Regarding the progressive tax system and the graphic that Ustwo posted:
Although the percentages in that graphic are true, there is no context in that which makes it misleading bullshit. The numbers are taken from the IRS website. The thing that is wrong about it is set up so that you look at these numbers and say "hey half of the country is paying for the other half's free ride"
We had a pretty lengthy thread about this here is a reply I posted on it:
http://www.tfproject.org/tfp/showpos...8&postcount=91
Quote:
I knew this would get thrown out there eventually. It's the classic Rush approach, throw a number out with no context and talk about how the middle class and poor are getting some free ride from the rich. The truth is much different than what Rush tells you.
http://www.irs.ustreas.gov/pub/irs-soi/01in01ts.xls
Looking at 2001 numbers only, you see this (I know it's hard to read but I can't get the columns to line up):
class, tax share income share adj gross income
top 1%, 33.89% 17.53% 293k
top 5%, 53.25% 31.99% 128k
top 10%, 64.89% 43.11% 93k
top 25%, 82.90% 65.23% 56k
top 50%, 96.03% 86.19% 28.5k
Those numbers are high because each class includes now look what it's like if you remove the tier above:
group tax share income share income range
0%-1% 33.89% 17.53% 293k < income < infinity
1%-5% 19.36% 14.46% 128k < income < 293k
5%-10% 11.12% 11.64% 93k < income < 128k
10%-25% 18.01% 22.12% 56k < income < 128k
25%-50% 13.13% 20.96% 28.5k < income < 56k
Things get even really fast. Two groups pay more than their proportional share of the tax burden, the ones making more than 99% of all Americans and the ones in the 95-99 percentiles. The people in the 95-99 aren't even paying that much more, compared to their income, and since their is such a large gap between the bottom and top of those groups, most of the disproportionality comes from those closer to the top 1%. Once you fall to the 5-10 percentile, you are already paying a tax rate that is nearly perfectly proportional to your income.
Looking at it this way, how is our current system THAT unfair? The only ones getting huge breaks are those making less than 28.5k per year. Should we really risk economic havoc so that people making over 300k can have it easier?
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Looking at those numbers Ustwo posted and including the the income generated by that top 50% wage earners you see that although the top 50% of wage earners are paying 96.03% of the taxes
they are also making over 86% of the money. Does the Windbag (Rush) tell you that those people are also making almost all the money? Of course not. Saying that would prove that the tax system
is fair and blow his arguement to shit.
On to the idea of a National Sales Tax. This has to be one of the biggest scams ever put on by the haves to screw the have nots. This system would only bring in money on sales taxes. Say there are two people, Bob and Dick. Bob makes 60k and is in the top 10% of wage earners and Dick, who makes 300k is in the top 1%. The national sales tax is 30%. 60k isn't that much, therefore Bob spends 95% of his money (saving 5% for retirement) and Dick spends only 70% of his money. With a sales tax system, 30% of Bob's income goes towards taxes. Since Dick only spends 70% of his money, his tax rate is reduced to 21%.
Dick's group used to pay well over 21%. Currently, they pay over 30%. Now they pay 33% less. The govt still needs just as much money to operate without making HUGE cutbacks (laying off federal emplyees) so who has to absorb that loss of Federal income? Bob does. In the end the rich get richer and the middle class and poor get screwed.
Quote:
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Originally Posted by seretogis
Both the CNN/Money writer and Cato Institute agree that a transition to a VAT would be followed by sharp drops in price of goods and services, so a loaf of bread would cost relatively the same before and after such a system is implemented.
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Ideally, the corporations would respond to lowered expenses with an equivalent reduction in prices. Although prices might drop a litte, don't you think that they are going to hold on to some, if not at least half of that money? Also, the lowered prices only reflect the amount of corporate taxes paid. The govt still needs that money. The sales tax has to account for that
plus what they used to collect in income taxes. It goes with the saying "Figures don't lie but liars sure can figure"
One more thing about sales taxes, what about the people who paid income taxes all their lives and are now living off their retirement money? As long as they weren't making money, they weren't paying taxes. If the National Sales Tax is 30%, you just took 30% from Grandma and Grandpa.
On to the Flat Tax garbage:
This is simple. Unless the govt cuts funding significantly they will need just as much money. Now if we cut the taxes on the rich by half, who has to absorb that money? Oh it the middle class and the poor.
People have this big pipe dream that there is some magic system that can make paying taxes fair for everyone. It just isn't like that. Right now, our system is fair for anyone who isn't in the top 5%. The people in the top 5% pay taxes that are disproportionate to their incomes. As a result, the people on the bottom are able to survive (I'll add that the top 5% are the ones paying the bottom 5% slave wages that people can barely live on).
The rich are tired of paying their share and now they want to pass a system that allows them to keep more of their money. We'll end up with a system that is only fair for 5% of the population. That's great.
One other thing to consider is that taxes are deeply rooted in the economy. How many people out there work in fields that only exist because of taxes? I'd bet there is at least a half a million such people. If we eliminate their reason for work that is 500k people looking for new jobs that aren't out there.