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Thread: UpInequality

  1. #21
    Veteran Member bajisima's Avatar
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    Quote Originally Posted by StanStill View Post
    Right, but raising taxes on the bottom 90% is going to make life difficult for a lot of people who are scraping by, and only raise a negligible amount of money. We could make the first $100,000 of income tax free and it wouldn't hugely affect tax revenues because the amount that is being collected from people making up to 100k is relatively small. It would be a great boon to the economy though, as much of it would eventually just end up spent and into the pockets of the people who are taxed.

    And the circle would continue...
    Yea I agree but the problem I see locally is other taxes have increased so drastically that they view any taxes as hurting them. Sales taxes, property taxes, school taxes and such are driving people out of their homes and causing them to not save or spend much. Federal income tax always gets lumped in as "all taxes" but for most Americans sales and property taxes are felt the most in their daily lives and hence why we hear a lot saying how high taxes have gotten. Its one of those oddball things where just the mere mention of lower taxes excites people.
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  2. #22
    Cat-tastic Babba's Avatar
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    Quote Originally Posted by bajisima View Post
    Kind of thinking Aethelfrith also assumes US politics is all way too right wing. Including democrats. He has spoken about that before.
    Ummm, most the world thinks we're pretty right wing. I'm just pointing that out. It could have something to do with our elections and policies.
    Last edited by Babba; 28th September 2017 at 03:04 AM.
    Thanks from Paris

  3. #23
    Cat-tastic Babba's Avatar
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    Quote Originally Posted by bajisima View Post
    Not disagreeing but deductions were very high as well during that period. Car payments, credit cards and auto loans were deductible. That made the middle class eager to borrow and spend. Now we have way fewer deductions and there is always rumors mortgage deductions, childcare, and student loan deductions will also eventually disappear. That will make way less money for most in the middle class and there is no way they will support any tax increases if they no longer have deductions to help them.
    Yes, you're right. Tax deductions favored the middle class. As opposed to today where tax deductions favor the wealthy. That very much contributes to income inequality.

  4. #24
    Cat-tastic Babba's Avatar
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    Quote Originally Posted by bajisima View Post
    Yea I agree but the problem I see locally is other taxes have increased so drastically that they view any taxes as hurting them. Sales taxes, property taxes, school taxes and such are driving people out of their homes and causing them to not save or spend much. Federal income tax always gets lumped in as "all taxes" but for most Americans sales and property taxes are felt the most in their daily lives and hence why we hear a lot saying how high taxes have gotten. Its one of those oddball things where just the mere mention of lower taxes excites people.
    If more people understood that state and local taxes are VERY regressive, that would help.

  5. #25
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    Quote Originally Posted by Babba View Post
    If more people understood that state and local taxes are VERY regressive, that would help.
    They are NOT regressive. Medicaid counts.

  6. #26
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    Quote Originally Posted by Babba View Post
    Yes, you're right. Tax deductions favored the middle class. As opposed to today where tax deductions favor the wealthy. That very much contributes to income inequality.
    Read about the AMT someday.

  7. #27
    Veteran Member Madeline's Avatar
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    Quote Originally Posted by Spookycolt View Post
    And what is their fair share?

    They already pay about 90% of all taxes collected.
    Where do you get all this bad information? If course the 0.01% do not pay 90% of all taxes.

    I'd be shocked if they pay 9%.

  8. #28
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    Quote Originally Posted by Madeline View Post
    Where do you get all this bad information? If course the 0.01% do not pay 90% of all taxes.

    I'd be shocked if they pay 9%.
    The wealthiest are best suited to put themselves in positions to pay very little tax... One of the rockefellers once said how he doesn't pay taxes, but rather signs the government a check every once in a while.

    Although my favourite similar was the boondocks, "they call me the fundraiser, the first rule of fundraising is you give nothing to nobody. You just pay the cost of doing business."

  9. #29
    Veteran Member Madeline's Avatar
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    Quote Originally Posted by publius3 View Post
    Read about the AMT someday.
    The alternative minimum tax was meant to curb tax evasion that wasn't strictly prohibited. It was adopted in 1966 and revised in 1986, but like the IRS Code itself, it has not been substantially revised since then.

    As a measure of fairness, it has long since lost its potency. It is easily avoided now.

  10. #30
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    Quote Originally Posted by Madeline View Post
    The alternative minimum tax was meant to curb tax evasion that wasn't strictly prohibited. It was adopted in 1966 and revised in 1986, but like the IRS Code itself, it has not been substantially revised since then.

    As a measure of fairness, it has long since lost its potency. It is easily avoided now.
    It was originally designed to ensnare 'Rockefeller' money but since then it has ensnared millions of upper middle class American families.

    It is not 'easily avoided' --- its threshold based. If your income is high enough, you're 'in the AMT' -- yes, you can avoid it in the sense that people can simply avoid having income by deciding not to sell a stock. But if your AGI is in the range, the AMT starts chipping away at the benefit of deductions. Then especially high incomes are just stuck with a higher rate ANYWAY. So essentially what happens is that the taxpayer hits the window where deductions are throttled, he or she comes out the other end and then just gets whacked for a higher rate.

    So when Babba writes this:

    Quote Originally Posted by Babba View Post
    As opposed to today where tax deductions favor the wealthy.
    That is wrong because tax deductions do NOT favor the wealthy, as one gets wealthier the benefit of tax deductions is basically phased out.

    In fact deductions tend to favor middle to upper middle income families with children in mortgaged homes. Not exclusively of course, but that really is the meat of it.
    Last edited by publius3; 27th September 2017 at 06:52 PM.

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