhaps before we achieve world peace, I'd like to see taxes simplified so there so we pay one Federal Tax, one state tax, and one local tax. At this point in my life I don't even care that much what the basis they tax us on incomes, sales, property, etc
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Old 04-10-2010, 07:24 PM   #66
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It's kinda like school taxes for me. I have no children. So why do I have to pay school taxes? If someone can ever logically explain this to me, I'm all ears.
..............

End of rant.
Perhaps you are paying for the "free" (at least until after) HS education you received?
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Old 04-10-2010, 07:54 PM   #67
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Nope - you can't convince me that for a large percentage of people the 18 to 62 age range is all taken up by low-wage years and child/edu credit years!

Audrey
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Here's how they did it, according to Deloitte Tax:

The family was entitled to a standard deduction of $11,400 and four personal exemptions of $3,650 apiece, leaving a taxable income of $24,000. The federal income tax on $24,000 is $2,769.

With two children younger than 17, the family qualified for two $1,000 child tax credits. Its Making Work Pay credit was $800 because the parents were married filing jointly.

The $2,800 in credits exceeds the $2,769 in taxes, so the family makes a $31 profit from the federal income tax. That ought to take the sting out of April 15.

Associated Press Article
I agree some were students, elderly, very low income, but many were not. Obviously, some of this is likely temporary like the Making Work Pay credit, but still the article states that:

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In 2007, about 38 percent of households paid no federal income tax, a figure that jumped to 49 percent in 2008, according to estimates by the Tax Policy Center.
and:

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The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government.
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Old 04-10-2010, 08:14 PM   #68
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It would be more accurate to say:
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For 2009, the result was a tax system that exempts almost half the country from paying Federal Income Taxes
It's pretty obvious that the poor economy and reduced employment contributed to much higher numbers in 2008 and 2009, because in 2007, the number was 38%. So they can back off a little on the "almost one half" as if it were a permanent condition IMO.

I really don't know how justifiably mad we can get at those 9% underemployed who paid no taxes because they got hit by the recession.

They try to make it sound like a permanent result when clearly these statistics vary by year and the state of the economy.

We all know the top 10 percent of earners pay a huge percent of Federal Taxes. They also make a huge percent of the income. So complaining about how things are skewed to "the few" without looking at the actual tax rates paid by each income range is useless.

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Old 04-10-2010, 08:25 PM   #69
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You do get something, and it's not limited to an abstraction (helping the next generation, getting a beter educated electorate, etc). Your property values are better if you've got good schools. We have a town near us that would be a fine place to live, but starting about 20 years ago their schools started going downhill. Underfunding, poor management, etc. Now, houses there sell fro 20% less than ones nearby but in a better school district.
I'm not suggesting that high school taxes are worth it in your case, and I'd certainly not say that money is the most important factor in producing good schools. Still, people without kids do benefit if the public schools are good.
Not so sure about this.

True, property values would likely be higher where there are good schools available, due to demand. But that would be true independent of whether property taxes paid for the schools, or parents paid for the schools. Just like places near the train station go for a premium, whether you take the train or not.

So while freebird5825's property values may be higher with good schools, she also paid more for the house due to that, and is paying higher taxes each year to support those schools. I'm not sure that's a great trade off, but it's tough to measure.

Another way to put that is, I guess property values would be higher if there was a shiny new BMW in 3/4 of the driveways in the neighborhood. But would you feel the increase was worth it if you paid your share of taxes to buy BMWs, and were the 1/4 that didn't get a BMW?

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Old 04-10-2010, 08:25 PM   #70
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Perhaps you are paying for the "free" (at least until after) HS education you received?
Very good observation. It doesn't apply to me personally, since I attended private school near NYC. But that isn't really pertinent.
Another reason I get so torqued is I am single (involuntarily as a widow) and I am still expected to keep up the same level of tax payments with dual income families. No pity party invitations are being issued.
If it weren't for my own lifetime of savings and dh2b, I doubt I could continue living here on my own. It would be very tight.
I know several women in my same position, but quite a bit older, who had to give up living in their houses because of the school taxes.
School taxes are a huge annual expense ($3200) I could do without. Add another $1000 for county taxes. And I live out in the boondocks in a very modest 1977 vintage home. Not a palace by any means.
Can you tell I just wrote a big school tax check? End of rant.
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Old 04-10-2010, 08:57 PM   #71
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If you disagree that everyone who benefits from our country having a decent public education system should help fund it, that's fine......
Well I agree that we all benefit from it. I disagree that it is a given that the cost should be divided equally among those with and w/o students. And having three kids myself who attended public schools K-12, I am arguing on principal, this could adversely affect me economically.

My neighbors have no kids. Sure, they benefit from the general public getting an education, but why should they pay as much as the parents of those kids?

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But why turn around what I said in a way that gives an intentionally dishonest representation? No need to take my words and paraphrase, restate or "turn around" so that the meaning is changed.
Well it was not an attempt to misrepresent it, I turned it around to try to understand it from another angle. So let's try again, more closely aligned:

We all benefit from having MDs available. Does that mean that we all should share in the cost of an MD's education, or should people who choose to become MDs pay that cost? Or we all benefit from the technology that engineers provide - should every engineer have his schooling paid for, etc, etc.

So I guess I don't understand why that doesn't extend down to K-12. People decide to have children, so let them take the responsibility to educate them. Obviously, as in other matters, if the parents absolutely can't afford it, it should be provided, so we don't have thugs in the streets. I still think the parents should carry the debt on their books.

Is there a flaw in that logic? People can hold different opinions on this, but I think the logic is defensible.

EDIT - excuse me, I answered the above based on what I read in the email subscription, it looks like maybe you added or edited it, at any rate the email was slightly different, so let me add this:

I guess I'm just not taking it as a given that the only way kids will get educated is if we all chip in. I think we can charge parents and get kids educated (while providing a safety net). This kind of dovetails into the 'skin in the game' threads on taxation. Maybe if parents paid the full cost, there would be a tighter loop on cost control?

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Old 04-10-2010, 09:07 PM   #72
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So I guess I don't understand why that doesn't extend down to K-12. People decide to have children, so let them take the responsibility to educate them. Obviously, as in other matters, if the parents absolutely can't afford it, it should be provided, so we don't have thugs in the streets. I still think the parents should carry the debt on their books.

Is there a flaw in that logic? People can hold different opinions on this, but I think the logic is defensible.

-ERD50
As a parent, I would have personally benefitted from having school tax turned into tuition fees payable by those who attend, as my children did not attend public school. So I paid twice.

However the modern US school mission is to impart some minimal degree of acculturation to a very heterogeneous group of students, many of whom do not speak English or speak it very poorly. The fact that the schools fail misreably at this task doesn't keep it from being at least theoretically correct that it is a public expense, that must be borne by the public as those who need it most would otherwise just opt out completely.


Schools are expensive, but less so than prisons.

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Old 04-10-2010, 09:15 PM   #73
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However the modern US school mission is to impart some minimal degree of acculturation to a very heterogeneous group of students, many of whom do not speak English or speak it very poorly. The fact that the schools fail misreably at this task doesn't keep it from being at least theoretically correct that it is a public expense, that must be borne by the public as those who need it most would otherwise just opt out completely.


Schools are expensive, but less so than prisons.

Ha
Yes, but isn't that covered by my admission that we should provide a safety net?

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Old 04-10-2010, 09:31 PM   #74
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Then why didn't you pay the full cost? I take it your argument is simply hypothetical........
Now we are back to the "I don't agree with a specific tax policy, but since those are the rules, I will still take the deduction, credit, etc." argument. And I know from previous posts that you feel the same as I do on that one.

More precisely, the (hypothetical) deal would need to be that I could pay the full cost in trade for dropping the cost of schools from my property tax bill forever (and inflation adjusted rebates from my pre-kids-in-school years). And that isn't offered, so it is hypothetical. Paying the full cost plus the full tax doesn't get me to where I was going, does it?

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Old 04-10-2010, 11:55 PM   #75
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I think we should move November Elections to April 15th- pay income taxes and vote on the same day....
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Old 04-11-2010, 04:30 AM   #76
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I believe part of that is due to the recession (people out of work). But it that number will increase at boomers retire.

That is part of the reason for Volcker's VAT or Energy tax. It ensures some of the tax bill is based on consumption for all of the population. We are getting ready to enter a time where many people are paying low/no income taxes, yet have money to spend.
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Old 04-11-2010, 07:58 AM   #77
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The problem is the Earned Income Credit (EIC). Too many people know exactly how much money they can earn and how many kids they have in order to maximize thier check FROM the government. Kids are parsed out to "parents" in order to maximize EIC across family units. People work only part year in order not to exceed income limits. If, as a tax preparer, you identify that their income is too high or that the kids are not deductible on their return and they will just leave and go to another tax preparer with the "right" answers. Now, I imagine they invest in free software and game the system even more.

I agree that FICA and Medicare are taxes on all wage earners including those that don't pay FIT; however, those are investments in our "own" accounts.

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Old 04-11-2010, 08:47 AM   #78
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The problem is the Earned Income Credit (EIC). Too many people know exactly how much money they can earn and how many kids they have in order to maximize thier check FROM the government. Kids are parsed out to "parents" in order to maximize EIC across family units. People work only part year in order not to exceed income limits. If, as a tax preparer, you identify that their income is too high or that the kids are not deductible on their return and they will just leave and go to another tax preparer with the "right" answers. Now, I imagine they invest in free software and game the system even more.

I agree that FICA and Medicare are taxes on all wage earners including those that don't pay FIT; however, those are investments in our "own" accounts.

Marc
At first I was tempted to ridicule this post - all of these marginalized poor people are conspiring with open source software to organize their lives around a small tax credit. Yah, right. But then I realized that there are undoubtedly a few very street smart, probably criminally inclined people doing precisely that to supplement their off the books criminal incomes. So why are you focused on these few losers who are picking pennies up from the margins of our society instead of worrying about the real parasites who ate our lunch as they nearly destroyed our economy?
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Old 04-11-2010, 09:15 AM   #79
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At first I was tempted to ridicule this post - all of these marginalized poor people are conspiring with open source software to organize their lives around a small tax credit. Yah, right. But then I realized that there are undoubtedly a few very street smart, probably criminally inclined people doing precisely that to supplement their off the books criminal incomes. So why are you focused on these few losers who are picking pennies up from the margins of our society instead of worrying about the real parasites who ate our lunch as they nearly destroyed our economy?
It sounds like you are condoning tax cheats as long as there are others who are commiting more serious crimes.
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Old 04-11-2010, 09:39 AM   #80
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It sounds like you are condoning tax cheats as long as there are others who are committing more serious crimes.
Not condoning tax cheats at all. I was questioning the focus on these very few zero tax tax cheats. The vast majority of the poor are not organizing their lives around some fruitless attempt to fraudulently get a tax credit. The few who may be are not worth getting bent out of shape about. Those few are not a major cause of our national problems. It is like the old "welfare queens" deal. Sure there are a few of these jerks but we have much bigger fish to fry - why all the angst about these few crooks buried among the poor?
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