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Is it time to join the 47% of Americans who pay no taxes?
04-08-2010, 03:55 PM
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#1
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Recycles dryer sheets
Join Date: May 2007
Posts: 444
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Is it time to join the 47% of Americans who pay no taxes?
This article just blew me away and got me thinking......
Nearly half of US households escape fed income tax - Yahoo! Finance
If I paid off my house, cut my work down to make less than 50K a year, assuming Obama's gonna take care of my medical needs, I could live on 4k a month and pay no federal tax! Doesn't sound too bad, does it?
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04-08-2010, 03:57 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Oct 2009
Posts: 2,115
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Yes, that is how we are being incentivized. Be less productive and more dependent on the government. Dependence = less freedom though...not more.
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“Of all the paths you take in life, make sure a few of them are dirt.” John Muir
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04-08-2010, 04:17 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
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Yeah, sounds great until you find out that one of the things you need to do to join that club is have a bunch of kids.
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Retired early, traveling perpetually.
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04-08-2010, 04:38 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
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Quote:
Originally Posted by MuirWannabe
Yes, that is how we are being incentivized. Be less productive and more dependent on the government. Dependence = less freedom though...not more.
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Expand Freedom! Raise Taxes!
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Retired early, traveling perpetually.
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04-08-2010, 04:51 PM
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#5
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Recycles dryer sheets
Join Date: May 2007
Posts: 444
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Quote:
Originally Posted by Gone4Good
Yeah, sounds great until you find out that one of the things you need to do to join that club is have a bunch of kids.
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Yeah I qualify...3 kids and 2 of them under 17.
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04-08-2010, 09:51 PM
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#6
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gone traveling
Join Date: May 2008
Posts: 3,864
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I don't think it takes a genius to figure out that a system where half the people pay so much in taxes that the other half pays nothing is not sustainable, much less fair.
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04-08-2010, 09:58 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2008
Location: No fixed abode
Posts: 8,765
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__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Anonymous (not Will Rogers or Sam Clemens)
DW and I - FIREd at 50 (7/06), living off assets
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04-08-2010, 10:03 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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Quote:
Originally Posted by Westernskies
I don't think it takes a genius to figure out that a system where half the people pay so much in taxes that the other half pays nothing is not sustainable, much less fair.
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It depends. If half the people are paying no taxes because they make too little income - then that seems fair.
Here it is ranked by AGI
Tax Year 2007 - Federal Income Tax
Percentiles Ranked by | AGI Threshold on | Percentage of Federal | AGI | Percentiles | Personal Income Tax Paid | Top 1% | $410,096 | 40.42% | Top 5% | $160,041 | 60.63% | Top 10% | $113,018 | 71.22% | Top 25% | $66,532 | 86.59% | Top 50% | $32,879 | 97.11% | Bottom 50% | <$32,879 | 2.89% |
Note: AGI is Adjusted Gross Income
Source: Internal Revenue Service
from National Taxpayers Union - Who Pays Income Taxes?
According to this table, in 2007 those lower 50% of households filing taxes are making less than $33K! And those are the folks paying almost no Federal Income taxes.
Audrey
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Retired since summer 1999.
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04-08-2010, 10:16 PM
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#9
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gone traveling
Join Date: May 2008
Posts: 3,864
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Quote:
Originally Posted by audreyh1
It depends. If have the people are paying no taxes because they make too little - then that seems fair.
Audrey
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Who or what defines "too little" ?
IMO, fair is people paying their fair share, not some paying it all so others can pay nothing at all.
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04-08-2010, 10:22 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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Quote:
Originally Posted by Westernskies
Who or what defines "too little" ?
IMO, fair is people paying their fair share, not some paying it all so others can pay nothing at all.
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I added a the table from 2007 above. "Too little" is the households making $0-$33K. That's pretty low.
"Fair Share" can be established in many different ways. In the US we don't make people pay Federal Income taxes on their first dollar, but rather some minimal income threshold is met before taxes start to become due. It's been that way for a long time.
It might seem outrageous until you realize how many households fall into that low income category. 50% of them!
And yes, credits are heavily weighted towards how many dependents are in the household. It's also been that way for a long time.
Even for flat tax proponents there is some minimal threshold before taxes are assessed.
Audrey
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Retired since summer 1999.
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04-08-2010, 10:28 PM
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#11
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Dryer sheet aficionado
Join Date: Jan 2010
Location: Galt's Gulch
Posts: 35
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"You cannot lift the wage earner by pulling down the wage payer" - Abraham Lincoln
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04-09-2010, 05:38 AM
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#12
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,714
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Gee - another thread on taxes. Will this get more intense as we close on tax filing day?
Only one post from me - once again to remind readers how convenient it is to ignore the 15.3% of taxes already paid on wages by those that "pay no taxes".
Gosh - that's a higher rate of taxes on wages than all the people making hundreds of millions in compensation but paying capital gains rates of 15% because they get paid in stock.
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04-09-2010, 05:38 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
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Many people who pay no income tax have raised families of wage earners. In their elderly years they pay little or no taxes. It's convenient to lump millions of citizens into a statistical category, but it obscures much.
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04-09-2010, 06:27 AM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
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Quote:
Originally Posted by Westernskies
I don't think it takes a genius to figure out that a system where half the people pay so much in taxes that the other half pays nothing is not sustainable, much less fair.
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Agreed, but to assume they "pay nothing" you have to exclude social security taxes, medicare taxes, property taxes, state income tax, local income tax, and sales taxes. But aside from that, 47% "pay nothing".
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Retired early, traveling perpetually.
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04-09-2010, 06:40 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2006
Location: Washington, DC
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I am amazed at how envious so many of us seem to be of people who are far less well off than us. I wouldn't trade places with a "normal" family that qualifies for no taxes in a month of Sundays. I might go for being one of the rare rich guys who avoids all taxes, but they are pretty rare and it might offend the Marxist social justice sentiments I picked up at church
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Idleness is fatal only to the mediocre -- Albert Camus
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04-09-2010, 06:53 AM
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#16
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Recycles dryer sheets
Join Date: Dec 2009
Location: Cleveland
Posts: 344
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Title is mis-leading. They do pay "taxes", just not federal income taxes.
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04-09-2010, 07:05 AM
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#17
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Thinks s/he gets paid by the post
Join Date: May 2006
Location: Where the stars at night are big and bright
Posts: 2,847
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I'm not envious of them at all - I've been down there.
I'll quote BO on this one:
Quote:
What we have to do is to take a look at our structural deficit, how are we paying for government, what are we getting for it, and how do we make the system more efficient? Everybody is going to have to give. Everybody is going to have to have some skin in the game.
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I know these people pay sales tax, RE tax, etc. But if they're not paying FIT they have no skin in the big game. They are just recipients of the largess of the House of Lords in D.C. Congressional representatives who are buying their votes. If all they're doing is waiting for Uncle Sam to mail them a check they have no reason to be concerned about responsible government, they're just watching the wheels spin on the government's slot machine waiting for three cherries to pop up.
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And so, my fellow Americans: ask not what your country can do for you - ask what you can do for your country.
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I don't care if they kick in $5, but everybody needs to pay something. Government's job is not to take care of people, it is to focus and concentrate our efforts in accomplishing things we need done, but can't do as individuals or small communities.
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There is no pleasure in having nothing to do; the fun is having lots to do and not doing it. - Andrew Jackson
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04-09-2010, 07:05 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
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Quote:
Originally Posted by donheff
I am amazed at how envious so many of us seem to be of people who are far less well off than us.
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"Those lucky SOBs. I'll show them. I'll stop working and cut my gross by $50K so I can save $10K in taxes."
But won't that leave you $40K poorer?
"Yeah, but I'll pay less taxes."
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Retired early, traveling perpetually.
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04-09-2010, 07:08 AM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
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Quote:
Originally Posted by Leonidas
I know these people pay sales tax, RE tax, etc. But if they're not paying FIT they have no skin in the big game. .
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And somehow we still ignore the 15% in Social Security tax to pay for "the big game".
Part of the problem is how these taxes are paid. Nobody has to file a form paying their Social Security tax, they just pay it either through lower wages or a type of "garnishment". If folks had to write a check for the SS taxes owed on April 15, no one would be claiming these aren't real taxes.
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Retired early, traveling perpetually.
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04-09-2010, 07:25 AM
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#20
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Recycles dryer sheets
Join Date: Dec 2009
Location: Cleveland
Posts: 344
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Quote:
And buy a house I can't afford to save additional money on taxes!
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