Can someone give me a reasoned answer as to why the rich should pay higher taxes?

[Sarah CB]

And I get really angry when I see this type of reasoning.

 

Just because someone works hard doesn't mean they're going to get promoted, get a raise, whatever. It doesn't always work out that way. Yes, Virginia, there are people who bust their tails and *still* struggle. What an insult, a slap in the face, to assume that people struggle because they're lazy.

 

 

You know, in my post I wasn't comparing and contrasting someone who busts his tail and still struggles with someone who busts his tail and does. I was specifically talking about people who take all of their vacation time, don't work overtime, don't work weekends, don't bring work home, and didn't sacrifice more than four years in university. I was talking about clock-punchers; not those who are busting their tails. There's a big difference.

 

I totally agree with what you've said - it would be an insult if I was making the kind of comparision you insinuated - but, I wasn't.

[Sarah CB]

That's fine, but not all people who make a lot of money work hard, and not all who work hard make a lot of money. For example, my husband doesn't work 100+ hours a week, is home every weekend, and most days after an 8 hour day. He doesn't even have a degree. But he makes six figures. My FIL only has an associates and makes over a quarter mil a year. My husband was lucky in that he had family connections that got him his first job as a programmer at age 16, so he has a hell of a resume. My parents on the flip side were both college educated, my stepdad had a masters degree but barely made ends meet. My mom was working 2 jobs for awhile, and my stepdad was working the 100+ hours a week for a lousy 30K a year job. It wasn't until he decided to be a truck driver he started making any real money. So I disagree with the premise that everyone who makes money works hard for it, or that all who work hard will be rich.

 

I have a lot of respect for people who are willing to work two jobs to make ends meet. There is a concept of "working harder", but there's also a concept of "working smarter". Obviously, when your dad decided to become a trucker he was "working smarter" even though he had been "working harder" for a long time without really getting anywhere fast.

 

What I can't understand are those who aren't willing to work harder but then look at what the person who is working harder has and claim it's not fair.

[Stacy in NJ]

But can we legislate or tax people into being more compassionate? Is that appropriate?

 

Oh goody, you're giving me the opportunity to offer up one of my favorite quotes.

 

"As the state grows and families weaken, it becomes more difficult to remain hopeful that state intervention will not significantly alter the character of the institutions in civil society. This raises a troubling question: When government is relied on to furnish rules of moral obligation, will it weaken the very social ties that make government possible in the first place?"

 

Alan Wolfe, Whose Keeper?: Social Science and Moral Obligation, 1989

[Sarah CB]

BUT, the bigger problem I see is all of us working our way into our corners with our individual sense of entitlement and having indifference toward REAL people struggling.

 

 

 

Kim

 

I've been a "REAL" person struggling. I've been in a poverty trap. My dh had absolutely no help from his parents when he was going through university - he had to completely provide for himself and find his own way. I should have been one of those sad statistics and yet I'm not.

 

I've seen real people struggle and I've seen (and experienced) them not limiting themselves to society's expectations of them. I've seen people who have defied those expectations without any special help or leg up. I've seen people use what is available to *everyone* to advance themselves. I've seen people refuse to sit down - people who keep pushing and pushing until they've achieved something better for themselves and their families.

[joannqn]

This is just false. The wealthiest 5% of Americans pay something close to 50% of federal income taxes collected on individuals.http://www.american.com/archive/2007/november-december-magazine-contents/guess-who-really-pays-the-taxes

 

 

Thanks for that link. What a great article that explains very well, with facts and figures, how lowering taxes (even on the wealthy) actually increases the amount of money that the government has to spend. It explained what I knew instinctually. Tax businesses and wealthy less and more economy stimulating things happen which means more tax money is collected.

[KidsHappen]

Life isn't fair people!

 

This is what I tell my children all the time. Live's not fair, get used to it!

[amy g.]

I really would favor a fair tax. I have a drive to help people who are born into unfortunate situations, but I'm also familiar with some who feel entitled to having "it all" for free.

 

Here is how it works in my family. I was in special ed for dyslexia, but still managed to put myself through college paying my own way. Dh grew up very poor, but also put himself through school. He graduated at a horrible time to get a job, but took what he could get.

 

I started volunteering in college providing Art therapy to kids at the center for battered women while their moms were in therapy. When I graduated, I requested teaching in the lowest income school in the district.

 

Dh worked for bad bosses and crooked companies doing dirty work, but whenever things would really start falling apart, another company would offer him a job because they noticed how smart he is, and how hard he works.

 

When our first was born, I quit work, and things were tight, but Dh kept getting promoted. I started a preschool that provided totally free scholarships for kids in low income housing. I never took a pay check for teaching. Dh bought all the supplies for the school.

 

I also started an afterschool Art class and a summer Drama camp at a nearby low income apartment building.

 

When we moved, and I put the kids in a very expensive private school. Dh told me that we were spending too much money, and were going to go into debt if something didn't change. I got a job at a day care for low income families to help pay tuition.

 

Since we have been homeschooling, I have constantly provided free preschool in my home to other homeschooling families so that other moms have time to focus on their older kids and don't burn out.

 

Dh had continued to move up to one of the top positions in his company. We bought our dream house in the country. The economy is getting worse, and feed prices are going up. Dh again told me that we were going to start going into debt if something didn't change. Within a week, I got a babysitting job one day a week to pay for feed.

 

My sister, on the other hand, had a perfect SAT score, and was accepted into Julliard for voice, but never went to college because she was "tired of people telling her what to do." She has never worked more than a part time restaurant job, because more than that would interfere with her music and her travel schedule.

 

 

She pays $5.00 for the same surgery we pay thousands for. As a low income person, she was offered a position in a class that would teach her every aspect of building a house from start to finish. It was absolutely free. The catch is that it was 40 hours a week. I wonder what I'd have to pay to get an educational opportunity like that for one of my children. When I asked her how the class was going, she said that she never showed up because she "doesn't have time for it". She has never donated an hour or a dollar to charity in her life. She chooses to advocate for the poor only in the voting booth.

 

While she was haranguing me about how evil and selfish I am for not voting for Obama, a friend called me about the non profit we are working on to provide womens health services in our community.

 

Dh and I have worked for everything we ever wanted. We have shared with others at every turn, but to my sister, we are just lucky and ought to be paying more for her as well.

 

I swear, if my dad wasn't dying of cancer, I'd just blow her off.

[emeraldjoy]

I've been a "REAL" person struggling. I've been in a poverty trap. My dh had absolutely no help from his parents when he was going through university - he had to completely provide for himself and find his own way. I should have been one of those sad statistics and yet I'm not.

 

I've seen real people struggle and I've seen (and experienced) them not limiting themselves to society's expectations of them. I've seen people who have defied those expectations without any special help or leg up. I've seen people use what is available to *everyone* to advance themselves. I've seen people refuse to sit down - people who keep pushing and pushing until they've achieved something better for themselves and their families.

 

For every story like yours there is another story that support those "sad statistics".

 

Racism is a real live, in America, occurance and systematically limits choices.

 

e

[emeraldjoy]

Why does it seem that all of the conversations about taxes and the rich always start focusing (tunnel vision) on the area of expenditure that makes up less than 10% of total tax dollars? (Benfits for the poor.)

 

What about defense? or ANY other areas of expenditure?

 

Marginalized idividuals have always been easiest to pick on. I suppose like a pecking order; especially when things get bad (ie:our economy).

 

This is no new thing however. During desperate times throughout history (I think I can safely say) there was always a lower group that took the brunt of it. Always.

 

Emerald

Edited October 16, 2008 by emeraldjoy
spelling

[LilyK]

As was pointed out elsewhere, if one makes a LOT of money and still struggles to pay the bills, "one" needs to take a second look at their priorities

 

As was pointed out elsewhere, not everyone who is poor is lazy. Likewise, not everyone who makes a lot of money and struggles to pay the bills is deficient in prioritizing. Try saving for college for a large family. Try taking care of elderly parents. Try any manner of unforeseen disaster that may have put one in deep debt.

Saying, "you need to get your priorities straight" is similar to telling a poor person, "you need to get off your lazy ..." There are a myriad of situations out there. None of them call for an uneven, unfair tax scale.

[dcjlkplus3]

Well, if taxes were only collected on goods and services and people with less money had to spend every penny they made they would carry the biggest burden. Say there was a flat tax of 10% that would be 10% of everything, but people that make more money could save and invest and lower their tax burden percentage substantially by not spending as much. Does that make sense? I swear I learned this in Econ 101, but I may not be explaining it well.

 

Clearly I am not understanding this.

I remember from economics it being a fact that the more money people have the more money that they spend.

I know that would be true in our case. If we had more money I would be buying all the books we use for school instead of paying library fines. My family would still need to be fed, we would still buy gifts and stuff for ourselves and others. We would also probably have more property and therefore higher property taxes.

It seems to me that no matter how you structure taxes, the wealthy will be paying the vast majority, but it might not have to hurt so bad.

[lighthouseacademy]

Racism is a real live, in America, occurance and systematically limits choices.

 

 

I am not speaking directly to you emerald, and I probably should just keep my mouth shut, but this is really a big pet peeve of mine. My grandfather was Mexican. He was born into a home where his father was absent and the family had 1 wealth and that was a golden pocket watch. The mother would pawn that watch to pay for the expenses of the family. My grandfather would drop out of school, work to get that watch back, and then go back to school. Eventually he worked his way through college while living with a sister AND put his little sister through college at the same time. WWII happened and he joined the US military. All of his expenses were covered and he received a small salary. This was sent back to the US to a bank to be saved. He married after the war and brought his bride home expecting to have some money in the bank to start their new life- he was virtually pennyless because his sister (the one whom he had paid for to go to college) and his mother had taken all the money. He and my grandmother moved into a converted garage and had absolutely nothing- their dining table was the military trunk he had had and they had a few crates for chairs. My grandfather returned to the University thanks to some GI money but didn't finish his Masters because he got a job. He saved and saved and saved. He created wealth and his children and grandchildren and now great grandchildren have benefited from it. Thankfully he was smart and set up trusts etc so that when he passed away 10.5 yrs ago it wasn't all taken away through Estate taxes. My grandfather was Mexican- a typically "descriminated against" group and he started with nothing. He lived the American dream though. His wealth has not only been used to help his postarity but my grandmother has used money to assist others in the community- lower income families. She has given money to help them buy homes, she pays them 3xs the going rate for yard work etc, she bought a young Mexican boy living in a 3 room subsidized shack a computer and gave him a bike so he could get a leg up in school and bought him extra books he needed to learn with. That boy, without her help might not be a Senior at UC San Diego as we speak. She has paid for tutoring for other children who needed help. She has helped MANY poor people far better than any government program could. She has given that leg up that these programs are supposed to do. However, with higher taxes, she has less money to give these helps to those around her.

 

My father is another example (my grandfather was my mom's father). My father was born and raised in Brazil. He came to the US at 15. He never went to college but has a very successful contracting business. He has worked HARD. He started as a framer and over time became a small business owner. He has paid his dues in the school of hard knocks and in the school of effort. I helped him do his taxes a few years ago and his "income" was above this magic $250,000 mark we keep talking about. However, that was NOT his profit or anywhere near what he got for himself. He had to pay employees, worker's comp, the employer share of medicare and social security taxes, etc. We keep talking about the 5% that makes more than $250,000 per year, but we keep skipping over the fact that MANY of these families are not really making that money but are small business owners who are taxed under the personal income tax levels. Taxing my father's business at 55% would RUIN his already slowing business (remember, he is a general contractor and people don't build as much in a slower economy).

The truth of the matter is that we can talk tax hikes for the rich and whine that the poor are paying too much but the truth is that the wealthy don't pay as much in taxes because they know how to shield a lot of the money in trusts and corporations so it no longer becomes personal money and the poor don't pay taxes- most states don't tax food so their overall tax bill truly is limited. It is the working class, especially those in the middle who pay the bulk of the taxes.

[emeraldjoy]

What a wonderful story; truly. Thanks for it and it appears you put a lot of time and effort into telling it. I appreciate that. I do not want take away from it what it deserves and I understand what you are saying.

 

I still feel that racism systematically limits people and their choices and ability to "pull themsevlves up by their bootstraps".

 

I think this issue is so, so, so depthly and I don't think that simple tax solution will fix it, trust me. I am just worried that those whose really don't have much survival left in them will further be marginalized as our society may get more and more desperate due to economical issues. Does that make sense at? I do not believe that blaming the victim will help us get out of our mess any more than overtaxing someone will.

 

My intention with this next question is not to argue or to "one up" you, please know that. I just want to look at this in another way.

 

What if your grandparents didn't have this legacy for you to follow? Where would you be now? What about your children? What if you never even knew you had the options that you do?

 

I was very interested in your argument about the middle class taking the brunt; I think I agree. Everyone, I suppose has a different definition of middle class though, and mine does not include those who make 250,000. It's all relative though, just like everything else.

Blessings to you and again, thanks for your story.

Emerald

[JudyJudyJudy]

My father is another example (my grandfather was my mom's father). My father was born and raised in Brazil. He came to the US at 15. He never went to college but has a very successful contracting business. He has worked HARD. He started as a framer and over time became a small business owner. He has paid his dues in the school of hard knocks and in the school of effort. I helped him do his taxes a few years ago and his "income" was above this magic $250,000 mark we keep talking about. However, that was NOT his profit or anywhere near what he got for himself. He had to pay employees, worker's comp, the employer share of medicare and social security taxes, etc. We keep talking about the 5% that makes more than $250,000 per year, but we keep skipping over the fact that MANY of these families are not really making that money but are small business owners who are taxed under the personal income tax levels. Taxing my father's business at 55% would RUIN his already slowing business (remember, he is a general contractor and people don't build as much in a slower economy).

Your father wouldn't be taxed as making over $250,000. He would be taxed on NET, not gross. That's a big difference.

[JudyJudyJudy]

To answer the question asked by the OP, I'll quote Warren Buffet, the richest man in the world:

 

I did a calculation the other day. Though I've never used tax shelters or had a tax planner, after including the payroll taxes we each pay, I'll pay a lower effective tax rate this year than my receptionist. In fact, I'm pretty sure I pay a lower rate than the average American. And if the President has his way, I'll be paying less.

 

(Like most wealthy Americans, almost all Buffet's income comes from dividends and capital gains, which is taxed at only 15 percent. The receptionist's salary is taxed at almost twice that rate once FICA is included.)

 

The free market's the best mechanism ever devised to put resources to their most efficient and productive use. The government isn't particularly good at that. But the market isn't so good at making sure that the wealth that's produced is being distributed fairly or wisely. Some of that wealth has to be plowed back into education, so that the next generation has a fair chance, and to maintain our infrastructure, and provide some sort of safety net for those who lose out in a market economy. And it just makes sense that those of us who've benefited most from the market should pay a bigger share.

 

When asked how many of his fellow billionaires shared his views, he laughed and said,

 

I'll tell you, not very many. They have this idea that it's "their money" and they deserve to keep every penny of it. What they don't factor in is all the public investment that lets us live the way we do. Take me as an example. I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into. If I'd been born into a tribe of hunters, this talent of mine would be pretty worthless. I can't run very fast. I'm not particularly strong. I'd probably end up as some wild animal's dinner.

 

But I was lucky enough to be born in a time and place where society values my talent, and gave me a good education to develop that talent, and set up the law and the financial system to let me do what I love doing--and make a lot of money doing it. The least I can do is help pay for all that.

 

These quotes came from Obama's The Audacity of Hope, pp. 190-191, but you can read more about Warren Buffet's views here:

 

http://abcnews.go.com/GMA/Story?id=3869458&page=1

 

Besides all that Buffet said, the fact is that in many cases, those making the top salaries are the ones using most of our world's resources (including energy), putting the greatest demand on our infrastructure, putting greater needs on the Federal Reserve Bank, and the list goes on.

[TN Mama]

I really would favor a fair tax. I have a drive to help people who are born into unfortunate situations, but I'm also familiar with some who feel entitled to having "it all" for free.

 

Here is how it works in my family. I was in special ed for dyslexia, but still managed to put myself through college paying my own way. Dh grew up very poor, but also put himself through school. He graduated at a horrible time to get a job, but took what he could get.

 

I started volunteering in college providing Art therapy to kids at the center for battered women while their moms were in therapy. When I graduated, I requested teaching in the lowest income school in the district.

 

Dh worked for bad bosses and crooked companies doing dirty work, but whenever things would really start falling apart, another company would offer him a job because they noticed how smart he is, and how hard he works.

 

When our first was born, I quit work, and things were tight, but Dh kept getting promoted. I started a preschool that provided totally free scholarships for kids in low income housing. I never took a pay check for teaching. Dh bought all the supplies for the school.

 

I also started an afterschool Art class and a summer Drama camp at a nearby low income apartment building.

 

When we moved, and I put the kids in a very expensive private school. Dh told me that we were spending too much money, and were going to go into debt if something didn't change. I got a job at a day care for low income families to help pay tuition.

 

Since we have been homeschooling, I have constantly provided free preschool in my home to other homeschooling families so that other moms have time to focus on their older kids and don't burn out.

 

Dh had continued to move up to one of the top positions in his company. We bought our dream house in the country. The economy is getting worse, and feed prices are going up. Dh again told me that we were going to start going into debt if something didn't change. Within a week, I got a babysitting job one day a week to pay for feed.

 

My sister, on the other hand, had a perfect SAT score, and was accepted into Julliard for voice, but never went to college because she was "tired of people telling her what to do." She has never worked more than a part time restaurant job, because more than that would interfere with her music and her travel schedule.

 

 

She pays $5.00 for the same surgery we pay thousands for. As a low income person, she was offered a position in a class that would teach her every aspect of building a house from start to finish. It was absolutely free. The catch is that it was 40 hours a week. I wonder what I'd have to pay to get an educational opportunity like that for one of my children. When I asked her how the class was going, she said that she never showed up because she "doesn't have time for it". She has never donated an hour or a dollar to charity in her life. She chooses to advocate for the poor only in the voting booth.

 

While she was haranguing me about how evil and selfish I am for not voting for Obama, a friend called me about the non profit we are working on to provide womens health services in our community.

 

Dh and I have worked for everything we ever wanted. We have shared with others at every turn, but to my sister, we are just lucky and ought to be paying more for her as well.

 

I swear, if my dad wasn't dying of cancer, I'd just blow her off.

 

And for a brief moment I forgot all about the rep buttons being gone. Wonderful post.

[Tabrett]

One thing that nobody has mentioned is super rich people (like Paris Hilton) do not pay income tax!!!! You do not pay income tax on interest earned. I'm not sure what kind of taxes people who don't work and live off interest pay. Do you know?

How do we make sure "trust fund" people pay taxes. I personally think we are focusing on the wrong people and it is intentional so we "miss" the super wealthy people who don't pay income taxes.

What is an income of 250k worth compared to millions in earned interest? 250k seems piddly when you look at the super wealthy

[Nancy in MI]

Thanks for the link, but I'm not really pickin' up what that guy's layin' down. :rolleyes:

 

:lol:

[laylamcb]

One thing that nobody has mentioned is super rich people (like Paris Hilton) do not pay income tax!!!! You do not pay income tax on interest earned. I'm not sure what kind of taxes people who don't work and live off interest pay. Do you know?

How do we make sure "trust fund" people pay taxes. I personally think we are focusing on the wrong people and it is intentional so we "miss" the super wealthy people who don't pay income taxes.

What is an income of 250k worth compared to millions in earned interest? 250k seems piddly when you look at the super wealthy

 

You just provided the BEST argument for the Fair Tax: Paris will finally pay her fair share. :lol:

[momofkhm]

The social security tax is only paid on income up to a certain level. That level is adjusted upward annually, but is still relatively low.

 

This is not paid a certain level, it's a certain amount. I can't cite you a source besides dh's paycheck. Last year, dh cashed out stock, a lot of stock, in the beginning of the year. All the sudden there were fewer deductions from his check. He also notices this at a much lesser degree towards the end of the year. Deductions just disappear from his check since he has paid all he has to into each of these funds. It may be adjusted annually, but it still seems to be a flat amount, not apercentage.

[Tabrett]

I really like the idea of a fair tax.

If Paris Hilton bought a 250K sports car in SC she would only pay $300 in taxes!!! That is crazy. It is nice when I buy a a regular car, but it would make more sense to have, let say a 1% sales tax on a vehicles so I would pay $250 in taxes on a $25,000 car and she would pay $2500 in taxes on a 250K car. I don't think that kind of tax would hurt wealthy or poor. There are all kind of loop holes that stop wealthy people from paying a fair share of taxes. These loop holes "look" like they help the poor (like the car tax in SC).

I don't want wealthy people to pay a higher percent in taxes. I just wished they payed the same % with out loop holes and caps.

[Carol in Cal.]

This is not paid a certain level, it's a certain amount. I can't cite you a source besides dh's paycheck. Last year, dh cashed out stock, a lot of stock, in the beginning of the year. All the sudden there were fewer deductions from his check. He also notices this at a much lesser degree towards the end of the year. Deductions just disappear from his check since he has paid all he has to into each of these funds. It may be adjusted annually, but it still seems to be a flat amount, not apercentage.

 

I meant a certain level of income, and you meant a certain amount of income, and they are both the same, conceptually. There is a certain level/amount of income beyond which the feds stop taking any more money out for Social Security. It is adjusted upward annually, which is why I don't know precisely what it is. And if you accidentally overpay, like when you have two jobs and go over the limit, you get the overpayment refunded when you do your income taxes for that year.

[Robin Hood]

I know many people who fall into that category and they are generous to a fault. I don't see why anybody should be taxed more because they make more.

 

If it's the Robin Hood theory of taking from the rich to help the poor, I think that the moral of the Robin Hood story is lost. I always thought that Robin Hood stole back from those in political power what they stole in the first place from hard working citizens.

[lighthouseacademy]

Your father wouldn't be taxed as making over $250,000. He would be taxed on NET, not gross. That's a big difference.

That would be true if he were a corporation- because they get to deduct their expenses BEFORE the report their income. HOWEVER, in many small businesses, they are filed under personal income tax laws. Therefore, like you and I, we don't get to deduct our expenses from our income BEFORE we are taxed- yes we get to deduct certain things to make our tax bracket lower, but we are not taxed on our net, we are taxed on gross minus a few deductions. So, in my father's case, he would indeed be taxed in the above $250,000 per year income bracket because his deductions (mortgage and dependents) don't off-set his "income" enough to make him pay on net.

[Academy of Jedi Arts]

You know- The idea of Obama wanting to take to the rich to give just to the poor is ridiculous. yes, the poor do benefit a great deal from certain government programs, and those programs need to be funded. So do Social Security and Medicare- programs that are not only for the poor. Tax cuts to businesses to go green are going to have to be funded. Health care is going to have to be funded - and not just for the poor. I could go on and on about things this country needs to do to get ourselves back on track. These things are going to cost and the money has to come from somewhere.

 

Where most people get eaten up by taxes is at the local level- NOT at the federal level. I hope everyone is talking local taxes just as much as they are the federal ones.

 

So this "rob from the rich and give to the poor" is just another talking point and nothing more.

[CAMom]

You know- The idea of Obama wanting to take to the rich to give just to the poor is ridiculous. yes, the poor do benefit a great deal from certain government programs, and those programs need to be funded. So do Social Security and Medicare- programs that are not only for the poor. Tax cuts to businesses to go green are going to have to be funded. Health care is going to have to be funded - and not just for the poor. I could go on and on about things this country needs to do to get ourselves back on track. These things are going to cost and the money has to come from somewhere.

 

Where most people get eaten up by taxes is at the local level- NOT at the federal level. I hope everyone is talking local taxes just as much as they are the federal ones.

 

So this "rob from the rich and give to the poor" is just another talking point and nothing more.

 

Is that right?:confused:

 

I'm kind of confused on his tax program now. Last night, after the debate, I heard an "analyst" being interviewed. She said that Obama's claim that he will give a "tax break" to 95% of Americans is misleading because 40% (I think that's the number she gave) do not pay any federal income tax due to their income level.

 

She claimed that, under Obama's plan, those who do not pay any tax at all would be getting a tax rebate check. So, that would definitely be "robbing from the 'rich' to give to the poor. " Those who paid nothing in would be getting something from those who make more.

 

Am I understanding it right?

[JudyJudyJudy]

That would be true if he were a corporation- because they get to deduct their expenses BEFORE the report their income. HOWEVER, in many small businesses, they are filed under personal income tax laws. Therefore, like you and I, we don't get to deduct our expenses from our income BEFORE we are taxed- yes we get to deduct certain things to make our tax bracket lower, but we are not taxed on our net, we are taxed on gross minus a few deductions. So, in my father's case, he would indeed be taxed in the above $250,000 per year income bracket because his deductions (mortgage and dependents) don't off-set his "income" enough to make him pay on net.

Dh is also self-employed and pays taxes as personal income tax. We do indeed deduct our business expenses before we are taxed. If you aren't currently doing that, you need to hire an accountant to help you.

[Mary in VA]

Contributions for Social Security are taken out of the first $102,000 of income. That is the amount for 2008, don't know what it is for 2009. After $102,000 is earned, nothing more is taken out.

 

Mary

[Zelda]

You just provided the BEST argument for the Fair Tax: Paris will finally pay her fair share. :lol:

 

Unless Paris can restore the part of my brain that committed suicide when I stupidly clicked a link to a certain paparazzi photo of her getting out of a car then she will NEVER have paid her fair share.

[lighthouseacademy]

Dh is also self-employed and pays taxes as personal income tax. We do indeed deduct our business expenses before we are taxed. If you aren't currently doing that, you need to hire an accountant to help you.

Yes, you are deducting your expenses but you still do not pay taxes on your net- you pay on your net PLUS the business profits which still shows a MUCH higher total than true gross. Also, when you take deductions, for example even a mortgage interest deduction, you are NOT getting dollar for dollar deductions. You deduct $1000 for interest paid and you don't take $1000 off your tax bill. Furthermore, there are percentages of how much you can deduct off your taxable income or if you can deduct a normally deductable expense on certain things so you still have not arrived at a true net income. For example, my husband is an engineer and although he is not required to have a license in his place of employment it does benefit him professionally and he may need it tomorrow, so, he keeps his CA professional engineering license current and thus pays the state of CA $250 every 2 years. He can't deduct that because it is not a certain percentage of his income- however, it IS an expense we must pay and therefore it part of the gross not the net.

Business profits are not actually yours to spend and thus they are NOT your income but are reported as such. So if we go back to the income tax of a small business owner, he may show an income of more than 250,000 but that doesn't mean the individual is making 250,000 nor does it mean that the business is making 250,000. For the sake of arguement, let's pretend that a self-employed person reports $300,000 on their taxes. That person did not make $300K though. If that person's take home pay was $100K then the business profits were $200K. So, if we raise taxes on those making more than $250K that person would actually pay MORE money than a person who reported $100K and a business who reported $200K. In terms of corporation deductions, as far as I have studied, they can deduct every expense to their business without regard to % of income OR deductible precents. They get to deduct EVERY expense fully and thus can end up with a profit of next to nothing and thus not pay taxes or very little even though the company is making money. This is different from individuals and small business, we only deduct certain things.

[tmkclscroggins]

Just musing::::::

 

If government stopped wasteful spending, would we even be discussing this?

 

How much of the issue is senators and representatives spending our hard earned tax dollars ( both rich and poor) on useless spending. What kind of tax cuts could we all get if this issue was solved. Would our country be in the financial woes that it is today?

 

Why does no one do anything about the overcharging of government. Why should a government facility have to pay 50.00 for a hammer or 100.00 for a toliet seat when we can go to the local hardware store and get both for less then 20?

 

Why do our ELECTED officials choose to not do anything about this?

 

For us moms ( and dads) that have to live on a budget, why should we not expect our government to do the same?

 

I think everyone would benefit from a close look at this. I honestly believe that if we could cut some of this waste, some of the most necessary government programs could be saved. The ones that truly need the help could be helped.

 

It seems we are treating the symptons, not the disease.

 

In answer to your question-----I don't think the rich should be taxed at a higher rate than the middle class or the poor. Life isn't fair and some people, either through hard work or luck have been blessed. We do not live in a socialist country! Do we really want our government have a say in every aspect of our lives? Do we really want government run health care? Look what they've done with the economy!

 

Sorry for rambling!!!!! I think I got seriously off topic!:tongue_smilie:

 

melissa

[Catherine]

Plenty of people work *very* hard and are not rich, or even close to it. There is not a clear-cut relationship between industriousness and wealth. Yes, often working hard and making sacrifices pays off, but sometimes, often, it doesn't. Some factors are beyond individuals' control.

[Nestof3]

If all our taxes are paid through goods and services then the poor would pay a much greater percentage of the taxes because they would have to spend all their money.

 

Why would a poor person have to spend more money that a rich person? It seems to me they would be spending less b/c they have less to spend. ???

[lighthouseacademy]

 

If government stopped wasteful spending, would we even be discussing this?...

 

Why does no one do anything about the overcharging of government. Why should a government facility have to pay 50.00 for a hammer or 100.00 for a toliet seat when we can go to the local hardware store and get both for less then 20?

 

Why do our ELECTED officials choose to not do anything about this?

 

For us moms ( and dads) that have to live on a budget, why should we not expect our government to do the same?

 

I think everyone would benefit from a close look at this. I honestly believe that if we could cut some of this waste, some of the most necessary government programs could be saved. The ones that truly need the help could be helped.

 

It seems we are treating the symptons, not the disease...

 

 

Sorry for rambling!!!!! I think I got seriously off topic!:tongue_smilie:

 

melissa

 

:iagree: I think you are spot on Melissa. The true disease is the wasteful spending- and all the earmarks and ridiculous things that the government spends OUR money on and all the extra bureaucracy that is "needed" to get done what would take the private sector half as much money. How about the 100K self cleaning toilets that the city of Seattle bought and then had to sell on ebay for I think it was 5000 all of them (I am sure my numbers are not quite right) because there was prostitution and drug deals going on where the toilets were installed... talk about tax payer waste!

If you were rambling (which I don't think you were) then I really am because Seattle is not the federal government, but they act like it sometimes.)

[Carol in Cal.]

To answer the question asked by the OP, I'll quote Warren Buffet, the richest man in the world:

 

Besides all that Buffet said, the fact is that in many cases, those making the top salaries are the ones using most of our world's resources (including energy), putting the greatest demand on our infrastructure, putting greater needs on the Federal Reserve Bank, and the list goes on.

 

The whole thing, truly.