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Taxes- how much is 'just right'?





ocalhoun
47% of US households pay no income taxes, or even receive more than they pay.
48% of Americans think the amount of income tax they pay is 'just right'


Coincidence? I doubt it.



(Sorry for the drudge re-post, but it was too outrageous to pass up.)

Now, for discussion, what effect do you think this might have on trying to get overall tax rates lowered?
deanhills
ocalhoun wrote:
47% of US households pay no income taxes, or even receive more than they pay.
48% of Americans think the amount of income tax they pay is 'just right'
Coincidence? I doubt it.
(Sorry for the drudge re-post, but it was too outrageous to pass up.)
Now, for discussion, what effect do you think this might have on trying to get overall tax rates lowered?
I wonder what percentage of the 48% Americans who think the amount of income tax they pay is "just right" know how much taxes they are really paying? Maybe they are questioning it as little as they do when the Government passed the 1.2-trillion bail out package, and the Health Reform Bill? Maybe it is all about presentation, and the President's huge marketing campaign focussing on the tax credits and advertising how many families are "scoring" must also help to create a specific "satisfied" mind-set.

I imagine your request for a discussion about how this will be lowering the overall tax rate has to be one of an irony? If the cost of Government is going up all the time, and almost half of the people are not paying taxes, then the balance will probably have to be taxed more, or the Government will have to find more novel ways to tax its citizens?
ocalhoun
deanhills wrote:
If the cost of Government is going up all the time, and almost half of the people are not paying taxes, then the balance will probably have to be taxed more, or the Government will have to find more novel ways to tax its citizens?

Both, likely.

the balance being taxed more: tax increases for those over $250K... or $200K... or whatever it's down to by now.

novel taxes: VAT tax and 'Cadillac insurance plan' taxes.
deanhills
I know this is an impossible dream, however, it would be like a miracle if Government can work on less cost instead. Completely revamp its structure, so that it only has the bare bones in it, delegate most of everthing to the States, so that there would be no duplications, also in legislation. Hold a firesale of all redundant equipment, maybe also of programmes that can be better managed by private enterprise. Streamline Congress and the Senate with only bare bones people in it. Streamline the pay and benefits of members of Congress and the Senate, .... etc.

Technically the Government is bankrupt. That is usually how a Government that is bankrupt should behave. Cut costs to the absolute minimum, and pay off expensive debt first.
Voodoocat
Replace the Federal income tax with a national sales tax, and do not imbed the sales tax in the final price- it must be listed separately on the price tag. If this were to happen, not only would everyone that purchases goods pay taxes (not just half of the population) but they would clearly see the cost of the Federal government. I bet that there would be an uproar when people realize how much they actually pay to run their own government.
ocalhoun
Voodoocat wrote:
Replace the Federal income tax with a national sales tax, and do not imbed the sales tax in the final price- it must be listed separately on the price tag. If this were to happen, not only would everyone that purchases goods pay taxes (not just half of the population) but they would clearly see the cost of the Federal government. I bet that there would be an uproar when people realize how much they actually pay to run their own government.

Sounds like you might be familiar with the FairTax...
Alaskacameradude
Quote:
I know this is an impossible dream, however, it would be like a miracle if Government can work on less cost instead. Completely revamp its structure, so that it only has the bare bones in it, delegate most of everthing to the States, so that there would be no duplications, also in legislation. Hold a firesale of all redundant equipment, maybe also of programmes that can be better managed by private enterprise. Streamline Congress and the Senate with only bare bones people in it. Streamline the pay and benefits of members of Congress and the Senate, .... etc.

Technically the Government is bankrupt. That is usually how a Government that is bankrupt should behave. Cut costs to the absolute minimum, and pay off expensive debt first.


Ya, if only the government had to operate by the same restrictions that we all as families or
businesses have to function by.
socceraggie
What is everyone's opinion on a flat tax? I think there are a lot of good things about this; however, I realize that this is not a simple fix. First, how would we determine a person's income? Would it be the same as it is now. Would passive income be taxed at a different tax rate than active income?

I realized these past few years what a pain our current tax system is when it took me over 20 hours of work personally to finish my taxes and cost me over $1500 in years before that to finish them. Should it really be this complicated or is this just a system designed to keep an entire industry of CPAs employed?
ocalhoun
socceraggie wrote:
What is everyone's opinion on a flat tax? I think there are a lot of good things about this; however, I realize that this is not a simple fix. First, how would we determine a person's income? Would it be the same as it is now. Would passive income be taxed at a different tax rate than active income?

Make a sales tax (eliminating the need for determining income at all), and give everyone a rebate equal to the taxes a poverty-level household would pay. (To prevent it from being regressive.)
Quote:

I realized these past few years what a pain our current tax system is when it took me over 20 hours of work personally to finish my taxes and cost me over $1500 in years before that to finish them. Should it really be this complicated or is this just a system designed to keep an entire industry of CPAs employed?

Another great benefit of a simple sales tax. Far less bureaucratic work involved. The tax code would shrink, and so would the IRS and so would the hassle of filing taxes.

Look into the fartax (linked above). I think you'll like what you see.
socceraggie
ocalhoun wrote:
Another great benefit of a simple sales tax. Far less bureaucratic work involved. The tax code would shrink, and so would the IRS and so would the hassle of filing taxes.

Look into the fartax (linked above). I think you'll like what you see.


I enjoyed reading about this proposal. It sounds very interesting and so much simpler! While there would be challenges, it sounds like in the long run it could be beneficial to many aspects of our government and economy.

On a related note, talking about runaway taxes, I live in Colorado and went to renew my vehicles registration. This is an annual requirement to operate a motor vehicle in Colorado. My wife and I have a relatively new car (2008 model) and it cost me $450 to register the vehicle. This does not include the bi-annual inspection and emissions test that is also required. I found myself driving to work after paying this ridiculous tax and just seeing $$$ on every car I drove by. I did a quick google search and in 2009, 5,067,035 vehicles were registered in CO alone. I should also mention that the registration fee is on a sliding scale (the older your vehicle is the less you pay). So we could probably estimate that mine was on the higher end and there for 5,067,035 * (lets just guess at $250 per vehicle) $250 = $1,266,758,750. THAT's JUST FROM VEHICLE REGISTRATIONS!!!! SERIOUSLY!!!

Sorry for my little rant there. I was just a little pissed when I wrote that check this morning. Thanks for listening.
deanhills
socceraggie wrote:
On a related note, talking about runaway taxes, I live in Colorado and went to renew my vehicles registration. This is an annual requirement to operate a motor vehicle in Colorado. My wife and I have a relatively new car (2008 model) and it cost me $450 to register the vehicle. This does not include the bi-annual inspection and emissions test that is also required. I found myself driving to work after paying this ridiculous tax and just seeing $$$ on every car I drove by. I did a quick google search and in 2009, 5,067,035 vehicles were registered in CO alone. I should also mention that the registration fee is on a sliding scale (the older your vehicle is the less you pay). So we could probably estimate that mine was on the higher end and there for 5,067,035 * (lets just guess at $250 per vehicle) $250 = $1,266,758,750. THAT's JUST FROM VEHICLE REGISTRATIONS!!!! SERIOUSLY!!!

Sorry for my little rant there. I was just a little pissed when I wrote that check this morning. Thanks for listening.
I think there should be a rule that if a car is still under warranty, that it should not need the annual inspection and emissions test. Also, the registration fee should be less for new cars and more for older ones. People should be encouraged to let go of older cars, as newer cars are usually more environmentally friendly, safer, and less heavy on the roads. I think they have it back to front.
ocalhoun
socceraggie wrote:

On a related note, talking about runaway taxes, I live in Colorado and went to renew my vehicles registration. This is an annual requirement to operate a motor vehicle in Colorado. My wife and I have a relatively new car (2008 model) and it cost me $450 to register the vehicle.

Perhaps you should try South Dakota...

The 1st time registration of a vehicle is around $50, and subsequent annual registrations are less than $5... And there is no requirement for inspections and/or emissions tests -- ever.



The only thing I don't like about their process is that they charge sales tax during the registration. They don't care if it was given as a gift or sold for a low amount, they'll charge you sales tax on their (overly expensive) estimate of what the car is worth.
I had to pay $4,500 worth of sales tax on a truck I bought for $2,500 and sold for $2,000. Confused
taytay
I'm not looking forward to paying taxes in the future. Not because I'm not supportive of the government taking care of certain services I can't myself(police, protection, law making), but I'm not very confident in them. At this point I feel the law would be better off if I had an electric fence around my 15 acres of land here in Texas(one day... I want some land. No neighborhoods for me), and shoot any trespassers who show signs of intent to harm, rob, thieve or vandalize in some form of way. Actually, at the rate this country is declining politically, I wouldn't be surprised if the government falls and this is Just what we will be force to do.........

Just sayin
Bikerman
That would be a nice example of what we (in the UK at least) called the 'survivalist' mentality.
Apparently the new wave (I am old enough to remember several 'waves' of survivalism) has risen largely on the back of 9/11...
ocalhoun
Bikerman wrote:

Apparently the new wave (I am old enough to remember several 'waves' of survivalism) has risen largely on the back of 9/11...

The economic troubles and lack of faith in the government also contribute greatly.
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