Are you the 9.9%?

[Music Lover]

Yeah you are right, I shouldn't have stated it that way. I shouldn't have said only the wealthy take advantage of those breaks, and instead said the wealthy get to take advantage of them, and do so disproportionately compared to the rest of the population.

Well, since poor people pay little or no tax, it only makes sense that tax breaks will "disproportionately" benefit the wealthy because those who don't pay tax can't pay any less than $0.

 

[mrWinter]

I fail to see how our hard work, refusing to get into trouble, and LBYM ethics (even when the "means" were barely enough to get by) constitute something "toxic," as the article's opening lines have it.

I'm really very confident that the article never said anything of the sort. I really think the idea is the exact opposite, and actually very much in line with these ideals you share. Hard work, staying out of trouble, and LBYM is how people should be able to get rich (and of course many people do get there that way today), but unfortunately a major, and increasing, way of getting rich today isn't through hard work, but by having rich parents. And as rich parents make it easier for their offspring to get rich, they make it harder for other parents' hard working kids to get rich. Hard work = reward is the capitalist ideal that the author wants to restore, as opposed to an aristocracy where wealth is handed down and hoarded.

 

[RunningBum]

I didn't read the article as calling individual people toxic, instead saying the system is toxic, and of course individual people are part of that system. I'm one of the discussed cohort and took no offense personally. It seems others interpreted that differently. Agree that the article would likely have attracted more serious readers if not starting out by making some people feel defensive. The author addresses that point later in the article but it may be well too late by then.

OK, the exact quote, and this may have been from the editor and not the author, but it captures the tone of the article:

The class divide is already toxic, and is fast becoming unbridgeable. You’re probably part of the problem.

Not as bad as what I said, but still a bad start unless your intent is to offend/insult people with money, IMO. If I wanted to be charitable I'd say the intent is to make people sit up and take notice, but like I've been saying, it takes a few other pot shots, and doesn't provide much in the way of constructive suggestions.

No I'm definitely not suggesting that and don't think the author is, and thought I had gone out of my way to get that point across in another post. Agree with you, doing so would only harm yourself to no benefit of the whole, tragedy of the commons. Hence pleading with individuals is worthless, the system as a whole needs to be modified.

OK, just checking. I don't think the article suggests that either, nor did I really think you did.

 

[Hermit]

Eh, when RV'ing I turn off the water heater between showers to conserve propane.

Maybe I should look into doing the same at home with the electric water heater.

I would worry about mold growing in the water heater...

 

[RunningBum]

I'm really very confident that the article never said anything of the sort. I really think the idea is the exact opposite, and actually very much in line with these ideals you share. Hard work, staying out of trouble, and LBYM is how people should be able to get rich (and of course many people do get there that way today), but unfortunately a major, and increasing, way of getting rich today isn't through hard work, but by having rich parents. And as rich parents make it easier for their offspring to get rich, they make it harder for other parents' hard working kids to get rich. Hard work = reward is the capitalist ideal that the author wants to restore, as opposed to an aristocracy where wealth is handed down and hoarded.

Well then the article could have been, should have been a lot shorter. Tax all inherited money, with no exemption or tax shelters. One line. A few paragraphs to support it. A few suggestions as to what to do with that additional tax revenue, like improving education. Done. If that was his point, and I did see some mention of this, it get lost in the rest of his pontificating.

 

[RunningBum]

I much prefer the water heater discussion. So please let’s stick to that.

Start another thread about water heaters. Ignore this thread. Problem solved.

 

[ERD50]

... but unfortunately a major, and increasing, way of getting rich today isn't through hard work, but by having rich parents. And as rich parents make it easier for their offspring to get rich, they make it harder for other parents' hard working kids to get rich. Hard work = reward is the capitalist ideal that the author wants to restore, as opposed to an aristocracy where wealth is handed down and hoarded.

Adding to my earlier post, one of the rewards of hard work is being able to help your kids get into good schools, and doing all the things you can to help them be successful (financially and/or by other measures).

So now you want to say I can't use the rewards of my hard work to help my kids get a good start (the rest is up to them)? Each of my kids is probably doing better than me at that age, and I'm very proud of them (they worked hard to take advantage of whatever advantages they got). And they are contributing to society, a nurse, a math teacher, and a Board Certified Oncology Pharmacist.

It's not a zero sum game. And that skewed FIT tax curve is supposed to help the lower economic class with money from the upper classes (which I'm fine with, to a point).

-ERD50

 

[flintnational]

You're defining "fair share" as an equal amount, not an equal percentage as most would. It's absurd to say the fair share of a family making $40K is for them to pay $45K in taxes.

RB, I do not have a problem with taxes tracking income as you show in your post. My point was simply that the author did not acknowledge this. He cherry picked his points to support his belief that the system is unfairly skewed to the wealthy (mortgage deductions unduly benefit the wealthy). I would have been fine if he had taken the income/tax data you presented and then made the case that we should do more to help others. His was an emotional argument not based on facts. And, he included a fair dose of "you should feel guilty" despite his statements to the contrary. And to close, he used a not so veiled threat of civil unrest if the system is not changed. Fair enough, but I would have appreciated a little data to back any of this up.

Finally, I was not advocating that the median family should pay $45k. The math was to show how progressive the system already is. Clearly they cannot and should not pay $45k. But that's the point, they do not.

 

[Chuckanut]

He cherry picked his points to support his belief that the system is unfairly skewed to the wealthy (mortgage deductions unduly benefit the wealthy).



<snip>And, he included a fair dose of "you should feel guilty" despite his statements to the contrary. And to close, he used a not so veiled threat of civil unrest if the system is not changed.

.

Two comments:

The recent change in the tax laws have reduced the advantages of having a huge mortgage. But, yes, the rich have advantages most of us don't and one of them is to to use their wealth to tilt the playing field in their favor. Some do this, others don't. But, it is done (example: a wealthy sports team owner who literally paid for a special election on public financing of a stadium for his team.)

I object to using a single word like 'privileged' to describe a person and/or to lump various people together (usually good folks with the bad). A person's overall being is defined by many things in a person's life: upbringing, attitudes, education, past experiences, beliefs, etc. It is common these days to try and ignore all of that and just use just one word to define a person or group - usually based upon only one part of what makes them who they are. I think that is unfair at best and deceitful at worst.

 

[Huston55]

Yea, I got up way too early just to post this.

Differing from the author, I prefer to use math instead of emotion to determine fairness. The math is as follows:

US population 327,000,000
Annual State, local and Federal governmental revenue $6T*
Annual share per each man, woman and child in the US $18k

So, an average family of 2.5 owes $45K ($18k x 2.5) annually just to cover their share of the costs to run the country. Median family income is currently $60k. Using this measure of fairness, obviously a large number of Americans are not paying their fair share. (Fairness/privilege was the author's premise not mine.)

The numbers above would seem to indicate, as a society, we do a pretty good job of shifting societal costs to the wealthy and away from the poor. But, to authors like this it will never be enough. His idea of fairness is sameness. And as others have pointed out, that is not the human condition.

*Defecit spending puts the number closer to $7T. The above excludes US annual charitable giving of about $390B, with the cost falling mostly to the wealthy and the benefit mostly to the poor or society in general.

You're defining "fair share" as an equal amount, not an equal percentage as most would. It's absurd to say the fair share of a family making $40K is for them to pay $45K in taxes.

A more accurate way to look at it would be using the ntu link ERD posted earlier. I can't get the tables I want to format right so I'll just refer to the link again, https://www.ntu.org/foundation/page/who-pays-income-taxes

Even that link shows it a little skewed. The top 1% pays a disproportionate share and that gets added into the other groups up to the top 50% and skews those grows. The right think to look at is the AGI in the group, and the tax share by that group alone.

Group AGI Share Tax share paid

Top 1%

AGI 20.65

Tax share 39.04

1-5%

AGI 15.42

Tax Share 20.54

5-10%

AGI 11.29

Tax Share 11.01

10-25%

AGI 21.63

Tax Share 16.03

25-50%

AGI 19.73

Tax Share 10.55

Bottom 50%

AGI 11.28

Tax Share 2.83

Sorry, I couldn't get that to format nicely and I've spent enough time trying.

As you can see, 1-5% pays only a little more than their share, and 5-10% is actually very slightly under. Below that is even less.

RB, I do not have a problem with taxes tracking income as you show in your post. My point was simply that the author did not acknowledge this. He cherry picked his points to support his belief that the system is unfairly skewed to the wealthy (mortgage deductions unduly benefit the wealthy). I would have been fine if he had taken the income/tax data you presented and then made the case that we should do more to help others. His was an emotional argument not based on facts. And, he included a fair dose of "you should feel guilty" despite his statements to the contrary. And to close, he used a not so veiled threat of civil unrest if the system is not changed. Fair enough, but I would have appreciated a little data to back any of this up.

Finally, I was not advocating that the median family should pay $45k. The math was to show how progressive the system already is. Clearly they cannot and should not pay $45k. But that's the point, they do not.

Regardless of where one stands on the issue (taxes too high/taxes too low), a discussion of “tax burden” must include all taxes, not just the ‘income’ tax used in these posts. Although a few years old (2012), these graphs represent the actual tax burden of each income group.

 

[flintnational]

^^^My numbers were total taxes including State, local and Federal.

 

[mrWinter]

Adding to my earlier post, one of the rewards of hard work is being able to help your kids get into good schools, and doing all the things you can to help them be successful (financially and/or by other measures).

So now you want to say I can't use the rewards of my hard work to help my kids get a good start (the rest is up to them)? Each of my kids is probably doing better than me at that age, and I'm very proud of them (they worked hard to take advantage of whatever advantages they got). And they are contributing to society, a nurse, a math teacher, and a Board Certified Oncology Pharmacist.

It's not a zero sum game. And that skewed FIT tax curve is supposed to help the lower economic class with money from the upper classes (which I'm fine with, to a point).

-ERD50

I don't think the suggestion is that you can't use the rewards of your hard work to help get your kids a head start, more that you shouldn't get tax breaks for doing so. Feel free to do it and bravo to you, but the government shouldn't be pulling resources from the pool of available taxes to help your kids even more. You've got a stable family home, you teach them LBYM, you instill good work ethic, you get private tutor training, you pay for enriching summer camp experiences, SAT prep etc., all awesome. But you don't need tax breaks for saving for their college, and more tax breaks than your neighbor because you have a more expensive house, and you don't need to leave your kids 5 mil un-taxed to give them a good head start . If we are going to take money out of the pool of taxes to help kids, the rich ones are the ones that need it most, and we certainly shouldn't be pulling more out for them then for less affluent kids.

 

[RunningBum]

RB, I do not have a problem with taxes tracking income as you show in your post. My point was simply that the author did not acknowledge this. He cherry picked his points to support his belief that the system is unfairly skewed to the wealthy (mortgage deductions unduly benefit the wealthy). I would have been fine if he had taken the income/tax data you presented and then made the case that we should do more to help others. His was an emotional argument not based on facts. And, he included a fair dose of "you should feel guilty" despite his statements to the contrary. And to close, he used a not so veiled threat of civil unrest if the system is not changed. Fair enough, but I would have appreciated a little data to back any of this up.

Finally, I was not advocating that the median family should pay $45k. The math was to show how progressive the system already is. Clearly they cannot and should not pay $45k. But that's the point, they do not.

We're in agreement on the tone of the article. I just don't think a raw number is good math on whether the system is progressive or not. IMO percentages are.

 

[Huston55]

^^^My numbers were total taxes including State, local and Federal.

But, not payroll or sales taxes...right?

 

[NW-Bound]

With modern-day technology and globalization of the economy, I think income disparity is increasing in emerging places like China and Vietnam, etc...

These were and still are communist countries! It doesn't seem that they care that much about the rich getting richer. Their poor are truly poor, compared to the poor of Western countries. And their rich are just as rich.

 

[Music Lover]

I don't think the suggestion is that you can't use the rewards of your hard work to help get your kids a head start, more that you shouldn't get tax breaks for doing so. Feel free to do it and bravo to you, but the government shouldn't be pulling resources from the pool of available taxes to help your kids even more. You've got a stable family home, you teach them LBYM, you instill good work ethic, you get private tutor training, you pay for enriching summer camp experiences, SAT prep etc., all awesome. But you don't need tax breaks for saving for their college, and more tax breaks than your neighbor because you have a more expensive house, and you don't need to leave your kids 5 mil un-taxed to give them a good head start . If we are going to take money out of the pool of taxes to help kids, the rich ones are the ones that need it most, and we certainly shouldn't be pulling more out for them then for less affluent kids.

I disagree with the assumption that people's hard earned money is nothing but an untapped pool of tax resources to be used as others see fit.

 

[flintnational]

But, not payroll or sales taxes...right?

The data I used was total governmental revenue from all sources. I wanted to capture everything. That should include payroll and sales taxes.

I agree with you that this discussion often gets framed around partial data that favors one view or the other. IMO, the only way you can discuss tax policy is to view total taxes from all sources and what % each group pays of the total.

 

[Music Lover]

With modern-day technology and globalization of the economy, I think income disparity is increasing in emerging places like China and Vietnam, etc...

These were and still are communist countries! It doesn't seem that they care that much about the rich getting richer. Their poor are truly poor, compared to the poor of Western countries. And their rich are just as rich.

The difference is that only capitalism helps the poor.

 

[brett]

We are in the 9 percent and feel very fortunate.

Taxes? Taxes are high in our jurisdiction but we have no problem with them even though we have been in the top incremental tax bracket for years.

Overall we get good value for our tax dollar and are fortunate to live where we do. I look at this way. We pay higher taxes because we have enjoyed higher incomes and had investing success. Much better to have this than a lower income and pay minimal taxes. Our medical/hospital is covered by tax dollars. Now that one of us is over 65, our jurisdiction picks up as much as 70 percent of the prescription costs for both of us.

 

[Clone]

Also of note, any boat big enough to have a bathroom on it can qualify as a second home so there are millionaires deducting interest on 1 million dollars of their home, as well as another 100,000 of their yacht, and they are getting the biggest tax break.

Tax policy is really tough. It seems that the law of unintended consequences always applies. My experience with the taxing of yachts in the early 1990s was that when a luxury tax was applied to all new yachts, the buyers went to international sources. The immediate consequence in our area was that 30 line workers were laid off at a company that made transmissions, some of which were used in yachts. Nationwide, the yacht industry collapsed, and, by some accounts, 100,000 workers became unemployed.


The Government creates tax breaks to influence purchasing habits, but many people feel this only benefits the rich. The Government creates taxes on the rich, but we immediately see the consequences when the change in tax policy impacts the people producing goods. Plus, to make the topic even more confusing- The Government is controlled by the rich!!


I have been told that I am too white, too male, too old, too rich, and too privileged to be able to understand. Thus, I do not have wisdom to be shared. I am unable to understand the struggles. I AM the problem. When asked what they would like me to do- the only thing they have come up with is that they would like me to contribute money to support their cause.

 

[MichaelB]

Thanks for an interesting discussion
.
.