Am I turning liberal or what?

Will Robinson · Post by **Will Robinson** » Thu Mar 10, 2005 12:58 pm

Ok I'm either going soft or have I just shed my conservative dogmatism enough to see an injustice to the conservative position on payroll tax.

We all pay into the system for social security by way of the payroll tax.
Currently all earnings after aproximately $90,000 are exempt from the payroll tax.
So a person who earns $90,000 (or less) has 100% of their income taxed for that program and those that earn $180,000 or more have only half (or less than half) of their income taxed for that program.

I think that is unfair, undemocratic...whatever label you want, it's just wrong.
I don't buy the argument that paying more is not right because you would be paying into the system more than the benefits you could recieve when you retire.
Example, people without any children pay school taxes and we justify it by saying they benefit from having literate, educated citizens etc. etc.

So *if* the social security system is a beneficial program to our society, as the school taxes are, then why should poor and middle class people pay a higher percentage of their gross income into the system than the more wealthy people do?

Can someone straighten me out on this or am I right?

ccb056 · Post by **ccb056** » Thu Mar 10, 2005 1:03 pm

because the rich people don't use the state funded schools nor the state funded retirement program as much as the poor people, so they don't have to contribute as much

Lothar · Post by **Lothar** » Thu Mar 10, 2005 1:05 pm

Half of me thinks you're right, and the other half thinks it's just accounting voodoo... when your income gets that high, don't you move into a higher (base) tax bracket? It seems like it's really just a question of whether your still-too-high taxes are going in to the social-security lack-of-a-trust-fund, or in to the general budget.

I like the idea of a flat (percentage) tax. Income taxes are higher for the rich, while payroll tax cuts off after a certain amount. It seems like all that really does is slightly lessens the extra tax burden... Ideally, this tax AND all other taxes would just be flat taxes. But I'm certainly not going to complain about this one under-burdening the rich as long as all of the other taxes over-burden the rich. Let's make them all flat...

Will Robinson · Post by **Will Robinson** » Thu Mar 10, 2005 1:19 pm

Yea, I'm all for a fair tax system because I want the government to loose it's tool for social engineering and the political parties tool for pandering for votes with tax incentives and exemptions.
But, regardless of how badly they currently manage the tax revenue or play with numbers, the payroll tax is still unfairly implemented.

If the program is bad - cut it out.
If the management is bad - fix it.
If payroll is taxable - all payroll is taxable.

woodchip · Post by **woodchip** » Thu Mar 10, 2005 2:57 pm

Will, while it may appear the higher income peeps are skating on the payroll tax, don't forget who pays 90% of the income tax.

Avder · Post by **Avder** » Thu Mar 10, 2005 10:00 pm

I'd like to see a bracket by bracket breakdown of exactly how much each tax bracket contributed to income taxes last year and a total percentage counted from the top bracket down, see where 50% is.

dissent · Post by **dissent** » Thu Mar 10, 2005 11:21 pm

Hmm, well the topic of change to the tax code seems to be timely, as shown here, and here, and
here for example.

No, I don't think you're in any danger of becoming an Air America groupie just yet. It's just that it's going to take some pols with guts to make changes to the bloated monstrosity of a tax code we currently have.

Birdseye · Post by **Birdseye** » Fri Mar 11, 2005 12:40 am

So *if* the social security system is a beneficial program to our society, as the school taxes are, then why should poor and middle class people pay a higher percentage of their gross income into the system than the more wealthy people do?

Can someone straighten me out on this or am I right?

You're correct. It's a regressive tax.

Ferno · Post by **Ferno** » Fri Mar 11, 2005 1:35 am

Will, no.. you're not becoming soft. you're just getting more heart.

Tetrad · Post by **Tetrad** » Fri Mar 11, 2005 3:17 am

Correct me if I'm wrong, but isn't the whole reason behind the tax curb was because 1) the wealthy are already paying more tax than the normal, and 2) letting them keep their money is going to do a lot to stimulate the economy and such (investing, giving more people jobs, etc).

woodchip · Post by **woodchip** » Fri Mar 11, 2005 6:48 am

Tetrad wrote:Correct me if I'm wrong, but isn't the whole reason behind the tax curb was because 1) the wealthy are already paying more tax than the normal, and 2) letting them keep their money is going to do a lot to stimulate the economy and such (investing, giving more people jobs, etc).

Actually you are correct. Remember the "success" (insert sarcasm) of the luxury tax.

Avder · Post by **Avder** » Fri Mar 11, 2005 8:45 am

The problem with that is that the wealthy of today tend to hoarde their wealth while the wealthy of generations past were out doing things with thir money to benifit communities large scale simply because they could. such acts of generosity are becoming far less common today and often are used for the purpose of evading taxation through looholes rather than sheer generosity.

Simply put, the rich are becoming more greedy. There are more people being born into wealth rather than earining it from the first minimum wage paycheck up.

DCrazy · Post by **DCrazy** » Fri Mar 11, 2005 9:10 am

Avder wrote:There are more people being born into wealth rather than earining it from the first minimum wage paycheck up.

I think all the dot-com millionaires would beg to differ. That is, all the ones that are left.

roid · Post by **roid** » Fri Mar 11, 2005 9:48 am

yeah when doc-comms merge, the fattest CEO will EAT the other CEOs.

dissent · Post by **dissent** » Fri Mar 11, 2005 12:27 pm

Avder wrote:The problem with that is that the wealthy of today tend to hoarde their wealth while the wealthy of generations past were out doing things with thir money to benifit communities large scale simply because they could. such acts of generosity are becoming far less common today and often are used for the purpose of evading taxation through looholes rather than sheer generosity.

Do you have a stat or two to back that assertion up?
I'll try to do a little checking ...

dissent · Post by **dissent** » Fri Mar 11, 2005 1:12 pm

I've found a bit of interesting discussion regarding "who are the rich":

some historical commentary

a little something from Rush on some numbers from a couple of years ago

this is an interesting little essay

and here are some more numbers

and commentary

LordDeath · Post by **LordDeath** » Mon Mar 14, 2005 1:31 pm

Avder wrote: Simply put, the rich are becoming more greedy. There are more people being born into wealth rather than earining it from the first minimum wage paycheck up.

You are incorrect. I would suggest an excellent book called "The Millionaire Next Door", which sheds a lot of light on the true rich in America based on two decades of research and surveys.

A few quick facts:

Most of the 'rich' in this country are first generation rich (self-made) who inherited none of their wealth. By most, I believe the figure was > 80%, but I can't recall it exactly. They accumulated their wealth through disciplined saving and investing and frugal living.

Of those rich who did inherit their wealth, a large percentage of them return to non-rich status within one generation. The cause as determined by the surveys seemed to point to the fact that since they didn't build the wealth themselves, they had the "rap star / lottery winner" mentality when it came to money and squandered their inheritence within a generation.

Of those who inherited wealth and maintained or increased it, many of them were unaware of their family's financial status until well into adulthood. So by the time they came into the money (or were even aware of it) they had made money on their own and learned to appreciate and respect it.

Just food for thought.

I'm not rich. But I plan to be someday through hard work and discipline. And it pisses me off that it's looked down on as a bad thing to want to be, (usually by people who have zero savings and lots of credit debt... but hey they got the latest xbox game and cable tv!)

Ferno · Post by **Ferno** » Tue Mar 15, 2005 1:25 am

yea i've been hearing about 'the millionaire next door' a lot. That is next on my 'books to get' list.

LordDeath · Post by **LordDeath** » Tue Mar 15, 2005 10:12 am

http://www.bookbrowse.com/index.cfm?pag ... t&exPage=1

There's a link to chapter 1 of the book (posted as an excerpt on some site that sells it I believe.)

Pages 1,2 and 7 are probably most interesting to those in this thread, although the whole thing is worth reading.