My 2010 income tax exceeds the average household income

[Westernskies]

Well for starters, let's take the OP on this thread, who "doesn't feel rich" even though he's in the top 1/1000 of one percent incomes worldwide. And to that I would add fantasm who later in the thread described himself as " sad/angry/depressed/annoyed" by his tax bill of $195K, though he must be earning, at a guess, at least three times as much as the OP (because his tax bill is ~3x the OP's), and maybe more. By "complainers" I was referring to individuals of like attitudes, not to people in specific professions. I don't know what either the OP or fantasm do for a living, and I wouldn't expect everyone in those professions to have the same attitude about taxes in any case, any more than all the people in my line of work do. The professions I listed have in common that they require higher education and don't pay incomes in the range that result in five-digit tax bills. But I don't suppose all teachers, social workers, librarians and clergy have the same attitude toward taxes either. Some of them probably complain that their taxes are too high, and others of them think "even after taxes I have all the money I need, in fact enough for more than just the necessities—all in all, I've nothing to complain about". My remark about preferential treatment did not refer to you either, or to high earners in general, but to fantasm's suggestion in #20 that he (and other high earners?) should get "preferential treatment or better benefits than someone who makes less". Nor do I see you as asking for sympathy, but OP and fantasm certainly struck me as wanting some.

I pay a higher percentage of my income in taxes than a low wage earner, or (I'm pretty certain) than a household with children at the same annual income, and IMO that's how it should be—the low earner or the household with kids needs a bigger proportion of what they make for necessities than I (a childless single) do. I've got earnings over and above what I need to live (and to save for retirement) on, and to an even greater extent so do fantasm and the OP—and possibly you too. I think earnings that are "over and above" should be taxed before eating into what a low-income household needs for the bare necessities. If that's a targeted tax rate, you're right, we never will agree.

Good post! You are right, we'll never agree on what "over and above" means, (maybe we only need two tax rates- one for "just enough" and another for "too much") but I appreciate your considered reply.

 

[Gumby]

"I like to pay taxes. With them I buy civilization."

-- Oliver Wendell Holmes, Jr.

 

[theloneranger]

Many years ago, when I made nowhere close to what I did that last few years of employment, I complained to my accountant (now deceased) about paying so much income tax.
His reply, "you have a choice to make, you can pay less taxes by having a lower income."
Have been in the 35% bracket for a while and not complaining any more.

 

[Alan]

Alan, I think you may have misinterpreted my question. The "Why" was intended as "WHY are some folks financially better off than others?" I maintain it is primarily due to making better choices, financial and lifestyle sacrifices, taking some risks, and and working your tail off. Does luck have something to do with it? Perhaps, but it's hard to quantify "luck" as a taxable entity, but in my experience, the harder I worked the "luckier" I seemed to get. We've flogged the luck horse to death in other threads, so I won't belabor it here.

Maybe a better way to phrase the question is WHY did you choose FI over Welfare?

Thanks, I misunderstood what your "Why" question referred to.

As to your question as to "WHY I chose FI over Welfare", I would have thought that was obvious, - why would I want to choose welfare when there were options? We grew up "below the poverty line" and had free school meals, coupons for school uniforms etc, it is not pleasant at all having no money. As it happens I became FI on the "backs" of the better off, as did my brother and sister. We all qualified for free tuition by way of passing national examinations, and we also qualified for support grants based on our parents low incomes (Dad was a miner, mother was a "skivvy"). If we didn't have those options my brother and I would have gone the mines like all our male cousins. (As it happens my brother still went down the mines, but only after he got a degree in Mining engineering).

DW and I had a few months on welfare before we got a job after graduating. We lived in a really grotty bed-sit in a red-light area that was pretty grim. That is why I don't understand folks who pay 6 figures in taxes being so sad.

I absolutely understand. And that was not my point. I must not have made the point. Not that there is anything wrong with that...

I was addressing another question, which I thought had been raised. "Why do heavily taxed high earners complain about taxes"; not "why are welfare recipients happier than heavily taxed high earners", which from what I have seen I would tend to agree with you, that they are not.

I figured I must just have had my knickers in a twist and hadn't understood your post - thanks for the explanation

 

[kyounge1956]

Good post! You are right, we'll never agree on what "over and above" means, (maybe we only need two tax rates- one for "just enough" and another for "too much") but I appreciate your considered reply.

Maybe you did not mean what I thought by a "non-targeted" rate. If the standard deduction, exemptions etc were set so that no tax was paid on earnings up to "enough income for the necessities" (however much that is) and any earnings over that amount (regardless of how far over) were taxed at the same rate, we might agree after all. Who'da thunk it?

 

[Texas Proud]

Coal mining doesn't pay as well as many other professions that require higher education, which is why some of us worked our way through college at minimum wage while our friends headed off to the mines (or factories, or construction sites) at wages of 4-6 times that amount right out of high school. The same reason we later took career-path jobs that didn't allow us to punch a time clock and be home every evening with our families. And why we looked ahead and put money into our 401K's instead of a bass boat. And why many of are fed up with having higher tax crosshairs on our backs from folks who made different choices and now begrudge us the success we worked so hard to achieve.

Heck, some of these people still make more money than I do... and I am pretty good....


I have a friend who went into the Navy.. learned about nukes and power plants... got a job with a utility and was always making more money than I was until about 10 years ago when I took an overseas assignment and got a few good raises.. have lost some of that back after being let go, but still am OK....

I also have an in-law who make 50% more than me working on drilling rigs or something like that... did not know this until a few months ago when BIL told me about it (it is his SIL).... now I know how they afford a Hummer and a bigger house than me even though they are in their early 30s....

 

[Westernskies]

Maybe you did not mean what I thought by a "non-targeted" rate. If the standard deduction, exemptions etc were set so that no tax was paid on earnings up to "enough income for the necessities" (however much that is) and any earnings over that amount (regardless of how far over) were taxed at the same rate, we might agree after all. Who'da thunk it?

Well, almost...

I still think that everyone needs some skin in the game; otherwise you foster the entitlement mentality that seems to be growing in this country.
But in principle, I would support the notion of a system that required a very minimal tax rate for those earning below a certain threshold; any earnings over the threshold amount would be taxed at the same flat rate, regardless of how far over. Also, eliminate thousands of pages of tax code, close loopholes, and "incentify" people to save for their long-term financial security.

 

[Danmar]

Interesting posts. Agree with Alan and kyounge's point of view. I will paraphrase someone else: "I have been rich and I have been not so rich. Rich is better." I generally pay 7 figures of tax each year. As you can imagine Life is really good. No complaints from me!

 

[FUEGO]

Interesting posts. Agree with Alan and kyounge's point of view. I will paraphrase someone else: "I have been rich and I have been not so rich. Rich is better." I generally pay 7 figures of tax each year. As you can imagine Life is really good. No complaints from me!

I think we have a workable compromise here. We soak the he|| out of the truly rich (those able to pay 7 figures in tax) and leave the poor old middling rich alone (defined as those currently only paying low six figures in tax).

 

[Alan]

Well, almost...

I still think that everyone needs some skin in the game; otherwise you foster the entitlement mentality that seems to be growing in this country.
But in principle, I would support the notion of a system that required a very minimal tax rate for those earning below a certain threshold; any earnings over the threshold amount would be taxed at the same flat rate, regardless of how far over. Also, eliminate thousands of pages of tax code, close loopholes, and "incentify" people to save for their long-term financial security.

No arguments here. And they could do with tightening up some of the loopholes that Corporations use. The other day I saw a Dilbert cartoon where Dogbert was recommending a Dutch Sandwhich so I had to Google to discover that in fact it is something that Google, among others, uses to save tons in taxes.

"Dutch sandwich” is a financial term to reduce U.S. tax obligations. For example, a Dutch corporation is formed and an investment is made in a Netherlands bank; an Antilles trust company (where secrecy laws don’t reveal the owner) helps to “lend” a U.S. investor his own money from the Dutch bank. The sham is a “Dutch sandwich” between the Netherlands and the Dutch Antilles (two Dutch jurisdictions).

Interesting posts. Agree with Alan and kyounge's point of view. I will paraphrase someone else: "I have been rich and I have been not so rich. Rich is better." I generally pay 7 figures of tax each year. As you can imagine Life is really good. No complaints from me!

This thread had DW and I talking about that short spell we had on Welfare. It is funny looking back but was horrible at the time. We both graduated with EE degrees and rented a bed-sit in a red-light area (nice and cheap). After 6 weeks we started work at the same company on good money and needed to save for a deposit for a house asap, so we stayed for another 2 or 3 months. (In 1977, the most you could get was a 95% mortgage).

We bought an old banger to get around in (our first car- a mini) for 100 pounds. It was parked on the street and was broken into regularly - we left it unlocked after the first couple of times and twice walked back from the pub to find the thieves hadn't even bothered to close the door. Each day after we got back I would disable it by removing the wire between the coil and the distributor cap, so the engine would turn but never start. (it was an art to get it started anyway ).

The bedsit was on the 2nd floor of a 3 storey terraced house and the rooms above were occupied by prostitutes. There was one doorbell for the whole house and that bell was right above the door into our bedsit. Every night it would be ringing into the early hours followed by folks going up and down stairs. So I poked a hole through from inside our room to behind the bell and pulled through the power wires and fitted a switch. At 11pm when we went to bed I'd switch off the bell then turn it on again next morning. I'm sure their business took a big hit for the time we lived there

 

[Westernskies]

I think we have a workable compromise here. We soak the he|| out of the truly rich (those able to pay 7 figures in tax) and leave the poor old middling rich alone (defined as those currently only paying low six figures in tax).

Yep, screw the bourgeoisie billionaires and leave the common millionaires alone...

 

[NW-Bound]

"Don't tax you, don't tax me, tax that fellow behind the tree!" - Russel Long, former US Senator.

 

[FUEGO]

Yep, screw the bourgeoisie billionaires and leave the common millionaires alone...

I guess technically we aren't screwing them. They should just continue feeling lucky that "we" have decided to allow them to keep most of their largesse. After all, once you have enough, anything above that can be shared with those in greater need.

 

[Disappointed]

From Taxfoundation.org


March 30, 2006
Number of Americans Paying Zero Federal Income Tax Grows to 43.4 Million

by Scott A. Hodge

http://www.taxfoundation.org/research/show/1410.html

 

[Westernskies]

Uh, oh....

 

[REWahoo]

From Taxfoundation.org, I can't seem to get the whole article to post properly, perhaps somebody can help.

Maybe delete the quote and post a link only...

 

[Alan]

From Taxfoundation.org, I can't seem to get the whole article to post properly, perhaps somebody can help.

It is against the Community Rules to post an entire article. Please post the link, or PM me with the link and I'll edit your post.

Do not post protected / copyrighted content:
Information copyrighted or owned by any individual or entity other than the member should not be posted without the consent of the owner. Copyrighted material includes images and text produced and owned by others. If such an event occurs, the individual posting the information shall be held solely responsible. You cannot legally post entire articles or news in the forum without permission from the copyright holder. Even if you attribute the article correctly it’s still copyright infringement. Under Fair Use provisions you can legally post a small abstract of an article - or perhaps the opening paragraph. The exception to this rule is press releases; they are meant for distribution and can be copied and distributed. If you are not sure if you can copy something then always err on the side of caution and simply post a link to the material.

 

[lilly]

Alan, I think you may have misinterpreted my question. The "Why" was intended as "WHY are some folks financially better off than others?" I maintain it is primarily due to making better choices, financial and lifestyle sacrifices, taking some risks, and and working your tail off. Does luck have something to do with it? Perhaps, but it's hard to quantify "luck" as a taxable entity, but in my experience, the harder I worked the "luckier" I seemed to get. We've flogged the luck horse to death in other threads, so I won't belabor it here.

I would like to add to your discussion of "Why" some people end up financially better than others that your "Luck" may just have been the fact that you were born a male. What about the income gap between men and women? I work just as hard...probably harder than my male counterparts, but I know the goatee club exists and most the people in the front offices are men.

As far as paying taxes goes....I like roads, firemen, police officers, our troops. Let's not forget that this money does go to many services that tend to be taken for granted when complaining about taxes. I think someone above equated it to someone robbing them at gun point....you may want to rethink that statement.

 

[kumquat]

I've always told anyone who was willing to listen that I'd be REALLY HAPPY if I could just pay a billion in income tax. Granted that taxes are higher here in the Frozen North, but I think I could live OK on the rest.

 

[soupcxan]

This thread has gone a bit off track. My point was that for me, it was not that long ago that my income was close to my total tax bill now (though filing married distorts things compared to when I was single) and it just seems strange to be in a different position now. I wasn't crying crocodile tears over the taxes I will pay nor grousing that they are too high.

 

[Danmar]

I suspect the productive and interesting portion of his thread has ended for me. I guess we will just have to agree to disagree.

 

[Westernskies]

I would like to add to your discussion of "Why" some people end up financially better than others that your "Luck" may just have been the fact that you were born a male. What about the income gap between men and women? I work just as hard...probably harder than my male counterparts, but I know the goatee club exists and most the people in the front offices are men.

As far as paying taxes goes....I like roads, firemen, police officers, our troops. Let's not forget that this money does go to many services that tend to be taken for granted when complaining about taxes. I think someone above equated it to someone robbing them at gun point....you may want to rethink that statement.

So, if you have a goatee, you should be in a higher tax bracket HFWR, Johnny36, and haha (among others) aren't going to like that...

Besides, we all pay (gender-neutral) taxes to support the EEOC.

As far as paying taxes goes, I drive on the same roads and sleep under the same mantle of protection that you do- I understand and support the need for taxes in a civilized society- but should I be targeted to pay more for the same services?

I don't believe I equated paying taxes to being robbed at gunpoint- if you are going to make reference in a quote, please attribute it to the proper source.

 

[Martha]

Well, almost...

I still think that everyone needs some skin in the game; otherwise you foster the entitlement mentality that seems to be growing in this country.
But in principle, I would support the notion of a system that required a very minimal tax rate for those earning below a certain threshold; any earnings over the threshold amount would be taxed at the same flat rate, regardless of how far over. Also, eliminate thousands of pages of tax code, close loopholes, and "incentify" people to save for their long-term financial security.

I see just as much of the so called entitlement mentality from the well off as the poor. They may want lower taxes. They may think that they are entitled to it because they work hard and made the money. The feel like it is their money. They feel entitled.

Private property is a creation of society. It isn't some kind of God given right. Many early societies did not have that concept at all. The money you earned is only yours because society has decided that it is yours. And society places conditions on that ownership. It may decide that those who have more must contribute more. And at a higher percentage than those with less.

We all have some aspect of an entitlement mentality. This isn't all bad. We should expect good things from our society and push for those things. But I seriously question that any particular class in the US has more of an entitlement mentality than any other.

 

[Martha]

This thread has gone a bit off track. My point was that for me, it was not that long ago that my income was close to my total tax bill now (though filing married distorts things compared to when I was single) and it just seems strange to be in a different position now. I wasn't crying crocodile tears over the taxes I will pay nor grousing that they are too high.

I just contributed to the off track discussion. Congratulations on a good year!

 

[kyounge1956]

This thread has gone a bit off track. My point was that for me, it was not that long ago that my income was close to my total tax bill now (though filing married distorts things compared to when I was single) and it just seems strange to be in a different position now. I wasn't crying crocodile tears over the taxes I will pay nor grousing that they are too high.

I appear to have misunderstood you then. I too would find it strange to be paying as much in taxes a few years hence than my total income of today.

My apologies