Taxes are bad (in general)

[Wyldgusechaz]

In this enclave of progressives, I thought i would like to get some feedback.

Taxes suck. They are a necessary evil but they are bad. I realize some level of taxation is necessary in a functioning society but the higher they get, the more damaging they are to that society. Look at Europe.

Using myself as an example: I am incorporated, I pay about $2600/month in Fed tax plus about $25K in quarterly Feds. Plus state. Thats a lot of money. What do I get for it? Its not clear to me.

Now I thought I was gonna have to cough up an additional $50K by 4/17 but I had some weird losses i could carry forward. So what did I do with this money I thought I had to pay in tax? I spent it on fun stuff that I wanted. I got to spend my money in my own way.

People can only do 3 things with their own money: Save it, which is good for the economy; invest it, which is good for the economy; spend it, which is good for the economy. Its all good.

Taxes are bad and i fear that we are heading for more taxation with the newer congress we have in place. And how many here were ensnared in the Alternative Minimum Tax?

Using this site as an example I believe MercurialBliss is an interior designer. I am gonna spend that extra 50K (plus lots more) getting some fun stuff done. If the money went to MB( actually someone like her in my town, if you lived here MB I would have spent it with you ) how is that bad? How many here would have a better financial outlook if people/customers had more money to spend?

I would love some input from people in high tax countries and their thoughts.

 

[surferboy]

this topic is here to basically tell us you have a lot of money, isn't it?

 

[D_Claude_Crowsfoot]

Using this site as an example I believe MercurialBliss is an interior designer. I am gonna spend that extra 50K (plus lots more) getting some fun stuff done. If the money went to MB( actually someone like her in my town, if you lived here MB I would have spent it with you ) how is that bad? How many here would have a better financial outlook if people/customers had more money to spend?

I would love some input from people in high tax countries and their thoughts.

Theres a lot of things to consider here. First, (hypothetically) if there were no taxes, people would have tons of money. This equates to high inflation.
Taxes go to the government to pay for all sorts of things (housing, public education, road construction, war etc.) So taxes are kind of a necessary evil.
The only way taxes can be "bad" is if the taxes are so high that it is inhibiting consumer spending and investing, which will hurt your country's economy.

 

[Lordpendragon]

Look at Europe.

Well yes - but just about every European country comes above the US in quality of life studies. We like Education and Healthcare whereas you seem to love defense and offense.

But I do sympathise with your position. There is a point at which you have to wonder whether we are paying tax for the purpose of funding more government. Essentially the government is saying that we know better than you how to spend your money, and a lot of that will be on ourselves. I think the target point of public sector spend is 36% of GDP. The UK is running at over 40% and they lie about the figures anyway.

We are taxed to fuck here, there's no denying it - $9 a gallon of gas, $11 for 20 cigarettes - I just paid $2500 in air flight taxes. But as my accountant tries to soothe me - you only pay tax if you are making money.

I think the most dynamic economies have the lowest tax rates, and they are pretty much all in the Far East. That's why they will kick our asses sooner rather than later.

 

[Blocko]

Without a government there is no money. Even maintaining a uniform currency system has costs.

So, you can pay your taxes or go back for trading yak cheese for fur hats.

I also come from a country that pays higher taxes than the US and I run a business that has to collect sales taxes. I also get a heap of services, some of which are too subtle even to think about until they're gone.

 

[Ethyl]

But I do sympathise with your position. There is a point at which you have to wonder whether we are paying tax for the purpose of funding more government. Essentially the government is saying that we know better than you how to spend your money, and a lot of that will be on ourselves.

Yes, and our gov't has proven that the best way to spend money is to overspend and borrow from other sources when funds run dry. Is there any reason I should keep paying into Social Security when the gov't has "borrowed" heavily to pay other debts and my generation won't see a penny?

 

[Wyldgusechaz]

Look at Europe.

Well yes - but just about every European country comes above the US in quality of life studies. We like Education and Healthcare whereas you seem to love defense and offense.

But I do sympathise with your position. There is a point at which you have to wonder whether we are paying tax for the purpose of funding more government. Essentially the government is saying that we know better than you how to spend your money, and a lot of that will be on ourselves. I think the target point of public sector spend is 36% of GDP. The UK is running at over 40% and they lie about the figures anyway.

We are taxed to fuck here, there's no denying it - $9 a gallon of gas, $11 for 20 cigarettes - I just paid $2500 in air flight taxes. But as my accountant tries to soothe me - you only pay tax if you are making money.

I think the most dynamic economies have the lowest tax rates, and they are pretty much all in the Far East. That's why they will kick our asses sooner rather than later.

Very cogent reply LP. I agree 100%.

40% is really excessive. My understanding is that there is a level of taxation ( I am talking income taxes) that should be about 16-18% for a strong efficient economy but when it gets above that, it becomes a drag on the economy. Not sure in the UK what the income tax is or the rate. I believe you have a VAT which I don't entirely understand.

Taxes are simply a way, in their purest form, to compel people to give of their labor and industriousness (word?) because as you put it so well, the government thinks its knows better how to spend my money than I do.

Surferboy, yes I have indicated I have a lot of money. Do you see that as a bad thing? That brings up another issue. On a site where folks can extoll the virtues of being well endowed or requiring that their fuck partners be well endowed, which in fact is simply luck of the genes, why is it wrong to express the fact that hard work and ambition has made someone rich? Thats not genetic, thats effort. Isn't money and having a lot of it a good thing? I think it is. To quote Gordon Gecko, *greed is good.* I would hope every one has the desire and drive to grab a bigger piece of the pie year to year as they go through life. Shit and brag about it to boot, who cares? Money to a very great degree ( but not entirely), is the way society recognizes us for our efforts, is it not?

I have learned that money is a great thing, it gives person a greater degree of control over their lives. Thats a wondrous thing without question.

 

[Wyldgusechaz]

Yes, and our gov't has proven that the best way to spend money is to overspend and borrow from other sources when funds run dry. Is there any reason I should keep paying into Social Security when the gov't has "borrowed" heavily to pay other debts and my generation won't see a penny?

MB very few in your generation realize how fucked ( and not in a good way) you are in terms of Social Security. Kudos to you for knowing you are getting hosed big time. I am self employed and pay almost 16% up to about $100k for SSI. I am older than you so when I retire, your generation will be paying for my country club dues. Its a bullshit deal for you, but I ain't giving the money back for sure. Why young people aren't screaming at the top of their lungs at this screw job is baffling.

 

[Lex]

It's not that I pay taxes that bothers me, but rather, that the government does things with my tax dollars that I disagree with and have little say over. I support usin g tax dollars to fund municipal improvements, schools, health care, support for the needy, research, etc. These things would not be possible if the gov't did not have an economic base from which to operate.

My "effective tax rate" (verbatim from my completed return) is around 10% when I file my return (it is higher during the year, and with my itemized deductions, it reduces drastically). I would encourage you to better understand the tax laws so that you do not feel the burden in such a way.

 

[rob_just_rob]

Saving and investing are good for the economy of where you save and invest. If you're buying Japanese equities and euro bonds (since the USD has been in free fall) how does that help the US (or Canadian, in my case) economy?

Ironically, the people who expend the greatest percentage of their incomes on local spending (helping their local economy) are the poorest people. The richer you are, the more mobile your money is. This is something that advocates of trickle down economics don't like to talk about.

 

[rob_just_rob]

this topic is here to basically tell us you have a lot of money, isn't it?

:wink:

 

[rob_just_rob]

The other point that seems to be neglected in these debates is that the wealthier you are, the greater the benefit you draw from a stable society and the infrastructure that's paid for by taxes. If you're penniless and homeless, what does a police service, network of utilities, roads, and court system and regulated markets mean to you? Very little - you've got nothing to lose.

On the other hand, wealthier people draw have a lot more to lose. Get rid of the legal system that enforces contracts, and one's business (and most investments) becomes worthless. Lose the police and court system, and say goodbye to your house and car.

The wealthy spend a lot of time emphasizing how much they pay into the system. And conveniently ignore how much money they make from the same system. I pay a fair amount of taxes because I do okay financially. I don't really begrudge the money spent on infrastructure and providing a basic level of subsistence for poorer people. I recognize that without the infrastructure, I wouldn't be able to earn what I do. I also recognize that starving people wind up costing society at large a lot more than what it would have cost to feed them.

(Expeditions to Iraq and Afghanistan, though... that's another story :wink: )

 

[Wyldgusechaz]

It's not that I pay taxes that bothers me, but rather, that the government does things with my tax dollars that I disagree with and have little say over. I support usin g tax dollars to fund municipal improvements, schools, health care, support for the needy, research, etc. These things would not be possible if the gov't did not have an economic base from which to operate.

My "effective tax rate" (verbatim from my completed return) is around 10% when I file my return (it is higher during the year, and with my itemized deductions, it reduces drastically). I would encourage you to better understand the tax laws so that you do not feel the burden in such a way.

My effective tax rate is about 22%. I know it exactly and I know the tax laws pretty well. Why should I pay 22% and you pay 10%? I pay 12% more than you for a lot of things I don't want. Thats an inequality. This year I am doing even better than last so my effective rate is going to be higher. The last dollar I earn will be taxed at over 35%. I am curious tho. Did you take that extra 12% and give it to charity? Statistics say no. You spent it in your own way which is great.

Taxes represent a burden on the economy. At what level is it an acceptable nuisance and at what level does it become onerous.

Its interesting that people are so uncomfortable discussing money. Why?

 

[dong20]

40% is really excessive. My understanding is that there is a level of taxation ( I am talking income taxes) that should be about 16-18% for a strong efficient economy but when it gets above that, it becomes a drag on the economy. Not sure in the UK what the income tax is or the rate. I believe you have a VAT which I don't entirely understand.

There are many variations but essentially in the main;

Personal Income tax:
Is banded from 10% through to 40%. The first £5225 earned is tax 'free', the next £2230 is taxed at 10%, £2231-34,600 at 22%, above £34,600 it's 40%. In addition is NIC (national Insurance), the rules vary depending on many factors but is typically 11%.

For (limited) companies:

Corporation tax starts at 20% for small companies, the normal rate is 30%. Employers also need to pay NIC contributions for their employees (in addition to what those employees themselves pay) of typically 12.8%. The NIC payments also apply to non limited companies.

VAT (Value added tax) is 17.5% on most items. There are some exemptions and some items are rated lower at 5% or 8%. Nearest equivalant is perhaps state tax?

Taxes are simply a way, in their purest form, to compel people to give of their labor and industriousness (word?) because as you put it so well, the government thinks its knows better how to spend my money than I do.

I'm not sure how taxes are a compulsion to work? Often they are quite the reverse.

 

[Wyldgusechaz]

The other point that seems to be neglected in these debates is that the wealthier you are, the greater the benefit you draw from a stable society and the infrastructure that's paid for by taxes. If you're penniless and homeless, what does a police service, network of utilities, roads, and court system and regulated markets mean to you? Very little - you've got nothing to lose.

On the other hand, wealthier people draw have a lot more to lose. Get rid of the legal system that enforces contracts, and one's business (and most investments) becomes worthless. Lose the police and court system, and say goodbye to your house and car.

The wealthy spend a lot of time emphasizing how much they pay into the system. And conveniently ignore how much money they make from the same system. I pay a fair amount of taxes because I do okay financially. I don't really begrudge the money spent on infrastructure and providing a basic level of subsistence for poorer people. I recognize that without the infrastructure, I wouldn't be able to earn what I do. I also recognize that starving people wind up costing society at large a lot more than what it would have cost to feed them.

(Expeditions to Iraq and Afghanistan, though... that's another story :wink: )

There are very few in America starving. Quite the contrary we are grossly overweight. There may be some homeless who are due to mental illness and drug dependency but no one is starving. Thats why poor people COME to America. To stop being poor. Go to a McDonalds today. They are all manned by immigrants.

And seriously, how the fuck would an able bodied person be penniless and homeless in America? We have zero unemployment as does the UK, Sweden and a few others. The economy has never been better.

 

[dong20]

Its interesting that people are so uncomfortable discussing money. Why?

We're discussing tax regimes not personal finances and in general terms, who's uncomfortable?

 

[Wyldgusechaz]

There are many variations but essentially in the main;

Personal Income tax:
Is banded from 10% through to 40%. The first £5225 earned is tax 'free', the next £2230 is taxed at 10%, £2231-34,600 at 22%, above £34,600 it's 40%. In addition is NIC (national Insurance), the rules vary depending on many factors but is typically 11%.

For (limited) companies:

Corporation tax starts at 20% for small companies, the normal rate is 30%. Employers also need to pay NIC contributions for their employees (in addition to what those employees themselves pay) of typically 12%. The NIC payments also apply to non limited companies.

VAT (Value added tax) is 17.5% on most items. There are some exemptions and some items are rated lower at 5% or 8%. Nearest equivalant is perhaps state tax?



I'm not how taxes are a compulsion to work? Often they are quite the reverse.

Wow. Seems really high. However tho my understanding is the UK is an absolute economic dynamo. Thats amazing in light of what seems to be a high tax rate.

From what I have read, New York, the Far East and London are THE places to be if you want to make your economic mark. London attracts the best and brightest from Europe because its the one place in Europe that a person can live his/her dreams.

I can only guess that the rest of Europe must be way worse in terms of taxation so thats why London gets the best and brightest.

 

[dong20]

There are very few in America starving. Quite the contrary we are grossly overweight. There may be some homeless who are due to mental illness and drug dependency but no one is starving. Thats why poor people COME to America. To stop being poor. Go to a McDonalds today. They are all manned by immigrants.

Starving, perhaps not but malnourished and living in appalling conditions for sure, open your eyes next time you're out.

And seriously, how the fuck would an able bodied person be penniless and homeless in America? We have zero unemployment as does the UK, Sweden and a few others. The economy has never been better.

Actually the last time I checked the US has an 'official' unemployment figure of 4.5% though the real figure is probably near 12%. The figure in the UK is about 5%. Low, yes but far from zero. Economic strength is extremely subjective depending on one's postion on the ladder.

I'm glad you're doing well but don't insult those less fortunate by implying even indirectly that they only have themselves to blame, there are many factors that determine one's overall economic well being, income is only one of them.

 

[Ethyl]

MB very few in your generation realize how fucked ( and not in a good way) you are in terms of Social Security. Kudos to you for knowing you are getting hosed big time. I am self employed and pay almost 16% up to about $100k for SSI. I am older than you so when I retire, your generation will be paying for my country club dues. Its a bullshit deal for you, but I ain't giving the money back for sure. Why young people aren't screaming at the top of their lungs at this screw job is baffling.

A lot of us aren't screaming because we've watched our parents battle the gov't for years without much to show for it. My mother was forced into early retirement because of her debilitating arthritis. That was almost 4 years ago when she applied for Social Security. She's still waiting on a judgment. This is just one personal example. I don't mind paying taxes at all but I tire of the gov't telling us their plans for the money and you find out much later what they actually do with it.

Taxes represent a burden on the economy. At what level is it an acceptable nuisance and at what level does it become onerous.

When we're told from someone in a much higher income bracket level that they sympathise with our position but sure as hell don't mind using us as a fiscal buffer when they're old.

Its interesting that people are so uncomfortable discussing money. Why?

Obviously I have no problem with it.

 

[dong20]

Wow. Seems really high. However tho my understanding is the UK is an absolute economic dynamo. Thats amazing in light of what seems to be a high tax rate.

From what I have read, New York, the Far East and London are THE places to be if you want to make your economic mark. London attracts the best and brightest from Europe because its the one place in Europe that a person can live his/her dreams.

I can only guess that the rest of Europe must be way worse in terms of taxation so thats why London gets the best and brightest.

They are the basic rates, of course there are ways to reduce these figures but for those on PAYE it's less easy to do. London is certainly economically vibrant but like any large city there is a huge gulf between those earning hugely and those at the bottom. As Rob says those at the top are in a better position to minimise their liabilties and move money into tax efficient areas even allowing for basically high rates.

If it makes you feel better, the highest tax rate used to be 83%!