Like I said, what one thinks should be provided free by the government and what is fair are his personal opinions, so do not foist your fair share concept on someone else.
That example in Boglehead was hypothetical and heavily relied on many deductions and the mathematics practically screamed "torture". To get to a 15% tax rate the couple had a $44000 401k contribution on a 190k salary, $12000 mortgage interest deduction, maximum capital loss carried forward, $8000 charitable donation, and tuition credits etc.
they cited examples that entailed a fair bit more taxes paid, even for people with much lower income than the couple with the hypothetical 200k income.
I think the original thread title of "What else can they take away?" puts the topic more in the Fire & Politics arena than Fire and Money.this thread seems to be drifting away from having much to do with FIRE and it's NOT even the FIRE Related Political Topics forum, this is FIRE and Money.
I keep hearing this response to voluntary donations to the Feds, that 'everyone needs to do it', no one can make a difference on their own.
But how come it doesn't work that way with other voluntary donations? Most of us have donated to Red Cross, Salvation Army, Heifer and/or others, and we didn't need a law that forced the majority to donate to that same charity. How's that work?
So, the percent of people that do not pay federal income taxes due to IEC and other credits IS close to 50%...
I suppose it does become political to an extent because we are no longer speaking of personal strategies (e.g., the 4% rule or our own AA) or what we spend our money on (budgets). Instead, we are arguing about what is "fair" or "right" or "good" or even "equal". These value judgements nearly always lead to politics (or religion).
That was exactly my point. You are certainly entitled to your own value system and opinions, and to tell everyone your preference, particularly in a discussion board such as this. I was just objecting to the adding the judgement "fair" to your comment. Like you yourself say, it is your personal feeling and judgement, and until you said directly just now, adding that evaluation to your opinion without qualification implies others who have a different take are unfair.Well this is a discussion board and part of what make discussions interesting is the ability to talk about different viewpoints. Even ones that we disagree with. It would be very boring if everyone had the exact same opinion.
Good point. When I said "fair" I was speaking about my personal feelings and I certainly don't expect everyone to agree with me. And I don't think worse of anybody if they draw their own "fairness line" at a different point.
Is that better or worse than being called "headcount?"
None of the deductions are particularly esoteric or rare. And I as said, my personal tax returns are not hypothetical and I'm paying relatively low tax rates (~20% including federal, state, property, payroll).
Sure I have no doubt that many people pay more in taxes at the same income level.
I think this is part of the problem that because of so many deductions you can have people with very high income paying low rates. This goes back to the motivation in the article posted by the OP (cap deductions for high income earners) and also various ideas discussed in the media before the election.
The quote I was responding to ("those of us left in the 50% who actually still pay taxes") didn't distinguish between the various types of taxes. Money is fungible so does it really matter what bucket it goes into as long as they are filled?
.....The quote I was responding to ("those of us left in the 50% who actually still pay taxes") didn't distinguish between the various types of taxes. Money is fungible so does it really matter what bucket it goes into as long as they are filled?....
Just the little that I see for the example, it is not that typical...
What income level do you have to get this 20% I know that my boss pays about 27% just in federal taxes... I, on the other hand pay close to 6% due to deductions and education credits... (it will go up to about 13% when I lose some of these credits)..
One of the problems that I see with people that talk about how someone who makes big money pays 'little' taxes... is that the gvmt thought that giving these breaks were a good investment....
When most people say 'taxes', they are talking about income taxes... and for gvmt accounting, yes it does matter which bucket it goes into...
I think it is very different. IMO SS "taxes" are more premiums to a government mandated life insurance/disability insurance/retirement pension program than a tax. If you die, your dependents get benefit payments; if you become disabled, you get benefit payments; if you live to retirement age, you and your spouse get pension benefits. One way or another you get something for what you contributed (and it may be much more or much less than what you contributed, depending on your circumstances, so it has an insurance angle to it in that risks are pooled).
With income taxes the "benefits" are much less direct and much more shared (national defense, infrastructure, etc).
That's all fine-and-good, photoguy, but in the end, it is quite difficult to see happen in reality. The pursuit of FI can be undertaken devoid of morality, aiming for whatever is best for one's self and one's own - period. That's a valid perspective which people are entitled to hold to. On the other hand, many folks temper the pursuit of FI by discounting the value of actions that might serve them well, personally, but only at the expense of something vital - in effect, their humanity. Given that, the only way to achieve the manner of interchange you described is to establish a general consensus that the practices of Scrooge and Gandhi, and of everyone in between, are equal in regard.
I view compulsory payments to the government as a tax (isn't that the definition of tax?). But there's definitely an insurance aspect to SS as you state. However I believe it's more accurate to view it as a social welfare program. Your payments under SS are only loosely tied to the benefits and folks with lower income have much higher payouts.
I'm not sure how to phrase it differently. It's about the feasibility of what you suggested... about what stands in the way of it.I'm not sure I'm following you here, can you rephrase?That's all fine-and-good, photoguy, but in the end, it is quite difficult to see happen in reality. ...
I think we are in the early stages of the government raising money right now they are looking at income. One day they will also look at assets too. Something like you have $xxxxxxx at your brokerage you don't need your full social security.
rec7 said:I think we are in the early stages of the government raising money right now they are looking at income. One day they will also look at assets too. Something like you have $xxxxxxx at your brokerage you don't need your full social security.
I wonder if they ever look at functioning arms, legs, and a decent IQ as assets.
Gatordoc50 said:I wonder if they ever look at functioning arms, legs, and a decent IQ as assets.
But there's definitely an insurance aspect to SS as you state. However I believe it's more accurate to view it as a social welfare program. Your payments under SS are only loosely tied to the benefits and folks with lower income have much higher payouts.
While there certainly is a social welfare aspect to SS, we'll have to agree to disagree on whether it is predominately an insurance/pension program or a social welfare program.
I would definitely not agree with the last part - folks with lower income have lower payouts and folks with higher income have higher payouts. It is true that lower income folks get higher payouts relative to their contributions, but their absolute payouts are definitely lower than higher wage earners.
I think I have a different view than either of these.
The old age portion of Social Security is an income transfer program. The gov't takes money from current workers and gives it to retired workers.
The benefit to current workers is that they know their parents and grandparents and other old people have some amount of basic income. Moynihan said that the benefit of SS is that your mother-in-law doesn't live with you. That's my view.
37 year-old workers may hope that 30 years from now their kids and grandkids will do the same for them. But there is no guarantee, especially no guarantee regarding a particular formula. The only thing they know for sure is that they are paying taxes today and some older people are getting benefits today.