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Old 02-24-2010, 07:57 AM   #41
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All this talk about tax rates over time made me curious about how much we're actually paying versus how much we used to pay. Listening to the "Taxed Enough Already" movement you'd think we're paying much, much more now. So I looked up detailed information on tax brackets (found here) and calculated what someone earning $50K and $500K in taxable, CPI adjusted, income would pay in Federal taxes under the rate structures in place in the years 1980, 1990, 2000, and 2010.

Here's the result . . .

Tax OwedEffective RateTax OwedEffective RateTax OwedEffective RateTax OwedEffective Rate
Income19801980199019902000200020102010
$50,000 10,037 20% 15,169 30% 14,000 28% 10,825 0.22%
$500,000 280,678 56% 141,888 28% 182,010 36% 116,013 0.23%
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Old 02-24-2010, 08:06 AM   #42
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Originally Posted by . . . Yrs to Go View Post
All this talk about tax rates over time made me curious about how much we're actually paying versus how much we used to pay. Listening to the "Taxed Enough Already" movement you'd think we're paying much, much more now. So I looked up detailed information on tax brackets (found here) and calculated what someone earning $50K and $500K in taxable, CPI adjusted, income would pay in Federal taxes under the rate structures in place in the years 1980, 1990, 2000, and 2010.

Here's the result . . .
Should the last two year column headers to the right of the table be filled in as "2010" ?
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Old 02-24-2010, 08:44 AM   #43
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Should the last two year column headers to the right of the table be filled in as "2010" ?
Yup. Fixed.
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Old 02-24-2010, 08:45 AM   #44
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Now add in state and local taxes to the mix as well as property and other taxes.

Add in the user "fees" and add in the stealth taxes like utility surcharges etc.

Notice the trend.

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Old 02-24-2010, 08:49 AM   #45
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Now add in state and local taxes to the mix as well as property and other taxes.
Not at all sure what that has to do with Federal policy, but you seem to like the chart so feel free to post it a couple of more times.
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Old 02-24-2010, 08:50 AM   #46
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Not at all sure what that has to do with Federal policy, but you seem to like the chart so feel free to post it a couple of more times.
You seem to imply that people aren't paying more in taxes lately which just isn't true if you look at everything.
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Old 02-24-2010, 09:17 AM   #47
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Not at all sure what that has to do with Federal policy, but you seem to like the chart so feel free to post it a couple of more times.
Mandated federal programs require state spending, leading to...yup, more local and state taxes.
The cruelest tax of all though, is the trickle down effect of failed federal programs.
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Old 02-24-2010, 09:32 AM   #48
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In 80's the economy was struggling with the high taxes so thereafter the rates were lowered and the economy started recovering.
Next year it looks like they are going to let Bush tax cuts expire.
There are quite a few federal fees being added to almost everything, I consider the FCC etc as federal. There are also federal laws being enacted which drive up the cost of living, just not as obvious as the 1040 forms.
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Old 02-24-2010, 09:35 AM   #49
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You seem to imply that people aren't paying more in taxes lately which just isn't true if you look at everything.
Even if we have the debate on your terms, the chart you keep posting doesn't support your argument to any great degree. Most of the spending increase you see as a trend occurred prior to 1970 (which is before the start of the data I posted earlier this morning). I suspect that some of that increase during the early part of this century reflects improving record keeping. Do we really know what the state and local governments of Alabama spent in 1910? I doubt it. We have much better records now so all of that spending is included whereas in prior years some of it got missed.

Not to mention that as of 1900 Oklahoma, New Mexico, Arizona, Alaska and Hawaii weren't even states.

Other spending increases reflect things like public schools, libraries, fire departments, paved roads, etc. etc. Are you suggesting we go back to 1900 spending levels with the commensurate service levels? If not, who cares what was spent 100 years ago?

Meanwhile if we look at the same data, from the same source, for the more recent period from 1980 to 2009 it looks like this . . .

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Old 02-24-2010, 11:10 AM   #50
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Halliburton moved to Dubai. Some large company that I cannot remember moved to Zurich.

Plenty of this will happen if they keep thinking-"From each according to his ability, to each according to his need." Don't have to be very old to realize that there is a lot more of the latter than the former, even in the late and great USA.

Ha
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Old 02-24-2010, 01:00 PM   #51
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I can only speak for myself here. But it looks like our marginal tax rate will probably go up at least 4-5% starting in 2011 based on the proposed tax increases. That means a serious pay cut for our household. But it is foolish to think that we will be the only ones impacted. Less money coming in = less money coming out, it's that simple. Any current beneficiary of our spending and investing, such as local businesses, local governments, local schools, and charities, will be negatively impacted as well. I guess, like us, they and the people they support will have to learn how to make do with less.
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Old 02-24-2010, 03:03 PM   #52
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Instead of whining about taxes, let's hear some solutions. I'll start.

We can means test Social Security.
We can means test Medicare.
We can cut benefits for federal employees.
We can cut the defense budget.
We can stop building roads.

(All in unison, "Noooo, we can't cut those! It's not fair/prudent! Those spending categories are sacred cows!" Hence the problem.)
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Old 02-24-2010, 03:07 PM   #53
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(All in unison, "Noooo, we can't cut those! It's not fair/prudent! Those spending categories are sacred cows!" Hence the problem.)
It's a tragedy of the commons problem. No one wants to feel like they are being singled out to bear the brunt of the punishment. In other words, if I'm going to be made to pay more, receive less benefit, retire later, et cetera, I want to make sure everyone else is sacrificing their own sacred cows along with me.

This is why I think there needs to be some across-the-board stuff that spreads the pain at least somewhat more evenly than most of the usual advocacy. I'd be willing to allow my ox to be gored to restore fiscal sanity if I didn't think I was bearing an undue brunt of it relative to everyone else.
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Old 02-24-2010, 03:07 PM   #54
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Instead of whining about taxes, let's hear some solutions. I'll start.

We can means test Social Security.
We can means test Medicare.
We can cut benefits for federal employees.
We can cut the defense budget.
We can stop building roads.

(All in unison, "Noooo, we can't cut those! It's not fair/prudent! Those spending categories are sacred cows!" Hence the problem.)

Not so fast fella, I'm kinda warming up to your number 3.
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Old 02-24-2010, 03:09 PM   #55
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Not so fast fella, I'm kinda warming up to your number 3.
Actually, federal employees had their benefits cut quite a bit in the 1980s when CSRS was replaced with FERS. State and local, on the other hand, often have a MUCH bigger problem than the Feds who already tackled the worst of it, and it's state and local that's busting the budgets.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 02-24-2010, 03:29 PM   #56
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Instead of whining about taxes, let's hear some solutions. I'll start.

We can means test Social Security.
We can means test Medicare.
We can cut benefits for federal employees.
We can cut the defense budget.
We can stop building roads.

(All in unison, "Noooo, we can't cut those! It's not fair/prudent! Those spending categories are sacred cows!" Hence the problem.)
The problem is this: taxes won't increase for 95% of Americans so, as long as they don't have to reach deeper into their purse to pay for those things, why would they agree to cut any of these expenses? Besides half of all Americans don't even pay any federal income tax which makes them net beneficiaries of taxes paid by others, so why would they voluntarily cut expenses benefits?

If you have teenagers and you pay for their car insurance for example, do they give a damn if your rates go up? Probably not. As long as you keep providing the service, the cost incurred to you is not their problem. Now, make them pay for their own car insurance and you can be sure that they will start to care about rate hikes!
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Old 02-24-2010, 03:35 PM   #57
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The problem is this: taxes won't increase for 95% of Americans (and half don't even pay any federal income tax anyways) so, as long as they don't have to reach deeper into their purse to pay for those things, why would they agree to cut any of these expenses?
Loosely translated as, "Those are my sacred cows. Don't touch them."
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Old 02-24-2010, 03:39 PM   #58
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Loosely translated as, "Those are my sacred cows. Don't touch them."
This was a predictable outcome of a society which produced many new taxing and spending programs designed to help one group at the expense of another. Great way to create an us-versus-them mentality, yes?
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 02-24-2010, 03:46 PM   #59
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This was a predictable outcome of a society which produced many new taxing and spending programs designed to help one group at the expense of another. Great way to create an us-versus-them mentality, yes?
There's probably some clever way to apply game theory to the problem. Get some chips, get some cards with budgetary items printed on them, and then pass around the chips to the stakeholders. When the chips run out, that's it.

Of course, then you'd have to decide how many chips there are at the beginning.

Eh, it's an intractable problem. It'll crash when China stops buying our debt.
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Old 02-24-2010, 04:59 PM   #60
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Actually, federal employees had their benefits cut quite a bit in the 1980s when CSRS was replaced with FERS. State and local, on the other hand, often have a MUCH bigger problem than the Feds who already tackled the worst of it, and it's state and local that's busting the budgets.
I agree with this, it's the at the State level now that employee benefit cuts need to be made. But another problem is the feds pushing unfunded mandates down to the States and the States doing the same to the localities. My taxes (total) have gone through the roof since 1980 as I assume, have most others.
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