Tax increases in 2011 and 2012

Practical and Practice issues for Professionals who practice in the area of taxation. Moral, social and economic issues relating to taxes, including international issues, the U.S. Internal Revenue Code, state tax issues, etc. Not for "tax protestor" issues, which should be posted in the "tax protestor" forum above. The advice or opinion given herein should not be relied on for any purpose whatsoever. Also examines cookie-cutter deals that have no economic substance but exist only to generate losses, as marketed by everybody from solo practitioner tax lawyers to the major accounting firms.
User avatar
Red Cedar PM
Burnished Vanquisher of the Kooloohs
Posts: 221
Joined: Mon Jan 30, 2006 4:10 pm

Re: Tax increases in 2011 and 2012

Postby Red Cedar PM » Tue Sep 28, 2010 6:08 pm

Burzmali wrote:
CaptainKickback wrote:Then again, those 71% of the people making less than $50,000 pay 3% of the taxes, so it is only fitting that the bulk of the tax breaks are enjoyed by the 39% that pay 97% of the taxes.

http://www.american.com/archive/2007/no ... -the-taxes

The latest data shows that a big portion of the federal income tax burden is shoul­dered by a small group of the very richest Americans. The wealthiest 1 percent of the population earn 19 per­cent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes. These are proportions of the income tax alone and don’t include payroll taxes for Social Security and Medicare.


But hey, why let facts stand in the way of class warfare and screwing the economy......I mean taxing and over-spending are doing so well. :roll: :lol:

Did you just cite a three year old article from the American Enterprise Institute's mouthpiece, written by one of the Heritage Foundation's homeboys to refute a piece by the Tax Policy Center? I mean, the Tax Policy Center might not be dead center, but they are just a bit less likely to be horribly biased in the matter than an organization devoted "to defend[ing] the principles and improv[ing] the institutions of American freedom and democratic capitalism..."

EDIT: Not that the substance of the articles differs by all that much, AEI's tweaks the data to be more favorable to their point, but the NYT's shows a similiar trend. I just find it odd that you need to inject a clearly biased source into the conversation when the existing less biased source already demonstrates your point.


The Tax Foundation is an unbaised, reputable source which points out much of the same thing as the AEI report. This article, written a year ago and based on 2007 IRS data, shows that even with the Bush tax cuts in place, the top 1% income earners pay more in income taxes than the bottom 95% of income earners.

http://www.taxfoundation.org/blog/show/24944.html

I found one of the points in the article to be particularly interesting:

Some in Washington say the tax system is still not progressive enough. However, the recent IRS data bolsters the findings of an OECD study released last year showing that the U.S.—not France or Sweden—has the most progressive income tax system among OECD nations. We rely more heavily on the top 10 percent of taxpayers than does any nation and our poor people have the lowest tax burden of those in any nation.
"Pride cometh before thy fall."

--Dantonio 11:03:07

Grixit wrote:Hey Diller: forget terms like "wages", "income", "derived from", "received", etc. If you did something, and got paid for it, you owe tax.

User avatar
Red Cedar PM
Burnished Vanquisher of the Kooloohs
Posts: 221
Joined: Mon Jan 30, 2006 4:10 pm

Re: Tax increases in 2011 and 2012

Postby Red Cedar PM » Tue Sep 28, 2010 6:14 pm

Burzmali wrote:Also, if you do the math to compute the tax break per dollar of tax paid according to the NYT article, the top 0.9% are getting 50% more per dollar taxed than the next 75% of the population (who are roughly even, oddly). For example, if the total taxes paid was $100 million, the top 0.9% would be getting back 2.2 cents per dollar paid, while the next 75% would be getting between 1.5 and 1.7 cents per dollar taxed.

So, even normalized, the super rich win, and the change in policy would hit the marginally wealthy the hardest :roll:


Noone is arguing that rich people, on average, benefited more than poorer people did from the tax cuts. It's a red herring argument - of course the rich are going to benefit more from a tax cut like this, because they already pay such a huge proportion of the nation's taxes.

Your argument obscures the real question - is it good public policy (or even sustainable for that matter) for the US to rely on such a small portion of the population to shoulder such a large portion of the nation's tax burden?
"Pride cometh before thy fall."

--Dantonio 11:03:07

Grixit wrote:Hey Diller: forget terms like "wages", "income", "derived from", "received", etc. If you did something, and got paid for it, you owe tax.

User avatar
Burzmali
Exalted Guardian of the Gilded Quatloos
Posts: 622
Joined: Fri Mar 10, 2006 5:02 pm

Re: Tax increases in 2011 and 2012

Postby Burzmali » Wed Sep 29, 2010 8:23 pm

Red Cedar PM wrote:
Burzmali wrote:Also, if you do the math to compute the tax break per dollar of tax paid according to the NYT article, the top 0.9% are getting 50% more per dollar taxed than the next 75% of the population (who are roughly even, oddly). For example, if the total taxes paid was $100 million, the top 0.9% would be getting back 2.2 cents per dollar paid, while the next 75% would be getting between 1.5 and 1.7 cents per dollar taxed.

So, even normalized, the super rich win, and the change in policy would hit the marginally wealthy the hardest :roll:


Noone is arguing that rich people, on average, benefited more than poorer people did from the tax cuts. It's a red herring argument - of course the rich are going to benefit more from a tax cut like this, because they already pay such a huge proportion of the nation's taxes.

Your argument obscures the real question - is it good public policy (or even sustainable for that matter) for the US to rely on such a small portion of the population to shoulder such a large portion of the nation's tax burden?

Actually, the original point was that they paid more tax and hence they deserved a larger break. That is acceptable, my point is that even if you normalize based on amount of taxes paid, the super rich still get a better deal. So, unless the super rich's dollar bills are worth more than mine (and even the just plain normal wealthy's), the current tax breaks are unfair.

As for "burdening" a smaller and smaller percent of the population with tax, well, the percent of the population that is below the median household income keeps increasing, (from 49.5% in 1995 to 62.2% in 2007) and since tax dollar follows income... It seems we are burdening that same group with all the income as well, so I think they can grit and bare it.

Famspear
Knight Templar of the Sacred Tax
Posts: 7172
Joined: Sat May 19, 2007 1:59 pm
Location: Texas

Re: Tax increases in 2011 and 2012

Postby Famspear » Wed Sep 29, 2010 10:52 pm

Fun facts.....

U.S. individual income tax: Highest marginal tax rates for selected tax years: 1944 through 2011

Tax years 1944 – 1951: 91%
1952 and 1953: 92%
1954 – 1963: 91%
1964: 77%
1965 - 1981: 70%
1982 – 1986: 50%
1987: 38.5%
1988 – 1990: 33%
1991 and 1992: 31%
1993 – 2000: 39.6%
2001: 39.1%
2002: 38.6%
2003 – 2010: 35%
2011: 39.6% (unless Congress changes the law)

Source: Tax Rate Schedules, Instructions for Form 1040, Bureau of Internal Revenue/Internal Revenue Service, U.S. Dep't of the Treasury, for each of the years indicated (except for 2010, where source is IRS Instructions for Form 1040-ES, and except for 2011, where source is a reference to rates for years 1993-2000).

I wouldn't read too much into these rates, though. As is the case with all statistics, they should be put into proper context.
...why is anyone in this [losthorizons] community paying the least attention to...'Larry Williams' [Famspear], or other purveyors of disinformation from...quatloos? – Pete Hendrickson, former inmate 15406-039, Fed’l Bureau of Prisons

Galee

Re: Tax increases in 2011 and 2012

Postby Galee » Fri Feb 18, 2011 2:23 pm

Agree with the 82% rule.
Wonder where we are heading towards and what will be the ratio after 10 years :brickwall:
Inspite of paying higher tax, people are not getting basic needs.
Still that 82% is paying tax.

[Mod removes commercial signature. No commercials, please, including in signature blocks.]


Return to “Tax Practice & Policy and Tax Shelters”

Who is online

Users browsing this forum: No registered users and 1 guest