What your Country can do for you.

Discussion in 'Politics' started by Drifterwood, Jan 19, 2012.

  1. Drifterwood

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    National Taxpayers Union - Who Pays Income Taxes?

    Half the citizens pay 98% of the tax. How should the other half contribute to their society for the benefits it affords them?

    Yes. This is a deliberately provocative thread, provocative in terms of exercising our minds and not our venom, please. I am being Devil's advocate. The pay is good as always for advocates :wink:.
     
  2. Jason

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    It's a shocking figure.

    let me try a provocative response. People have a duty to do all they can to keep fit - so they can work to a later retirement, not take long term disability benefits, not have as much medical treatment. By keeping fit they both contribute more and take less.

    So let's start by the whole nation stopping smoking. In the short term massive tax increases and a ban on smoking in all public places and private places where children are present - then complete ban. Let's really get to grips with the drug problem (big issue I know). A real clampdown on alcohol abuse including price hikes. Better provision of fitness facilities - let's build some swimming pools. Better health education. Tax on sugar. Better food labelling, including in most restaurants, and real clampdown on fat content in food.
     
  3. joyboytoy79

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    Drifter, those figures are interesting, but they only tell part of the story.

    One of the major tenets of the progressive tax system is the concept of "tax burden." When people point to the bottom 50% and say "look at those guys on easy street, barely paying taxes" they ignore that $32,000 is barely a living wage.

    This site (which is truly non-partisan) breaks it down another way. It has a calculator that shows your actual taxed percentage, as well as the $ amount in taxes you pay, based on income. Let's consider that $32,396 is the median income of the country. Half of the wage earners in this country earn less than that amount, and half earn more.

    A person earning $32,396 pays $4,434 in taxes. The median monthly housing payment for home owners in 2009 (the latest data available), was an even $1000. If we expect that the median wage earner would pay the median housing costs, then he/she is paying $12000/year in mortgage payments. After taxes, that leaves him/her with $15,962 to pay for transportation costs, utilities, food and clothing. That's feasible, but tight.

    Now lets look at quartiles. If we assume that income follows a normal distribution, the 25th percentile (Quartile 1) is at about $13,750/year, and the 75th (Quartile 2) percentile is at about $51,250/year. If you know anything about statistics, you're going to notice about now that income is skewed quite a bit to the right. (source)

    Our Q1 lady or gent can be expected to pay about $1,638 in taxes. The 1st Quartile for housing payments is $550, for a yearly total of $6600. That leaves Q1 guy or gal with $5,512/year to spend on transportation costs, utilities, food and clothing. That's getting a bit tough, don't you think?

    Our Q3 lady or gent can be expected to pay about $8,938 in taxes. The 3rd Quartile for housing payments is $1,125, for a yearly total of $13,500. That leaves Q3 guy or gal with $28,812 for transportation costs, utilities, food and clothing. That doesn't sound unreasonable at all.

    Let's examine the extremes, now. Let's look at the 5th percentile, and the 95th percentile. The 5th percentile is under $2,500/year. The 95th percentile is over $100,000/year.

    A person in the 5th percentile pays $250 in taxes. He or she can't afford a home, and so lives with parents, siblings, friends - usually only paying for food, when possible. He or she can't afford a car, and so relies on public transportation - still spending an average of $2.00/day (based on my personal experience with public trans) to get to/from work. Even after receiving food stamps, there is no money left over for utilities, let alone clothing.

    A person in the 95th percentile pays more than $21,617 in taxes. He or she can expect to pay around $1,500/month in housing costs, for a total of $18,000/year. That leaves 95% guy or gal with more than $60,383 for transportation costs, utilities, food and clothing. That sounds pretty easy, if you ask me.

    In conclusion: Yes, the top 50% of wage earners pay much more in income tax than the bottom 50%, but the burden of those taxes is far less than the burden placed on the bottom 50%, and that's the side of the story places like the National Taxpayers Union leave out.
     
  4. dude_007

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    non-partisan group my ass
     
  5. Drifterwood

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    Stats Geek. :wink:

    Actually, my reaction as a bit of a cost benefits analysis geek, is that it isn't worth taking any tax at all from the lowest earning 50%.

    Another interesting element to this, IMO, is what percentage of us will actually fully cover our cost to society in the tax we pay? It isn't the top fifty percent for sure, because the whole amount has to be covered by 50%. Perhaps you could say those who produce 75% of the tax which would be around 15%, but then you would have to exclude (in the UK certainly) any high paid public sector people because of the value they keep taking out in the form of their index linked pensions.

    So I would guess that only around 10% are nett contributors to your country's financial requirements.

    I take a couple of things from this. You can't judge contribution purely by tax payments. Most of the non nett tax contributors contribute in other ways, mothers, public sector workers, the military, teachers etc etc and your low paid workers. All these people will cost us something somewhere along the line, but this is the pay back for having done those jobs which allow us to function commercially and socially.

    The other is dealing with the financial mess that we have, because we need lower costs and more revenue. For sure, there are those who take because our system (certainly in Europe) allows for abuse, but the numbers really aren't as high as the rabid right would have us believe. However this number does need to be kept as low as possible. More importantly is to get more people up the ladder, either into the 50% or into the 25%, even into the 10 and 1%. This means having a successful and sustainable economy and valuing the successful.

    I do appreciate that the numbers would change :rolleyes:
     
    #5 Drifterwood, Jan 19, 2012
    Last edited: Jan 19, 2012
  6. Redwyvre

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    I took a quick glance at the table and it isn't clear to me what the percentages really mean. When I added up the figures on the last column I got 353.16. I was expecting something closer to 100. Also isn't an underaged child considered a citizen, yet I don't think they are expected to contribute. And then as Romney is pointing out income earned from wages is not the same as income earned from an investment so it is taxed at a different rate.
     
  7. joyboytoy79

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    Actually, I'm nothing much of a stats geek. But I do seek honest representation in numbers.
    I'm with you there. Tax payments only show fiscal value. They speak nothing of productivity. Low-wage factory workers may need public assistance in order to feed their families, but they provide the rest of us with low-cost goods that we need/desire. There's a trade-off. It's important for that trade-off to be discussed and understood by those who manage public policy, as well as the public at large.

    Upward mobility has long been the benchmark of a healthy economy. Still, there are those who prefer to remain in the lower 50%. The low-wage factory worker I mentioned earlier may very well enjoy his/her job. He/she might be anxious about new responsibilities and unknown working conditions if he/she was to move onto something "better." I think we, as a society, need to be willing to redefine what "success" means. Can one be successful, and still require public assistance in housing or food costs? I think so. Likewise, I don't think some of the millionaires out there are all that successful at all. Success has to include some dimensions other than just financial standing. We, as a society, need to be willing to accept success in measures other than just money made in order for "valuing the successful" to be a worthwhile endeavor.
     
  8. joyboytoy79

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    It's a little confusing, yes, but it is accurate. It goes like this:

    The top 50% INCLUDES the top 25, 10, 5, and 1 percent. So, simply adding up the numbers will not give you 100%. However, if you add the top 50% and the bottom 50% you will get 100%.

    Also, the data only considers income earners. It is not representative of the entire population. Under-aged children are included (down to age 15) provided that they have a source of taxable income. Yes, that means that if Mitt Romney's son had a job as a news-paper delivery boy at age 16, he would be counted in the bottom 50%, even though he lived in a mansion.
     
  9. houtx48

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    you need to break it down farther retired people, people to young to pay taxes, just make a blanket statement 1/2 the people pay 98% of the taxes is probably misleading.
     
  10. OhWiseOne

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    How bout we do this. Find your personal comfort zone and work towards it if you are not there. Instead of looking for others to blame it on. I am so sick of the poor me the man is pushing me down bull shit.
    Taxes will never be fair across the board. Deal with it I do.

    Thank you moving on now.
     
  11. Drifterwood

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    My gut feel is that it would be great if you could work towards an ever decreasing percentage being able to afford the entire bill.

    But is this fair and would you be engineering and restricting the available lifestyle choices of people who are earning large amounts of money? I suppose the answer to that would depend both on the amount of Government and social services you thought were both fair and needed.

    Personally I think that healthcare and education should be free to all, so I would not be reducing the number paying tax until that was provided. On the other hand, I consider it a fundamental of a free capitalist society that you should not pay more than 49.9% in tax.

    In the UK we used to trade off lower working pay for the same job in the Public Sector for more job security and a fantastic inflation proof pension. For some reason, we kept the benefits and decided to pay the Public Sector worker more for the same work, than the private sector worker. This clearly upsets the fairness and balance of our system, yet there will be an unholy fight to redress the situation.

    It concerns me that this debate is never held with the consequences of the balance between how much and who pays for what then determining so much of our lives. I like to know what the deal is.
     
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