Ok after looking I see nothing on this issue, the shutdown.

CutePrincess

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But they don't, look at the comment to apple, who was at a trillion at one time (now like 700 bil cuz of their bad designs with iphone xr etc?) but it stated they do not pay taxes in ANY country. Now for the most part I disagree with bernie's tax ideas, they are too harsh but I do believe he had the basic idea, the top 1% of 1% do not pay their fare share though these loop holes and I do not see apple doing us favors.
 

Drifter

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I will use here in NZ as an example. If you earn $100, you pay $33 in income tax. Leaving you with $67. You spend that money to put gas in your car, 48% Fuel Tax = $32.16 + 6.70. From $100 I earned $71.86 goes to the government in tax.... tell me that is not ridiculous.
I've never met anyone who had to pay 72% of their income to the government in taxes. You're right, that sounds ridiculous and it must be awful to try to live that way unless the government supplies decent food, housing, transportation, and medical services at no additional charge.

I live in America and I just did my taxes. I paid a total of just under 3% for local and federal income taxes. Local sales taxes are 5.5% for non-food items. Fuel taxes are higher than sales taxes but, theoretically, they are used for building and maintaining highways which, in America, are pretty good overall. I have to question your math a little bit, though. You seem to be saying that for every $100 you earn you have to pay around $39 in fuel tax. Are you saying you fill your gas tank several times a day?

To be honest, I get deductions and exemptions that lower my income tax because I'm retired. But even when I was working and making 50% more than I am now I was only paying 11 to 12 percent in federal income tax. Add in local and social security taxes and the total would still be significantly less than 33%, and some of that funded the income I am enjoying right now so I can't complain. Maybe you should move to America. But wait to see if we survive Trump before you consider that. ;)
 
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PCPilot

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But they don't, look at the comment to apple, who was at a trillion at one time (now like 700 bil cuz of their bad designs with iphone xr etc?) but it stated they do not pay taxes in ANY country....
Strictly speaking, they do pay taxes, just not corporate income tax. If you are employed by Apple in the United States they pay around 7% of your salary (below $130k) in FICA taxes. They pay property taxes on their properties, and sales taxes on items they purchase. When they pay their employees that causes the employees to pay taxes. Apple generates tons of sales taxes for states and cities based on all the iPhones and iPads they sell.

Corporations and people pay taxes even if they don't pay income tax.

the top 1% of 1% do not pay their fare share though these loop holes and I do not see apple doing us favors.
The top 1% pay more taxes than the bottom 90%, which is as a progressive tax system should be. My issue with Apple and corporate tax isn't that Apple isn't paying income taxes. Instead it's that it is encouraged to keep the money abroad instead of spending it in the US.
 

CutePrincess

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The top 1% pay more taxes than the bottom 90%, which is as a progressive tax system should be. My issue with Apple and corporate tax isn't that Apple isn't paying income taxes. Instead it's that it is encouraged to keep the money abroad instead of spending it in the US.
closing loopholes to pay corporate income tax, as you put it, will help with the issue putting some of that money back in our economy.
 

Drifter

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The top 1% pay more taxes than the bottom 90%, which is as a progressive tax system should be.
Statements like this can be misleading. It's possible that, dollar for dollar, the top 1% are paying more federal income tax than the bottom 90%, but they can still be paying at a much lower rate than many of the wage earners in the lower 90%. I did find information on the web that supports your statement, but, when looking at similar comparisons on the same pages for the top 10 or 20 percent, there were some terms used that could lead to false conclusions if not carefully read. For example, sometimes it said "federal income tax" and other times it said "federal tax income". The two aren't the same. Federal tax income includes all sources of income from taxes the government receives, not just federal income tax.

Also, it wasn't always clear who this 90% referred to. Was it the population in general, or just those that earned a wage? If it was "wage earners" we maybe should consider whether all wage earners should be included, or just those above the poverty level. A significant portion of the population too poor to pay taxes would definitely skew the interpretation of the results.

In the 1% vs 90% example it specified "wage earners" and "federal income tax", and the conclusion was that the upper 1% were paying federal income taxes at a higher rate. I'll assume this is true, so this would seem to prove your point. But - it didn't specify if it was referring to all the money an individual received for the year, or if it was just the money reported as income. Many of the people in the 90% group are hourly workers, which means their income is reported to the federal government before they even see their checks. Most of the upper 1% have the luxury of reporting their own income, and they aren't required to report all money they receive as "income". Much of it can be reported as capital gains and may not have been included in the calculations the example is based on. The upper 1% are also more likely to claim more business deductions, and the legal distinction between "business trip" and "vacation" can be blurred. These and other things the upper 1% can do, some legal, some not, will reduce their reported income and skew the figures to show them paying a higher tax rate.
 
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PCPilot

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Also, it wasn't always clear who this 90% referred to. Was it the population in general, or just those that earned a wage? If it was "wage earners" we maybe should consider whether all wage earners should be included, or just those above the poverty level. A significant portion of the population too poor to pay taxes would definitely skew the interpretation of the results.
If I understand correctly, it was everyone who had income and filed a tax return.

Many of the people in the 90% group are hourly workers, which means their income is reported to the federal government before they even see their checks. Most of the upper 1% have the luxury of reporting their own income, and they aren't required to report all money they receive as "income". Much of it can be reported as capital gains and may not have been included in the calculations the example is based on.
I don't think you understand correctly. Capital gains, dividends are considered "unearned income" and can be taxed at different rates, but they are most certainly income and they are very rarely "self-reported". My brokerage provides a 1099-B each year to summarize my capital gains/losses, and I get 1099-DIV and 1099-INT forms for my dividends and interest.

I don't disagree with you that people could be paying a lower rate if their income is structured differently, but it's certainly counted for the purposes of the statistics.
 

Drifter

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If I understand correctly, it was everyone who had income and filed a tax return.

I don't think you understand correctly. Capital gains, dividends are considered "unearned income" and can be taxed at different rates, but they are most certainly income and they are very rarely "self-reported". My brokerage provides a 1099-B each year to summarize my capital gains/losses, and I get 1099-DIV and 1099-INT forms for my dividends and interest.

I don't disagree with you that people could be paying a lower rate if their income is structured differently, but it's certainly counted for the purposes of the statistics.
I found a 2017 report titled "Summary of the Latest Federal Income Tax Data, 2016 Update" that was based on 2014 tax data. It used "Share of Adjusted Gross Income" which, to me, implies, reported income on tax returns. The data in the report was similar to statistics I'd seen for 2015.

It shows the top 1% paying nearly 40% of the total federal income tax. This certainly makes it look like the super rich are paying their fair share in our progressive tax system. But "fair" is a political or moral opinion, not a fact. There are other ways to view this particular statistic, which is why I say it can be misleading.

Another way to look at this is to say (from the same report) the upper 1%, alone, reported nearly double the amount of the total income reported by the lower 50%, yet they pay only 40% of the taxes. The remaining 49% make close to 70% of total income yet pay less than 60% of the federal income tax. Now the question of fairness isn't so obvious.
 

PCPilot

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I found a 2017 report titled "Summary of the Latest Federal Income Tax Data, 2016 Update" that was based on 2014 tax data. It used "Share of Adjusted Gross Income" which, to me, implies, reported income on tax returns. The data in the report was similar to statistics I'd seen for 2015.
Got a link? I'd love to read it and then we'll be discussing the same numbers.
 

Drifter

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Got a link? I'd love to read it and then we'll be discussing the same numbers.
https://taxfoundation.org/summary-latest-federal-income-tax-data-2016-update/

A bar chart part way down under the heading "Half of Taxpayers Pay 97.3 Percent of All Income Taxes" is what I was looking at for the figures I used.

Just under that is the heading "High-Income Taxpayers Pay the Highest Average Tax Rates".

My point is: assuming these statements and figures are true, and disregarding questionable deductions, reporting methods, and recent tax law changes, the question still remains: are the wealthy paying too much, too little, or the right amount in income taxes?
 

CutePrincess

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This thread seems to be getting off topic.
It is, but I am just overall frustrated with trump in general, and this shutdown really broke it for me

At this point I do not even understand why people back this fool, with all the nonsense tweets he makes, showing this shutdown is a lost cause and is he going to pull it again Friday?
 

ZetaSonic

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Worth remembering which recent president called the founder of the Democratic party his favourite president and had his portrait installed in the most prominent area of the Oval Office. Hint: it wasn’t Obama, Clinton, Carter, LBJ or JFK.
So the Switch thesis only kicks in when you're placed in a bad light? Okay.
 

DocBrown

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Do you understand what those workers do? Or the basics why we have a government?

Since people on an individual level are unable to pay for police, roads, and other government controlled areas, we as the people all chip in called taxes. Then we hire people to do the directing for us, to how these funds are allocated best.

When someone does a crime, you can't just charge someone because a majority says so (tyranny by majority) so we have a court system to put those on trial fairly.

also stuff like museams and such are run by the government, you can't just not have 800 000 workers, doesn't make sense.


this is all wrong, where do you come up with this?



I'm starting to think we need restrictions, some kind of education level requirement or something, I got no clue. But after seeing all the tweets, I am in disagreement all of us should be allowed to vote. Regardless someone like trump (and a bit lesser extent bush jr) getting to be president only proves our system does not work.
Your frustration is warranted, but exclusion is something that folks here know a lot about. The problem is that the system is not democratic. I watched a TED talk the other day. Numbers from my feeble memory, but there is a gatekeeping system in the USA called "money". About 450 families, perhaps 0.02% of the population have the power of the political purse. They put up two candidates. We get to decide which of their candidates wins. In 2016 Trump and Sanders tried to shove the two appointees, Bush and Clinton, aside. Trump is a reality show star and succeeded.

The result is interesting. The US' owners are pleased with the legislation but surely must be nervous about the bull in THEIR China shop.

0.02% giving you the right to vote is like your mommy letting you decide on blue or yellow diaper pins.

The system needs a rewrite, one that throws out old ideas, such as voting districts. Sounds like another thread...
 

CutePrincess

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Your frustration is warranted, but exclusion is something that folks here know a lot about. The problem is that the system is not democratic. I watched a TED talk the other day. Numbers from my feeble memory, but there is a gatekeeping system in the USA called "money". About 450 families, perhaps 0.02% of the population have the power of the political purse. They put up two candidates. We get to decide which of their candidates wins. In 2016 Trump and Sanders tried to shove the two appointees, Bush and Clinton, aside. Trump is a reality show star and succeeded.

The result is interesting. The US' owners are pleased with the legislation but surely must be nervous about the bull in THEIR China shop.

0.02% giving you the right to vote is like your mommy letting you decide on blue or yellow diaper pins.

The system needs a rewrite, one that throws out old ideas, such as voting districts. Sounds like another thread...
That is off my point, the convo that quote was taken from was from a person saying we should not have any government workers because tax is thievery. Yes our system needs a rewrite and I know what your telling me, but to have that as an excuse to say "tax is thievery" and that we should not have those jobs is absurd.
 

Drifter

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The system needs a rewrite, one that throws out old ideas, such as voting districts. Sounds like another thread...
With the declining intelligence in America a sensible rewrite is out of the question. Any improvement over what was written some 240 years go is unlikely. The system is flexible enough to allow amending, but amendments take majority agreement and it appears we are no longer smart enough to be able form a majority consensus on anything. It would be best to keep our hands off the system until we, collectively, understand the problems we are facing. Trump's attempts at rewriting the system are scary enough. Our only hope is that the system is strong enough to withstand his assaults.
 

CrazySmoker

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Put myself 1000 mts from Trump, give me a Dragunov and it'd be resolved quickly.

But I'm not the person for make this dirty job. Anybody else wanna try ?
 

DocBrown

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I am .. unsure if bernie would of won.
I am right leaning on a lot of issues, I just can't put myself to vote in someone that far left and pretty much a socialist, more so then Obama. if it was between bernie and trump I literally would not want to vote at all, or find some independent to vote for because they are both just too extreme. Also he was a very left wanting a dreamland that is not possible, i mean this does a good job in summing it up in my opinion:

his tax plan was complete BS and i doono why anyone would be willing to support it. Also it does not make any logical sense to fix anything like what
Crowder goes into (I did not fact check this) but I did see bernie's tax brackets and saw there is no way he was passing that and something like free collage.
Naw, Crowder is lying and misleading.
Which loopholes are you referring to?

Keep in mind that if anything, the tax system is structured towards the middle/upper-middle classes who are married, own homes and have children. If you're single and don't have children or a house, you have very few of the traditional deductions available to you. I was looking over my taxes and found some interesting examples.

In 2016, I had a gross income of around $115k, an adjusted gross income of $100k and taxable income of around $61k. That turned into a federal tax liability of $8900 and an overall tax rate of around 7.7%. I was able to deduct significant amounts of money because I'm married, had three kids, mortgage interest and state/local taxes to deduct plus 401k, HSA and IRA contributions. Some was self-employment income which allowed certain expenses (computer purchase, health insurance for the family) to be deducted against it. The following year was $166k, AGI of $161k, taxable income of $115k and a tax liability of $19k - overall tax rate of 11.5%.

I don't say this to brag, but to point out a few interesting things.

First, I only pay tax on around 2/3 of my income because of various deductions. Second, you'll notice that from 2016 to 2017 my income went up by around 50% but my tax liability more than doubled as more of my income became wage income and various credits (child tax credit) phased out and I moved out of the 0% bracket for dividends. The lesson from this (and the reason why the rich can pay surprisingly little) is that how you structure your income matters, and having more money gives you more options in how you structure it.

Lesson #1: Because your tax rates go up with income, it makes perfect sense to move income from year to year if you can. That's why I deduct 18% of my pay into a 401K. I pay no money on it today, but will many years down the line when I am making half as much as I do now. I save 21% or so in taxes today, and pay 16%, 11% (or zero!) when I take it out. Plus it grows tax-free. In years (like 2016) when I had low tax rates, I can contribute to a Roth IRA where I pay low tax rates now, then withdraw it later and pay zero taxes.

Lesson #2: The types of income matter. Roth withdrawals are tax-free. Qualified dividends and long-term capital gains are taxed at 0%, 10 or 15%. In 2016 I was below the threshold so all of my taxable dividends incurred no tax - in fact that year I received $10k in dividends and paid zero tax because they were either in tax-deferred accounts or I was below the 0% dividend rate threshold. The point is that once you can structure your income, if you need $10k you have choices where to pull it from where it could save you significant taxes in other areas.

Lesson #3: Capital Gains are awesome. If I invest in stocks in a taxable account and they go up, I don't pay taxes until I sell. I can control, therefore, when I pay taxes and I incur no liability until then.... which means I can save it for when I have a lower income year and pay lower taxes (see lesson #1). Even better, the rate is 15% up to $475k (married). At most it's 20% - so the really rich aren't getting traditional income; they're getting capital gains. If I buy a $100m Picasso and sell it two years later for $200m, I have a liability of only 20% on the $100m profit, rather than 39.6% if I made that $100m as regular income.

Lesson #4: Mortgages are a great subsidy. While they don't save much money in the buying vs. renting equation, the interest deduction means you can borrow more than you strictly speaking need and save/invest the rest. I could pay off about $200k of my mortgage today, but I prefer to keep that money invested gaining 7% tax free (see #3) while paying an effective rate of 2.5%. That's around $10k of free money every year.

Lesson #5: Lessons 1-4 don't matter if you don't have any extra money. If you're a W2 earner spending every penny, you cannot take advantage of any of this.

Lesson #6: Unless you're really rich, you're stuck with mostly wage income so your efforts to shift things around will be at the margins, with IRA/HSA contributions and some taxable savings. Over time, however, that really adds up. But you often can't do what really well-connected or rich people do, like structuring a corp-to-corp contract with your S-corp, opening a solo 401k, taking some wage income and the rest as dividends.

Lesson #7: Some of the highest marginal rates are paid at surprisingly low incomes. Like I said earlier, if you're single with no deductions you're kind of screwed. It gets worse as EITC phases out, or the child tax credit phases out and you're still paying FICA. Same thing if you're a W2 employee with no employer-provided health insurance so you need to pay for it after-tax. (Ouch).

[Political rant - if the GOP actually wanted to provide meaningful tax reform for working class Americans, they would raise the EITC thresholds, or make all health insurance to a point tax deductible (no matter how it's paid) or raise the limits on the lowest brackets. Instead they give a huge break to higher income taxpayers or people with massive mortgages to deduct.]

None of this, by the way, is really secret or illegal or unethical. The tax code is structured the way it is, and like the rules of any game it makes sense to do what it encourages you to do, and avoid what it punishes. The challenge is that most people cannot do so because they aren't - or can't- putting money aside.
Excellent points. I'll add the slam-dunk.

The wealthy get to decide their taxable income, which has little connection to their physical income. When Warren Buffet says that he pays a lower rate than his secretary, it is almost certain that he's using his taxable gross income, not his real income.

What's real income?
Net worth Jan 1
- net worth last Jan 1
+ money spent during year.

If you buy and hold you never pay taxes other than for dividends. Of course, that's unacceptable, so do stock buybacks instead. Zero tax.

Then you structure your estate so the heirs' basis is reset without paying tax on the increase in basis (death tax is a great phrase/excuse for never paying a dime in taxes).

Not as clean as I'm making it out to be, and you have to pay lawyers and select the proper two candidates to present to the sheep so regardless who the sheep "vote" in, it's your guy or gal.

Hopefully Drumpf's evil stupidity and AOC's ethics, morality, and smarts will turn over the whole load of poo.
(I really loved her questioning of experts about whether her "plan as a bad guy" to warp her office into a heinous and corrupt office was legal. "Can I do this" "Yes you can" "so that means..." Another and another and on and on.

Then she asks about the Presidency and finds out that there is pretty much no limit. "Pardons for $25k"? Of course that's legal...
 
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