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srothstein wrote: ↑Wed Jun 16, 2021 7:55 pm

Paladin wrote: ↑Wed Jun 16, 2021 7:23 amI think we are largely saying the same thing... with the exception of the wealthiest. When George Soros paid ZERO tax (that is ZERO POINT ZERO ZERO) for 3 years.... he was not representative of the 5th quintile (my group) which is paying an exorbitant share of taxes.

The hidden object of the "progressive" personal income tax is to serve as an obstacle for the 5th quintile from becoming as wealthy as the 0.001%. It's much harder to save when your earnings from labor are heavily taxed (Currently 37%... at one time the top rate was 94%)

I agree that for all except the top 1%, we are saying the same thing. I even agree that we have a problem when people collect money from a tax instead of paying any in (the lowest 40%). I can understand (not agree with but understand) if they paid 0. But there are several tax credits (child and earned income to name two) that have turned our tax system into a wealth redistribution system, and that is simply wrong. It corrupts anyone's faith and understanding of taxes.

I am not sure I agree with your last statement. For one thing, when the top 1% of the income earners pay 38.7% of the taxes collected in the country I cannot say they are paying next to nothing. And I am not sure the goal of the tax system is to stop anyone from moving up in income at any level, though I will stipulate that it does have a tendency towards that effect. This has led to the common belief that there are times where a small pay raise actually increases your taxes enough to reduce your take-home income by moving you to a higher tax bracket. I know it does not really do that because of the way the taxes are calculated, but it is a common belief.

But everything we have both said is why I strongly support a flat tax rate. If you have income, and I don't care what the source is as a general rule, you pay X percent in income tax. I love the idea of making it a straight 10% and then saying the government has to live on whatever income that generates, but I am not sure that is really feasible. I have suggested taking the federal budget and subtracting any income from other sources (other taxes, customs duties, etc.) and dividing the remainder by the average per capita income in the US. The resulting percentage is the flat rate tax level. And it can never be raised higher than the first year we do this.

So we both agree, I think, that our income tax system needs to be fixed. We may not agree on the exact fixes, but we agree it needs fixing.

srothstein wrote: ↑Tue Jun 15, 2021 8:48 pm

Paladin wrote: ↑Tue Jun 15, 2021 7:40 am This is a more realistic assessment of what is going on:



The Lower 40% or so is earning money off the "income tax". The Upper 40% is paying for almost everything... except for the richest who are paying almost nothing.

Not a fair system. But an attractive system if you are a billionaire and don't want the poor to revolt. Just pay them off with money from the middle class and millionaires and "problem solved"... unless somebody finds out. Oppps!!

I think you are misinterpreting that chart. It says that the people with incomes in the lowest 40% average collecting money from the income tax system instead of paying in. The people who are in the middle income group (earn 40 to 60% of the income per year) pay about 2.7% of the total income tax collected by the US. I would guess that this means that the reflex point where they start paying instead of collecting is somewhere in this group. The people in the 4th quintile (earning from 60 to 80% of the income) pay in a total of about 13.4% of the income tax collected by the US. These lines are pretty clear and not too confusing. The next line says the top quintile pays 94.1% of the total tax collected. This now accounts for 110.2% of the tax collected, but it totals about 100% if you then subtract the two lowest groups who collected instead of paying in. But that means that the last line, which shows the top 1% was already included in the 94.1% of the top quintiles, which makes sense as they are part of that quintile. That means that the top 1% of income earners paid 38.7% of the income tax collected. Another way to write that is that the group from 80% to 99% paid 55.4% of the tax collected and the top 1% paid 38.7%, totaling 100% between all groups.

The chart should have made this clear, but it is the only way to read it and not come up with more than 100% of the total income tax collected being allocated into the various groups. Again, it shows that the higher the income, the greater the percentage of income tax collected by the US (which could be slightly different from the percentage of their income paid in taxes).

The Biden administration has proposed a number of changes that would chip away at these inequities, including a higher top tax rate on reported income, more funding and changes in rules that would help the I.R.S. to crack down on tax avoidance and eliminating the “step up” rule that allows heirs to avoid taxes on some accumulated wealth.

But none of those changes suffice to address the basic unfairness that the wealthy are living by a different set of rules, lavishly spending money that isn’t taxed as income.

The new data suggests that we need to consider a different definition of taxable income.

For tax purposes in the United States, income is basically defined as money. If an investment increases in value, that does not count as taxable income. The economists Emmanuel Saez and Gabriel Zucman estimated in April that the wealthiest Americans are holding about $2.7 trillion in wealth on which they have not paid taxes.

The logic of this standard rests on a tripod of assumptions that aren’t true.

...It is easy to accumulate wealth that is never taxed. Assets can be siloed in nonprofit foundations whose main beneficiaries may be the people who run them. Assets can also be passed on to children and grandchildren. Better yet, the government allows heirs to take ownership at the present value, erasing the accumulated tax liability.

The federal income tax is designed to be progressive, meaning that those who make more money are supposed to pay taxes at higher rates. But the richest Americans don’t. Public data shows that in 2018, the most recent year for which data is available, the top 0.001 percent of taxpayers — roughly 1,400 households — paid a smaller share of income in taxes than the rest of the top 1 percent. The effective tax rate for that elite group was 22.9 percent.

jerry_r60 wrote: ↑Fri Jun 11, 2021 10:33 am What the leaks and articles "exposing" wealthy liberals is a clever way to get conservatives to advocate for the policies the liberals and those being "exposed" are actually advocating.

“I promise you, it will be at the top of my list,” Garland assured Sen. Susan Collins, R-Maine.

der Teufel wrote: ↑Wed Jun 09, 2021 3:16 pm So, according to this story, if your home appreciates in value, you should pay income tax on the increase every year?

If your investments decline in value, will the government pay you back for the "losses" ??

Everytown spent $2.5 million to support the Virginia elections, easily outpacing the approximately $300,000 spent by the NRA, which has its headquarters in the state.

Paladin wrote: ↑Tue Jun 08, 2021 5:37 pm Propublica article: The Secret IRS Files

George Soros paid no federal income tax three years in a row.

But a question remained: What would count as income and what wouldn’t? In 1916, a woman named Myrtle Macomber received a dividend for her Standard Oil of California shares. She owed taxes, thanks to the new law. The dividend had not come in cash, however. It came in the form of an additional share for every two shares she already held. She paid the taxes and then brought a court challenge: Yes, she’d gotten a bit richer, but she hadn’t received any money. Therefore, she argued, she’d received no “income.”

Four years later, the Supreme Court agreed. In Eisner v. Macomber, the high court ruled that income derived only from proceeds. A person needed to sell an asset — stock, bond or building — and reap some money before it could be taxed.

Since then, the concept that income comes only from proceeds — when gains are “realized” — has been the bedrock of the U.S. tax system. Wages are taxed. Cash dividends are taxed. Gains from selling assets are taxed. But if a taxpayer hasn’t sold anything, there is no income and therefore no tax.

Contemporary critics of Macomber were plentiful and prescient. Cordell Hull, the congressman known as the “father” of the income tax, assailed the decision, according to scholar Marjorie Kornhauser. Hull predicted that tax avoidance would become common. The ruling opened a gaping loophole, Hull warned, allowing industrialists to build a company and borrow against the stock to pay living expenses. Anyone could “live upon the value” of their company stock “without selling it, and of course, without ever paying” tax, he said.

it turns out billionaires don’t have to evade taxes exotically and illicitly — they can avoid them routinely and legally.

For instance, the following individuals have allegedly paid less than a two percent “true tax” rate:

Warren Buffett 0.1 percent
Jeff Bezos 0.98 percent
Michael Bloomberg 1.30 percent

The leaked documents confirm what Breitbart News reported in 2019 that “The wealthiest 400 Americans in 2018 paid a lower tax rate than all of the income groups in the United States,” according to research from University of California, Berkeley.

The analysis also concludes the country’s top economic elite are paying lower federal, state, and local tax rates than the nation’s working and middle class.