How much is fair?

[plain 12]

I don't want any propaganda here. I'm just curious:

How much (percentage-wise) is fair for the wealthiest Americans to pay? And why?

Psssst....I'm looking for a number and a justification of that number. No Propaganda, plz!!

[Jachut 487]

Hmmm, well I'm not an American. But to me, it comes down to the whole social welfare system.

In Australia, its a sliding scale but over about $80,000 a year in income, you're paying 48 cents in the dollar after your first $42,000 or so. So we're taxed pretty highly.

Where it falls really short is with all our family benefits and childcare rebates. If you're on $300,000 a year, you're set. And of course, most people on that much money pay heaps to their accountants to cheat the tax system entirely and hide all their income anyway.

If, like doug and I, you fall in the $80,000 to about $180,000 bracket for income, you pay top tax rates AND you get jack shit in terms of family benefits, childcare rebates, so yeah, you pay like top dollar for childcare - average now $100 per day here for full time care. So people like me get forced to stay home from work because their husbands earn over $80,000 and they cant AFFORD to work. But $80,000 isnt a big salary these days so it can get really tight raising a family unless you earn not very much or a real lot. Two incomes adding up to $80,000 is also a LOT better than one income, we really need income sharing in this country.

To top that off, we really get forced into private health insurance because although our public health system is very good and you really can rely on it for all but elective surgery, if you dont have private health insurance you get taxed even more.

I read a study somewhere where it figures that this middle income bracket is paying the equivalent of about 60% of their income in tax (when you work out what we pay and what we dont get) while the lower income brackets pay about 5%.

I just dont think its fair. There is absolutely no incentive in this country to study, get yourself qualified and get a professional job. You're much much better off being a tradie - like a plumber or an electrician and running all your personal expenses through your business and charging heaps to boot. All the people in that situation we know of are LOADED yet declare only about $50,000 income per year.

Grrrrrr.

So its not a rate per say, its the whole system, which I imagine is the same anywhere.

[MacMadame 81]

Yes, the system is part of the problem.

I don't know what a fair amount is, but I know the so-called Fair Tax or Flat Tax is *not* fair. Here's the math that shows why:

Where I live, a family of four -- two adults, two kids -- needs about $77,069 to break even. So let's take 3 families:

Family A makes $80,000. Family B makes $150,000 and Family C makes $250,000.

Family A has $2,931 in disposable income.

Family B has $72,931 in disposable income.

Family C has $172,931 in disposable income.

Now we tax all of them 10% -- the "fair" amount. (It can be any amount, but that one has easy math)

Family A pays $8,000 ... so how they no longer have any disposable income and are in the hole -5069 a year.

Family B pays 15,000. Instead of 72,931 in disposable income, they now have 57,931. That's still a lot of money, but I bet they feel it.

Family C pays 25,000. Instead of 172,931 in disposable income, they have 157,931. IOW, a drop in the bucket.

This is why I think any tax system has to have a base, based on CoL in your area and nothing under that base is taxed. How you tax anything over the base, I haven't done the math and I don't really know what is fair. But I don't think it's fair to make the poor pay a disproportionate amount of their disposable income compared to the rich. I say this as someone who makes a lot of money, too. So maybe less taxes for the "rich" (or at least upper middle class) would benefit me personally. But it wouldn't be fair.

Edited October 23, 2008 by MacMadame

[plain 12]

Hmmm, well I'm not an American. But to me, it comes down to the whole social welfare system.

In Australia, its a sliding scale but over about $80,000 a year in income, you're paying 48 cents in the dollar after your first $42,000 or so.

I read a study somewhere where it figures that this middle income bracket is paying the equivalent of about 60% of their income in tax

Wow. I think that may be where we're headed. And it's just so....un-American to me. I don't understand why more people aren't furious about this (BTW, I don't make much money, so my objection is not just me trying to hang on to my vast fortune.

Yes, the system is part of the problem.

Of course CoL varies greatly by region. That's why I scoffed at the idea of "rich" being a family income over $250,000. In my neck of the woods, "rich" is not even half of that. Most people don't make even six figures and live pretty well.

[She Smiles 2]

I'm with everything Jacqui said about the Aussie system. You should be very afraid if that's where you are heading in the US.

As someone who has paid that 48 tax cents in the dollar since she was 26 and has no plans to have children, I'll see very little visible return on my tax dollars in the way of rebates or benefits for most of my working life, if at all. I also have to either pay the 1.5% medicare levy surcharge or pay for private health insurance because husband and I earn over the couples "cap" of being excluded from this (it was supposed to be $150k for a couple, but the stupid opposition opposed it in parliament and reduced it to, I think it was $120k - is that right Jacqui?), I figure I might as well actually HAVE the private health insurance than just pay the government more money so I can be a public patient in a crap hospital if I get sick. Lastly, I have to partly self fund my retirement too, when I can FINALLY retire at 70 (cos, you know we're working longer these days [or some crap]). To put is bluntly, it blows.

If you're interested, this link takes you to the Aussie tax rates THIS YEAR (it changes depending on current tax policy, and is indexed each financial year)

Individual income tax rates

[plain 12]

I'm with everything Jacqui said about the Aussie system. You should be very afraid if that's where you are heading in the US.

As someone who has paid that 48 tax cents in the dollar since she was 26 and has no plans to have children, I'll see very little visible return on my tax dollars in the way of rebates or benefits for most of my working life, if at all. I also have to either pay the 1.5% medicare levy surcharge or pay for private health insurance because husband and I earn over the couples "cap" of being excluded from this (it was supposed to be $150k for a couple, but the stupid opposition opposed it in parliament and reduced it to, I think it was $120k - is that right Jacqui?), I figure I might as well actually HAVE the private health insurance than just pay the government more money so I can be a public patient in a crap hospital if I get sick. Lastly, I have to partly self fund my retirement too, when I can FINALLY retire at 70 (cos, you know we're working longer these days [or some crap]). To put is bluntly, it blows.

If you're interested, this link takes you to the Aussie tax rates THIS YEAR (it changes depending on current tax policy, and is indexed each financial year)

Individual income tax rates

Thank you for that link, She. That was exactly the sort of thing I was looking for.

[She Smiles 2]

Thank you for that link, She. That was exactly the sort of thing I was looking for.

Hey, no worries. I can't promise there isn't propaganda on the Taxation Department's website though :eek:

[gadgetlady 4]

I'm with everything Jacqui said about the Aussie system. You should be very afraid if that's where you are heading in the US.

{shudders} While every other country is backing away from socialism (or trying to), we're driving full speed headlong into it.

As someone who has paid that 48 tax cents in the dollar since she was 26 and has no plans to have children, I'll see very little visible return on my tax dollars in the way of rebates or benefits for most of my working life, if at all.

I read somewhere recently that you will never get out of the system, economic benefit-wise, what you put into it.

The colonists had a Tea Party for a tax rate somewhere under 5%. While I do think that's pretty unrealistic in this day and age, I like to keep that number in mind when discussing tax rates. I tend to hover around somewhere between 25% and 30% being about right. After all, to think about having one quarter or one third of the labor that I do go straight out the door -- if you really think of it in those terms -- for every 2 or 3 hours out of every 8-hour day you work you don't get paid, or for every year you're working 3 to 4 months for Uncle Sam -- that's not very encouraging.

[She Smiles 2]

I read somewhere recently that you will never get out of the system, economic benefit-wise, what you put into it.

Don't get me wrong, I don't want a dollar for dollar return on my tax in the way of benefits or rebates etc, that's a completely unreasonable expectation. But I'd like SOMETHING lol.

[gadgetlady 4]

Don't get me wrong, I don't want a dollar for dollar return on my tax in the way of benefits or rebates etc, that's a completely unreasonable expectation. But I'd like SOMETHING lol.

LOL! Yeah, I used to say, when I was in college and people asked me if I could ever take welfare, "Hell yes! If everyone else gets some of my money, I want some too!"

[Fanny Adams 7]

If you want to compare the Aus and the US tax systems, you have to be careful to make sure you are comparing apples with apples. Yes, our tax rates are MUCH higher than the US rates, but it is an "all inclusive" package. In the States, you have Federal Income Tax, State Income Tax, Social Security payments, property taxes and a number of other little things taking bites out of the paycheck. All of those add up to not much less than we pay. Our higher rates include SS payments, etc, and we get a much better health, education and welfare system out of the deal.

Also, it is a misnomer to say that we pay 45% in the dollar when we're in the higher tax bracket. We pay that only on the amount of income that falls into the higher tax bracket, not the full amount. For example, last year, my total income was around $160,000. The base tax on that was about $51,600, which works out at 32% of the total not 45%.

Edited October 24, 2008 by Fanny Adams

[Jachut 487]

{shudders} I read somewhere recently that you will never get out of the system, economic benefit-wise, what you put into it.

That's like the people who say (here in Australia where you dont *have* to have private health insurance) "oh, I dont want to pay for health insurance because you never get your money's worth out of it".

Um, who WANTS their money's worth out of health insurace? or car insurance or house and contents for that matter?

[gadgetlady 4]

Um, who WANTS their money's worth out of health insurace? or car insurance or house and contents for that matter?

Good point! I wasn't necessarily talking about health insurance, but I definitely don't want my money's worth on any of those :wink_smile:

[MacMadame 81]

Historically, usury and economic rebellion seem to rise in frequency and occurrence as levels of taxation rose about 33%....with exceptions.

There are countries in Europe with tax rates higher than that and no usury or economic rebellion in sight.

{shudders} While every other country is backing away from socialism (or trying to), we're driving full speed headlong into it.

Again, there are many countries in Europe who are not running away from socialism.

I read an article that proposed that high taxes create stability because essential services exist for all. That's a typical European attitude among the Euros I know from my figure skating boards.

Edited October 24, 2008 by MacMadame

[plain 12]

There are countries in Europe with tax rates higher than that and no usury or economic rebellion in sight.

Again, there are many countries in Europe who are not running away from socialism.

I read an article that proposed that high taxes create stability because essential services exist for all. That's a typical European attitude among the Euros I know from my figure skating boards.

That's precisely my point, Mac. I personally do not want America to move towards the more socialistic European model (Note to my Aussie friends here - not meant as as an insult). I remain befuddled that Americans are ok with this....I think it's 50% greed (Hells yeah, give me money for nothing, mama government) and 50% vengence (let's take those rich bastards down a notch). It sounds cliche', but there's a tiny voice that's telling me once we start down that slippery path, it's going to be twice as easy for the government to start taking over key industries: Energy, Banking, Healthcare, Media, etc, until we are a totally socialist country. Or maybe I'm just paranoid from smoking the ganja...