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The wealthy pay too much in taxes - 3/4/2009 6:12:05 PM

rulemylife

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The argument has been made here that repealing the Bush tax cuts on those making more than $250K per year will hurt the economy.

It seems to fall into two parts.

The first being that the upper income earners are taxed at at unfair rate and the income they pay in taxes would be put to better use by their increased purchasing power to stimulate the economy.

The second being that we should be cutting taxes for the upper income brackets because it will stimulate business investment and economic growth.

This seems to suggest the opposite on both counts:

UBS: 47000 in U.S. used accounts to dodge taxes - Crain's New York

(AP) - UBS AG now says it had about 47,000 accounts held by Americans who didn't pay U.S. taxes on their assets, but Switzerland's biggest bank isn't providing the names of any more of them to the U.S. government....................

UBS has accepted responsibility for helping tens of thousands of Americans hide assets from the U.S. government and turned over the names of about 300 U.S. clients. But the bank is not giving the Internal Revenue Service the names of all U.S. citizens who maintained secret accounts with the bank...............................

"We cannot allow an environment to develop where wealthy individuals can go offshore and avoid paying taxes with impunity," said IRS Commissioner Douglas Shulman........................

UBS on Feb. 18 agreed to pay $780 million in fines and restitution for conspiring to help American citizens violate their country's tax laws by hiding assets — estimated to be worth at least $14.8 billion — from the U.S. government. In the deal struck in federal court in Fort Lauderdale, Fla., the Justice Department agreed to defer criminal prosecution of UBS in exchange for the payment of fines and restitution, and the names of up to 300 U.S. clients.

Post #: 1

RE: The wealthy pay too much in taxes - 3/4/2009 7:00:37 PM

ScooterTrash

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Difficult to decide on this one without details. If the money was earned though regular income or investment returns, it would seem that with financial records being what they are, the income or capital gains taxes would have to be paid on it anyway (when earned), no matter if it was placed in a domestic bank or overseas entity. If it is deposited in a Swiss account and earning interest, I suppose there would be some argument made that cap gains should be paid on the interest however, but it is not clear if that is what they are talking about. Which brings it back to the possible brunt of the problem, the escalated tax rates simply because they make more than the average Joe. This is forcing (or at least pushing) folks with large incomes to seek methods to avoid the extreme tax rates because they are unfair. This is why it makes more sense to have a flat tax rate (pick a number) with no basis on income level. If somone is making 1.5 million per year, why should their percentage be higher than that of say someone making $40,000 per year. The wealthy individual is going to pay a much larger total amount anyway, so why penalize them with not only a higher total amount, but a higher percentage as well, so more of each dollar they earn goes to the government. Make the tax rates fair and I suspect more money would be kept (& spent) in this country and there would not be as great a need to hide it.

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RE: The wealthy pay too much in taxes - 3/4/2009 10:17:11 PM

Hippiekinkster

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The wealthy don't pay enough in taxes relative to the benefits they derive from not only using more government services, but being able to accumulate wealth at a much fsater rate than the middle class due to unequal, regressive treatment of taxes on labor vs. Cap gains taxes.

Here's a good essay on why progressive taxation is more fair:
http://www.ppionline.org/ppi_ci.cfm?knlgAreaID=125&subsecID=163&contentID=1398

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RE: The wealthy pay too much in taxes - 3/5/2009 1:28:13 AM

corysub

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I think the fight by government on every level from local school taxes to the confiscation of earnings by the Federal Government is only going to worsen. It's all smoke and mirrors that "only those households reporting incomes above 250K" are going to feel the burden of increased taxes. We have already seen increases in the tax on consumer items, the States are already strapped for funds and so local taxes will probably have to be raised, the proposed tax on carbon emissions is estimated to bring about $650 billion to the U.S. Treasury..and guess who is going to pay that bill too! The most insidious tax will actually be should the proposal to eliminate the deduction of taxes (read tax increase) for home mortgage interest...one of the last tax advantaged transaction left to the average guy. There was even a tax on mileage driven being considered but the administration backpeddled fast enough on that one to turn ski milk into cream. We all really have to be vigilent and become activists against the tax increases coming our way.

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RE: The wealthy pay too much in taxes - 3/5/2009 2:15:09 AM

VanessaChaland

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Taxes suck but are a necessary evil in order for our society to function. The huge debate about who pays more, who should pay more, whats fair, numbers that are lies, numbers that are based on flawed data, obscured, obfuscated, partisian, whatever.

On this I refer too, and believe, a guy who states that the tax code in the USA is inherently unfair to the poor and favors the rich by means of taxing one group primarily on their very income which they so desperately need for food and shelter, and those whom a good source of remuneration/income is capital gains from investments.

No doubt many would call this guy a crank, an idiot, a moron. Some may say he is confused, partisan and maybe even some poor schmuck who can't make a decent living.

The gentleman that stated this is one Warren Buffet, richest man in the world, who has nothing to gain by stating this as were it (current tax code) to change, he would pay more taxes. All the partisan hacks and talking heads can say what they like, I defer to his wisdom and more so to his honesty. :)

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RE: The wealthy pay too much in taxes - 3/5/2009 4:13:57 AM

mefisto69

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It seems that a simple review of say, the last 30 years would lend creedence to the inherrent unfainess of our current system. The conservative approach has been tax cuts for the wealthy and corporations. They did NOT spend more, they did NOT re-invest in their own business'. They have taken advantage of every available dodge and loophole to hide assets, incorporate offshore to avoid taxes and outsource jobs to maiximize profits. Who here thinks this system should continue ?

(in reply to VanessaChaland)

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RE: The wealthy pay too much in taxes - 3/5/2009 4:51:56 AM

RainydayNE

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quote:

ORIGINAL: VanessaChaland

On this I refer too, and believe, a guy who states that the tax code in the USA is inherently unfair to the poor and favors the rich by means of taxing one group primarily on their very income which they so desperately need for food and shelter, and those whom a good source of remuneration/income is capital gains from investments.

No doubt many would call this guy a crank, an idiot, a moron. Some may say he is confused, partisan and maybe even some poor schmuck who can't make a decent living.

The gentleman that stated this is one Warren Buffet, richest man in the world, who has nothing to gain by stating this as were it (current tax code) to change, he would pay more taxes. All the partisan hacks and talking heads can say what they like, I defer to his wisdom and more so to his honesty. :)

oo :) i must research this :D

(in reply to VanessaChaland)

Post #: 7

RE: The wealthy pay too much in taxes - 3/5/2009 5:28:10 AM

MarsBonfire

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God forbid that the rich person should have to pay taxes anywhere near the same level as their employees.

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RE: The wealthy pay too much in taxes - 3/5/2009 10:27:50 AM

QuietlySeeking

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The top 10% pay 70% of the personal income taxes collected in this nation while only earning approximately 46.44% of the nation's AGI (2005 figures).

For those that won't look at the link, that is people making about $103,000 a year.

The top 25% pays 86% of the taxes....with an income of $62, 068 per year or above.
http://www.taxfoundation.org/press/show/22652.html

The "rich" are paying the lion's share of taxes...

(in reply to ScooterTrash)

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RE: The wealthy pay too much in taxes - 3/5/2009 10:35:49 AM

testtake2

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Joined: 3/5/2009
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quote:

ORIGINAL: rulemylife

The first being that the upper income earners are taxed at at unfair rate and the income they pay in taxes would be put to better use by their increased purchasing power to stimulate the economy.

The second being that we should be cutting taxes for the upper income brackets because it will stimulate business investment and economic growth.

In theory this is a good idea, but in practice no so good.
Those who are in the upper brackets 250k or more, tend to horde rather than spend. Thus those funds are not in circulation but instead sitting in some fat cat's pocket. This doesn't include rappers and jade spoiled rich kids

Making the rich pay Higher taxes is the only for sure way to get them to spend all that cash.

(in reply to rulemylife)

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RE: The wealthy pay too much in taxes - 3/5/2009 10:45:12 AM

QuietlySeeking

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Okay, since the rich "horde" their money, why is average price of a home jumped substantially over the last decade...

Why is the six figure housing market one of the only segments of the market that is still working in its normal timeframe (18-24 months for a sale)?

That pocket that you are saying rich people horde....is the market....it is real property that the rich guy bought....it is the more expensive clothes/houses/food/hand soap/curtains that he/she bought because he could afford it.

When I made $10,000 per year, I thought..."Wow, when I make 20,000 per year, I'll be set." Each time my income level has risen, my expenses have risen to meet it. THAT, my friend, is consumer spending.

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RE: The wealthy pay too much in taxes - 3/5/2009 11:00:07 AM

testtake2

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True that the rich may spend more per item that lets say , you. There is a point when wealth exceeds expenditures(consumer math 101) in which you average person puts into reserve.

Now you have two kinda of people.
Type 1 the responsible type, that puts the money back just in case.
Type 2 the irresponsible type, that spends money just as fast as they make it. (i.e rappers)

With the econ booms of the digital age lots of Americans have become rich over night while others just get poorer, the middle class is diapering. So the division of economic responsibility has shifted. Ill Socialism/Communist propaganda has been a Main stay in this country for the last 80 years because the greedy rich refuse to lose their money and power, thus leading to mass corruption in the government system it self. Who then turn around and make bad choices to keep the Rich happy while the majority of Americans suffer and drop farther into poverty.

Then its Russian Revolution all over again.

(in reply to QuietlySeeking)

Post #: 12

RE: The wealthy pay too much in taxes - 3/5/2009 12:36:29 PM

QuietlySeeking

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Strangely enough, the figures don't match your assertions.

There have been more millionaires and billionaires made in the last two decades than in any other time in American history. The tax rates for the highest income earners was 70% in 1980. In the years since Reagan managed to reverse that highway robbery, the gross tax receipts have continued to increase....and the percentage of taxes paid by the lowest 50% of tax payers has dropped by half.

Let's see, the poor have had their taxes reduced. The rich have had their taxes reduced. The middle class has had their taxes reduced. Somehow, we still having growing tax receipts. The only way that happens is if more people are making more money!

The super-wealthy people tend to be the Type 1 types. So, we save that money, not by putting it in mattresses, but by putting it in savings accounts....which are then loaned to businesses or homeowners wanting a mortgage. Let's say we're irresponsible and spend it; it generates sales for a business, which generates more manufactured goods, which generates more jobs, salaries.

This isn't some simplified economics lesson; it's the way it works. Yes, the rich get richer, but so do some of the middle class people...and even some of the poor people. Some of the poor move into the middle class, which eventually redefines who is poor is who is not. Some of the poor will always be poor due to circumstances within and beyond their control. The same principle applies to the middle class and the rich.

Strange thing about the elected government is....IT'S ELECTED. If you don't like how it works, elect someone who represents your interested. If you can't get enough people to agree with you, figure out a way to convince them. Otherwise, enjoy it; in a few years, you'll be the middle class, moaning and groaning about the amount of taxes you paid to the corrupt gov't...hmmmm, sound familiar?

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RE: The wealthy pay too much in taxes - 3/5/2009 12:44:41 PM

CreativeDominant

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quote:

ORIGINAL: Hippiekinkster

The wealthy don't pay enough in taxes relative to the benefits they derive from not only using more government services, but being able to accumulate wealth at a much fsater rate than the middle class due to unequal, regressive treatment of taxes on labor vs. Cap gains taxes.

Here's a good essay on why progressive taxation is more fair:
http://www.ppionline.org/ppi_ci.cfm?knlgAreaID=125&subsecID=163&contentID=1398

They avail themselves of more government services? I don't see any wealthy people on the welfare rolls, the Medicaid rolls, at the homeless shelters, seeking taxpayer-funded abortions, etc.. So what government services are they getting...paid for with taxpayer dollars...that you cannot avail yourself of?

(in reply to Hippiekinkster)

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RE: The wealthy pay too much in taxes - 3/5/2009 12:51:39 PM

MarsBonfire

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The rich also take their business outside the market whch allowed them to amass their wealth in the first place. So, all the jobs go overseas... consumerisim back home stagnates... people lose jobs... people with home mortgages... the housing loans default, the bubble collapses...and the house of cards topples....

Oh, yes. Let's all blame the lowly home owner. The greed of the rich created this economic collapse, and they should help pay to get us all the hell out of it.

(in reply to CreativeDominant)

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RE: The wealthy pay too much in taxes - 3/5/2009 1:21:58 PM

QuietlySeeking

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Over-consumerism is the boogey-man here.

Buy a house that ten years ago had a price of $400,000; you are welcome to pay $1.5 million five years ago; and then when the housing bubble bursts and the house returns to reasonable prices, as real estate markets has done in many large cities at least once since the 1980's, you have a mortgage you can't afford....and you want John Q. Taxpayer to bail you out?!?

And those poor people who went to AaronsRent and bought the big screen and the furniture and to Joe's Car Sales and bought the biggest baddest car they could "afford"....and now can't afford to pay the loan payments?!?

Even if I lost my job, I would have at least 12 months to search for another without worry, because I've been fiscally responsible. If I had to take a 30% paycut, I could afford to do so, because I haven't over-leveraged myself.

Bail out? Pay my fair share? I paid 5 times as much taxes as someone making 1/2 as much as I did in 2006; you can bet that I will use every conceivable tax advantage I have to stop MY earnings from being thrown into the great big black hole known as the US govt.

If that offends you, so be it. Elect someone who can change it.

(in reply to MarsBonfire)

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RE: The wealthy pay too much in taxes - 3/5/2009 1:32:40 PM

Aileen1968

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From: I miss Shore, New Jersey
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$250,000 combined income is NOT wealthy if you live in NJ. Just sayin...

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RE: The wealthy pay too much in taxes - 3/5/2009 2:07:40 PM

Maya2001

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From: Woodstock ONT,CANADA
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Well someone has to pay those taxes and if it does come from the higher up it will come for those farther down the ladder and you will be like Canada where the middle income earner is constantly getting hit on .. I climbed the ladder from poverty to middle income and once I hit it just crossing over the line I no longer qualified for any of the tax breaks ontop of being taxed heavier I started realizing I have less disposable income than I used to have.

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RE: The wealthy pay too much in taxes - 3/5/2009 2:41:15 PM

awmslave

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I am flat tax supporter. It could be about 10% and the government should not have power to increase it (could be done as a constitutional amendment).
Also, the government should have balanced budget by law. I have no doubt it would create much better society. I understand, of course, something like this can be introduced in US only through revolution considering the current nature of the system

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RE: The wealthy pay too much in taxes - 3/5/2009 3:07:03 PM

QuietlySeeking

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quote:

ORIGINAL: awmslave

I am flat tax supporter. It could be about 10% and the government should not have power to increase it (could be done as a constitutional amendment).
Also, the government should have balanced budget by law. I have no doubt it would create much better society. I understand, of course, something like this can be introduced in US only through revolution considering the current nature of the system

I was a flat tax supporter until about two years ago when I looked at what it would take to implement it.
The tax rate that I applied was 18%, to allow for the current taxpayers to cover all of the existing tax code. The "Rich", those making more than $1,000,000 per year, would actually see a sharp DECREASE in the amount of taxes paid because even on the higher income, they are currently paying higher rates. The "middle class", those making between $65,000 and $1,000,000 per year would see 25%-50% increase in taxes. The "poor", those making less than $65,000 would actually see a 5-10% increase in taxes.

Our graduated tax system may not be great or popular, but it is more effective than a flat tax proposition would be.

Edited to correct typos.

< Message edited by QuietlySeeking -- 3/5/2009 3:10:11 PM >

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