Regading taxes on the middle class...

[dgreenshield]

Ok, with Obama's talk of raising taxes on the "rich" I would like to know where you all think middle class ends and rich begins.

[Hummie]

.....not with me.

[Glueless Media]

AND I won't be the first to answer...lol

[dgreenshield]

I don't think it's with me either. But, is there are dollar amount? Can we really say that someone who makes $250,000.00 a year is rich? Is someone who makes 75K a year rich too?
I have taught my son that we are rich in the life we live because we have family, good friends and good health.

[HLWalter725]

I really don't know where that line of distinction is or should be.

I know that my husband and I combine to make a reasonable income on paper and yet I still feel quite poor after I pay out all my bills.

I know that I am astounded at the volume of 4,000 and 5,000 square foot homes around my town and wonder how sooo many people can afford them (well I guess there is evidence that they can't, now, LOL).

I guess I'd think of anyone that earns a million a year is considered rich. I think the line is lower than that, but I truly don't know where.

Good question to pose. I have no answer really.

[saxon]

Well - I think it is a matter of perspective and that is what gets people so heated on the subject. For me, anyone making over 250k a year I would consider well-off IE rich. BUT, those people probably live up to their means, so to them, a tax increase is a burden. The only way to quantify RICH is someone who has an extreme excess of money after all of their obligations. And, then we get into the area of those who live frugally being punished. So, it is really a circular argument!

[Miss Chris]

I don't think it can be boiled down to one set of numbers. Way too many variables for that. For instance, one thing that is often overlooked is regional differences. DH and I do OK here in Kansas, but in California we would be veritable paupers.

[saxon]

Chris- Very good point! As someone who moves around this big country every 2-3 years, there are HUGE differences in the cost of living per region...

[SweetPolly]

I think that it has to do with the cost of living in your area. Wouldn't that be a tax nightmare to figure out. 250,000.00 goes a lot further in some places than others.

[dgreenshield]

I definitely believe it is a regional number. 200K in Iowa is not the same as 200K in CA.

[saxon]

You know - it might not be as big a thing to figure out as suspected - being military we get a COLA - cost of living allowance per place we are stationed... I suspect the government could easily put a tax bracket in place for every region based on the figures they use to pay us the difference in cost of living...

[lunafaerie]

As someone who lives in CA on a quarter of 250K, I still think it's way wealthier than me! LOLOL!!!

[lsl_scrapper]

LOL! I think for most people, the definition of 'rich' is 'anyone making more than I do'.

[Tiffikat]

I would say 250K is considered well off and in any area if you are living paycheck to paycheck on 250K then you are living beyond your means.

[vegaschristina]

The median income in the US is $50K, so I think over 5 times that is rich (over $250K). Statistic found here (http://en.wikipedia.org/wiki/Household_income_in_the_United_States).

[rach3975]

I think the figure for 'rich' is going to be something way below $250 K. I'm voting for Obama because I believe in the Dem platform and ideals, but DH and I consider ourselves upper middle class and are expecting our taxes to go up under Obama.

[kjbstevens]

I'm actually one of those people that believe that poor is the poverty line. I'm not sure how $250,000 and around $20,000 even come close to comparison anywhere in the country. We make under $40k which is the cut off for poor and eligible for state help here. I just do things like using cloth diapers and cooking instead of going out to eat. We have no problems so I see the cut off line here in Maryland at 40k very reasonable to distinguish lower middle class from the others. Around here you make more than $100k and you are pretty well off. I agree it's regional and another reason to leave it to the states. Federal cut off lines usually hurt city people more than anyone.

[NellieRose]

As someone who lives in CA on a quarter of 250K, I still think it's way wealthier than me! LOLOL!!!

I can identify with this as I live in the New York City area. Living in a region that is extremely expensive, it would be safe to say that anyone earning $250K/year is living well, to say the least.


Some food for thought on this issue. Below are a few articles that bandy about numbers and ideas of what "middle class" is in terms of annual incomes. It would seem that all 3 of these particular articles would conclude that $250K is well above "middle class":

Newsweek article from August 2008: http://www.newsweek.com/id/155951

PUblic Radio.org article from January 2008: http://marketplace.publicradio.org/display/web/2008/01/11/what_is_the_middle_class/

MSNBC article from October 2007: http://www.msnbc.msn.com/id/21272238/

[tammy1999]

Great points being brought up. Where I use to live in Missouri, if you made around $60,000 you made a good living. But that same living here in Florida would be pushing it, but then we get a break for not having income tax in this state.

I don't know if any of you know about the Fair Tax (http://www.fairtax.org/site/PageServer) that has been proposed in congress, but its really interesting to read about. What this means is that there would be NO MORE income tax taken from your payroll check. Everything you make stays with you. What you would do is only pay a fixed rate on new items you buy, not used. Thus, a sales tax. It's a simple process and the money it would generate in this country would be staggering. Companies would not be taxed anymore, they would bring their companies back to the US and thus more jobs. People would have more money to spend. Also, if you are at the poverty line, you will receive a check in the mail for the amount of what you would spend on sales taxes.

Can you imagine, not having to do your taxes come April 15th!! Yea!! I really hope more and more people take interest in this and maybe someday we won't have to worry about what people make and everyone would have more in their pockets.

[vegaschristina]

I don't know if any of you know about the Fair Tax (http://www.fairtax.org/site/PageServer) that has been proposed in congress, but its really interesting to read about. What this means is that there would be NO MORE income tax taken from your payroll check. Everything you make stays with you. What you would do is only pay a fixed rate on new items you buy, not used.

The unfairness of this proposal, though, is that I would get taxed on the percentage of my paycheck I spend...almost 100% of it...where someone making 4 times what I make would only get taxed on what they spend...most assuredly less than 100% percent. So I get to pay a larger tax portion because I'm not able to save much? That places an unfair burden on those who won't qualify for that check back with what we've spent on the "fair tax" but still live paycheck to paycheck. How is that fair?

[tammy1999]

The unfairness of this proposal, though, is that I would get taxed on the percentage of my paycheck I spend...almost 100% of it...where someone making 4 times what I make would only get taxed on what they spend...most assuredly less than 100% percent. So I get to pay a larger tax portion because I'm not able to save much? That places an unfair burden on those who won't qualify for that check back with what we've spent on the "fair tax" but still live paycheck to paycheck. How is that fair?

The only tax you pay will be on anything new you buy. Say groceries, furniture, etc. If you make $300.00 a week, your paycheck will be $300.00 a week. I would think a person making that per week would know what they could buy in their income. Someone that makes more, obviously would buy more, but would also pay more in the sales tax. I guess I'm not understanding where you are getting why you don't think its fair?

[DirtyFeetDesigns (heb1976)]

It would have to be based on your income verses cost of living in your area. For example ... my cousin's job has deals with the stock market. He easily makes over $100K a year + bonuses. He lives in Chicago and they just bought a house for $455K. I about freaked. When he saw our house, he said it would easily go for $300-350K in Chicago. The town over from us, according to the guy that inspected our house, our house would sell for $228K. We paid $136K.

My area is sorta considered middle income, but we live in a private community that has a man made lake. Houses *on* the lake will easily go for $200-700K ... but houses directly across the street from the lake (like ours), $100-175K.

What I think is amazing, and this is from friends of ours in the military, they can survive on their paychecks living in Ohio ... but in New York - they would be colllecting welfare.

The area you live in has to be relative to your pay. To me, if you make $250K + ... I would consider you very well off.

[vegaschristina]

The only tax you pay will be on anything new you buy. Say groceries, furniture, etc. If you make $300.00 a week, your paycheck will be $300.00 a week. I would think a person making that per week would know what they could buy in their income. Someone that makes more, obviously would buy more, but would also pay more in the sales tax. I guess I'm not understanding where you are getting why you don't think its fair?

Ok, say I make $1000 a week and I spend $300 on groceries. I'm taxed on the $300, right. Say someone on the better-off side of town makes $3500 per week and they spend $500 on groceries. They're taxed on the $500. Sounds fair, right? However, I've been taxed on 30% of my income, whereas the other guy's been taxed on 14.28% of his income. How is that fair?

Say I spend $1000 each week, between groceries, bills, and other miscellaneous shopping. So I've now spent 100% of my money and am taxed on that, right? Say the other guy spends only $3000 of his money each week, saving the rest. He's then only taxed on 85% of his income. Again, how is that fair?

[DirtyFeetDesigns (heb1976)]

You know - it might not be as big a thing to figure out as suspected - being military we get a COLA - cost of living allowance per place we are stationed... I suspect the government could easily put a tax bracket in place for every region based on the figures they use to pay us the difference in cost of living...

I agree with you on this. Since the cost of living has gone up so much ... my husband, who works for the post office, has just received a $.72 COLA raise. That went up from the normal $.05-$.25. You have to base these things on area. If companies can do it when figuring your state and city taxes based on where you live and work ... the government could do the same.

Personally I think all states should do away with the city and state taxes like Florida. I know their sales tax is alot higher then what it is in Ohio ... but I think the average person saves more overall then when it is taken out of each paycheck.

[tammy1999]

It would have to be based on your income verses cost of living in your area. For example ... my cousin's job has deals with the stock market. He easily makes over $100K a year + bonuses. He lives in Chicago and they just bought a house for $455K. I about freaked. When he saw our house, he said it would easily go for $300-350K in Chicago. The town over from us, according to the guy that inspected our house, our house would sell for $228K. We paid $136K.

My area is sorta considered middle income, but we live in a private community that has a man made lake. Houses *on* the lake will easily go for $200-700K ... but houses directly across the street from the lake (like ours), $100-175K.

What I think is amazing, and this is from friends of ours in the military, they can survive on their paychecks living in Ohio ... but in New York - they would be colllecting welfare.

The area you live in has to be relative to your pay. To me, if you make $250K + ... I would consider you very well off.

My husband and I have been in the real estate business for years and it just blows my mind how the same house can sell for a much different price depending on where you live.

A house that I lived in Missouri I sold for $55,000 a few years ago and was bout 1000 sq ft. I understand that same home here in Florida would sell for over $200,000!!!!!!!!!!! WOW!!!!!!!!! I guess what they say is true - A house is only worth what someone will pay for it.

[cheribear]

The only tax you pay will be on anything new you buy. Say groceries, furniture, etc. If you make $300.00 a week, your paycheck will be $300.00 a week. I would think a person making that per week would know what they could buy in their income. Someone that makes more, obviously would buy more, but would also pay more in the sales tax. I guess I'm not understanding where you are getting why you don't think its fair?

I think its safe to say people who make ridiculous amounts of money aren't the ones living paycheck to paycheck - which means even though they spend a lot, they don't spend nearly as much of their income as most people do.

We have a combination of sales taxes and income taxes, etc. I do think the sales taxes hit the poorer people harder. People making under a certain income do get a tax rebate check for what it is assumed they would have paid on sales taxes - so I know they exist but I personally haven't seen one of those for YEARS.

[Microferk ~ Miki Ferkul]

The only tax you pay will be on anything new you buy. Say groceries, furniture, etc. If you make $300.00 a week, your paycheck will be $300.00 a week. I would think a person making that per week would know what they could buy in their income. Someone that makes more, obviously would buy more, but would also pay more in the sales tax. I guess I'm not understanding where you are getting why you don't think its fair?


See, I'm thinking about the $20,000 new car/truck- that will now be an extra $5,000, PLUS the 6-7% we already pay in sales tax in our state.

What about homes? If you buy a $200,000 home will the government be tacking on another $50,000 to the price tag?

I know what I pay in taxes now and a Fair Tax would definitely end up costing our family a lot more in the long run. And I'm a lot more *middle class* than Palin or Biden :giggle

[tammy1999]

Ok, say I make $1000 a week and I spend $300 on groceries. I'm taxed on the $300, right. Say someone on the better-off side of town makes $3500 per week and they spend $500 on groceries. They're taxed on the $500. Sounds fair, right? However, I've been taxed on 30% of my income, whereas the other guy's been taxed on 14.28% of his income. How is that fair?

Say I spend $1000 each week, between groceries, bills, and other miscellaneous shopping. So I've now spent 100% of my money and am taxed on that, right? Say the other guy spends only $3000 of his money each week, saving the rest. He's then only taxed on 85% of his income. Again, how is that fair?

You receive refunds in advance the tax on purchases of basic necessities which is based on your income. There is a neat way to figure out what you would keep in your home here (http://www.fairtax.org/site/PageServer?pagename=calculator). I found it very interesting. It showed my household would save 104% on spendable income and my husband and I live on a set pension. So we are in the same boat you are describing. We have a low income, but know what we can spend and in turn would receive a refund on the sales tax every month. This plan would really put prespective on people's income and how much they can spend.

[vegaschristina]

But again, Tammy, it places an unfair percentage of taxes on those who can't afford to save large parts of their income.

[MommySpice]

Ok, say I make $1000 a week and I spend $300 on groceries. I'm taxed on the $300, right. Say someone on the better-off side of town makes $3500 per week and they spend $500 on groceries. They're taxed on the $500. Sounds fair, right? However, I've been taxed on 30% of my income, whereas the other guy's been taxed on 14.28% of his income. How is that fair?

Say I spend $1000 each week, between groceries, bills, and other miscellaneous shopping. So I've now spent 100% of my money and am taxed on that, right? Say the other guy spends only $3000 of his money each week, saving the rest. He's then only taxed on 85% of his income. Again, how is that fair?

So really, what is fair is a straight income tax. Everyone pays the same percentage, regardless of where they are at on the rich-poor continuum. No tax breaks for large companies, no tax breaks for poverty level. After all, we are all citizens, therefore we all need to contribute to this country, right?

No, I'm not being snarky. I don't have easy answers...we all want to tax everyone else, but lower our own taxes. I'm definitely middle class...we're on beginning teacher incomes (well, towards the beginning). I'm for less government, which would mean lower taxes...but I do understand that I need to pay at least some, to provide the government that is necessary. I just don't want it wasted like it is right now.

[tammy1999]

But again, Tammy, it places an unfair percentage of taxes on those who can't afford to save large parts of their income.

People save what they can save. I was able to live on a $20,000 salary, pay rent, my own health insurance and save $50 a month to my IRA and this was in 2000. Not very much, but I did something. And I think thats what this program is all about. Living within your means and doing what you can and not giving 1/3 of your income to the government.

[tammy1999]

So really, what is fair is a straight income tax. Everyone pays the same percentage, regardless of where they are at on the rich-poor continuum. No tax breaks for large companies, no tax breaks for poverty level. After all, we are all citizens, therefore we all need to contribute to this country, right?

No, I'm not being snarky. I don't have easy answers...we all want to tax everyone else, but lower our own taxes. I'm definitely middle class...we're on beginning teacher incomes (well, towards the beginning). I'm for less government, which would mean lower taxes...but I do understand that I need to pay at least some, to provide the government that is necessary. I just don't want it wasted like it is right now.

I like your point here and its kind of like the way it is here in Florida. Our gas tax is a bit higher and we don't have state income tax or taxes on food. Everything else you buy is at 7%. At least this way everyone pays taxes on what you buy. Such as gas and food. It works well for us and we figured we save a bit in our pay check from not paying to the state and not paying on food.

[vegaschristina]

People save what they can save. I was able to live on a $20,000 salary, pay rent, my own health insurance and save $50 a month to my IRA and this was in 2000. Not very much, but I did something. And I think thats what this program is all about. Living within your means and doing what you can and not giving 1/3 of your income to the government.

Ok, based, then, on your argument, people who are unable to save, because of poor choices in the past, tough luck. People who are unable to save because a medical crisis has left them living so close to the edge of financial ruin that they're unable to save right now...tough.

Living within your means is not always about making great choices every time you're given a choice. Sometimes its also about not breaking your elbow or having a heart attack. Sometimes it's just about luck.

In June, I broke my elbow. Because of that, even with my insurance, I ended up paying $360 in a single month for physical therapy. That doesn't include the urgent care co-pay, or the doctor visit co-pay, or the exciting surprise bill because my insurance didn't cover but 80% of the urgent care visit. My broken elbow cost my family well over $1000 in a 2 month span. Those 2 months, we were barely within our means, and on 2 occasions, my mom helped us out. That wasn't a poor choice on our part, just bad luck.

ETA: The reason for most bankruptcies in the US are medical issues. That's people who were living within their means and had a medical issue that cost them everything. It's not always about "living within your means."

[Microferk ~ Miki Ferkul]

Are large purchases like automobiles and homes taxable at the 23 or 25% level in the Fair Tax?

[tammy1999]

Are large purchases like automobiles and homes taxable at the 23 or 25% level in the Fair Tax?

If you buy a new car and house, yes you pay that percentage. If you buy used car or house you pay nothing.

[cheribear]

So, as long as I buy a used 3 million dollar yacht, I'm good? And if I'm looking at a 25.8 million dollar piece of real estate with a 10 year old mansion for my third home - no tax worries?

[vegaschristina]

So, as long as I buy a used 3 million dollar yacht, I'm good? And if I'm looking at a 25.8 million dollar piece of real estate with a 10 year old mansion for my third home - no tax worries?

Apparently, it's all good.

[NellieRose]

Simply playing Devil's Advocate here but.....

If this tax would only apply to "new" homes and autos you can bet your bottom dollar that new construction and cars sales would sharply decline (not that they currently haven't already but....KWIM?) thus effecting jobs, etc.

[cheribear]

Simply playing Devil's Advocate here but.....

If this tax would only apply to "new" homes and autos you can bet your bottom dollar that new construction and cars sales would sharply decline (not that they currently haven't already but....KWIM?) thus effecting jobs, etc.

Absolutely. :nod:

[Microferk ~ Miki Ferkul]

If you buy a new car and house, yes you pay that percentage. If you buy used car or house you pay nothing.

Wow. Can't get behind this one. The potential fallout for the manufacturing and housing industries, not to mention my wallet- nah. I'll keep my good ole income tax.

[hellosunshine]

I'm not sure the "fair tax" would be fair to families. Paying taxes on everything I buy new for a family of four, six, etc. would be a larger percentage of my income than what I would pay if I were single--maybe it's the not being single, having kids penalty tax. The current income tax allows some deductions for children.

Back to the original question--I think that people making over $200,000 probably are quite well-off here (Midwest). I know that $300,000 allows for a very good life here, but not extravagent. This country has such extremes of richness--e.g. 1% of the country has 20% of the wealth, which means that amount of money isn't shared by 99% of the people.
I kind of feel bad to say someone making $200,000 would be considered rich in comparison to the truly wealthy such as those Lehman Brother executives we've been hearing about this week. I guess being rich is relative. Yes, I am being wishy-washy on this because there are so many factors to consider besides an income amount.

[kjbstevens]

With the fair tax it also eliminates sales taxes so everywhere the prices of all items will drop around 22%. I believe it does sound good for us. So much money would be saved in less gov't that their spending should go down and cut out a lot of loopholes.

**If you wanted to hear more about the Fair Tax thing try to find a video or transcript from this weekends Huckabee show. He broke it all down and explained how it really works. It eliminates a bunch of the here and there annoying taxes that add up on stuff.

[ccouch]

Apparently, it's all good.

All good but the property taxes you'd pay on that absurd third property! LOL! I know we're talking income taxes/ Fair Tax. Just thinking about the property taxes on an estate like that is laughable to me though :)

[ccouch]

I don't know enough about the Fair Tax to really debate it, honestly. So, I'll stay out of that one.

What I would like to see (regardless of what it's called) is a more "fair" tax system. I don't think it's fair that there are different tax brackets and that people who make "X" amount of dollars are required to pay a larger percentage of their income to the government. It seems like a flat percentage for all ABOVE the poverty line would be more fair.

[lunafaerie]

Well, I think the whole tax debate is just more of the same old argument in America that we've been struggling with since we founded this country.

I have some ideas about tax that are probably going to prove once again I'm a crazy socialist and so I'm not going to post about taxes, lets talk about fairness in income disparity!

How is it fair that teachers barely break the poverty line in some areas and men who bring down the economy walk away with millions?

How is it fair that police officers who patrol my streets don't make enough to live in my community?

How is it fair that the soldiers defending my country make less than the mercenaries?

[NellieRose]

Well, I think the whole tax debate is just more of the same old argument in America that we've been struggling with since we founded this country.

I have some ideas about tax that are probably going to prove once again I'm a crazy socialist and so I'm not going to post about taxes, lets talk about fairness in income disparity!

How is it fair that teachers barely break the poverty line in some areas and men who bring down the economy walk away with millions?

How is it fair that police officers who patrol my streets don't make enough to live in my community?

How is it fair that the soldiers defending my country make less than the mercenaries?

I'm with you! ;)

[cheribear]

This country has such extremes of richness--e.g. 1% of the country has 20% of the wealth, which means that amount of money isn't shared by 99% of the people.

I'm such a socialist - but this is the reason why a flat tax rate on everyone will never, ever sit well with me. You can't convince me that anyone with that amount of money hasn't made it on the backs of the rest of the less fortunate, and I have no problem with the suggestion that they should be more heavily taxed than the rest because of that. Wouldn't the overall 'fair' tax on everyone have to skyrocket to make up for what that 1% wouldn't be paying anymore, because they hold so much of the wealth. For example, if that 1% of people pays a lower percentage on their taxes on their gazillions of dollars just to be 'fair' - so they pay the same percentage as the next guy - who's going to make up for that?

The regular people are already paying in so many ways for the super-wealthy to live large. I just don't see how making the taxes more 'fair' for the wealthy will help anything.

[lunafaerie]

I'm such a socialist - but this is the reason why a flat tax rate on everyone will never, ever sit well with me. You can't convince me that anyone with that amount of money hasn't made it on the backs of the rest of the less fortunate, and I have no problem with the suggestion that they should be more heavily taxed than the rest because of that. Wouldn't the overall 'fair' tax on everyone have to skyrocket to make up for what that 1% wouldn't be paying anymore, because they hold so much of the wealth. For example, if that 1% of people pays a lower percentage on their taxes on their gazillions of dollars just to be 'fair' - so they pay the same percentage as the next guy - who's going to make up for that?

The regular people are already paying in so many ways for the super-wealthy to live large. I just don't see how making the taxes more 'fair' for the wealthy will help anything.

:clap

[Microferk ~ Miki Ferkul]

Well, I think the whole tax debate is just more of the same old argument in America that we've been struggling with since we founded this country.

I have some ideas about tax that are probably going to prove once again I'm a crazy socialist and so I'm not going to post about taxes, lets talk about fairness in income disparity!

How is it fair that teachers barely break the poverty line in some areas and men who bring down the economy walk away with millions?

How is it fair that police officers who patrol my streets don't make enough to live in my community?

How is it fair that the soldiers defending my country make less than the mercenaries?


Hear hear!
And might I add, why are sports figures, musicians and celebrities revered and paid gargantuan amounts of money, but our brain trust- the scientists, researchers, etc. must scrape by with university-level wages and beg for grants?
Why does society condone and support this?

[cheribear]

Hear hear!
And might I add, why are sports figures, musicians and celebrities revered and paid gargantuan amounts of money, but our brain trust- the scientists, researchers, etc. must scrape by with university-level wages and beg for grants?
Why does society condone and support this?

I was going to ask the same question after my last post, but figured I might have stirred the pot enough already.

It seems like its become not just acceptable, but EXPECTED to throw shovelfuls of money at anyone who is successful. When an athlete or an actor or celebrity lands a deal to make a staggering amount of money for their next project, commercial, contract - everyone thinks that's just so wonderful. Wouldn't it make more sense to be appalled? Who is paying them? Who can't afford to see a major league game or take their kids to a theatre anymore? Or spend $200 for seats at a concert? Who pays $80 for cable tv every month?

Its like we think it doesn't affect us for some reason, and just :clap every time the next big contract is announced, because we love them and want them to make eversomuch money. :) They're worth it!

And those people make a pittance compared to the people who are REALLY super rich. I've never been one to be impressed with excessive wealth or see it as a positive sign for society. I'm more prone to seeing that kind of thing as a sign that things are seriously messed up and things need to change.

[mama_pajama]

Well, I think the whole tax debate is just more of the same old argument in America that we've been struggling with since we founded this country.

I have some ideas about tax that are probably going to prove once again I'm a crazy socialist and so I'm not going to post about taxes, lets talk about fairness in income disparity!

How is it fair that teachers barely break the poverty line in some areas and men who bring down the economy walk away with millions?

How is it fair that police officers who patrol my streets don't make enough to live in my community?

How is it fair that the soldiers defending my country make less than the mercenaries?

I completely agree.

The whole idea of fair tax or flat tax never sits well with me. How about lowering everybody's taxes by cutting out all of the wasteful spending in Washington? Not to mention the war in Iraq. If the politicians are going to spend the money, it has to come from somewhere. If the taxes on higher incomes go down, the taxes on lower incomes will go up to compensate for the difference. I do not agree with that. I also don't agree with people who make higher incomes having to take on more of the burden. Either way it sucks. So let's hold the politicians accountable, stop wasteful spending, and put more money in everyone's pockets. Then maybe we could talk about a flat tax that wouldn't cripple lower income families.

I'm not talking just about earmarks here, much of that spending isn't wasteful, and many of the bills that are passed by Congress are extremely wasteful.

[Microferk ~ Miki Ferkul]

I was going to ask the same question after my last post, but figured I might have stirred the pot enough already.

It seems like its become not just acceptable, but EXPECTED to throw shovelfuls of money at anyone who is successful. When an athlete or an actor or celebrity lands a deal to make a staggering amount of money for their next project, commercial, contract - everyone thinks that's just so wonderful. Wouldn't it make more sense to be appalled? Who is paying them? Who can't afford to see a major league game or take their kids to a theatre anymore? Or spend $200 for seats at a concert? Who pays $80 for cable tv every month?

Its like we think it doesn't affect us for some reason, and just :clap every time the next big contract is announced, because we love them and want them to make eversomuch money. :) They're worth it!

And those people make a pittance compared to the people who are REALLY super rich. I've never been one to be impressed with excessive wealth or see it as a positive sign for society. I'm more prone to seeing that kind of thing as a sign that things are seriously messed up and things need to change.

Sort of like the Roman Empire before the fall, right?
Thing is- that much money *usually* corrupts the precipient as well as society as a whole.

[mrsmegmcclure]

Just another thing to throw out there with the fair tax. There are shady elements of our society, those making a living doing illegal activities, that pay no income tax under our current tax system. With the fair tax they will have to pay the national sales tax just like everyone else and that will add to the amount of taxes collected. Another thing with the fair tax is the rebate check that you receive each month is based on your family size. So a single person would still pay more taxes than a family.

[tammy1999]

With the fair tax it also eliminates sales taxes so everywhere the prices of all items will drop around 22%. I believe it does sound good for us. So much money would be saved in less gov't that their spending should go down and cut out a lot of loopholes.

**If you wanted to hear more about the Fair Tax thing try to find a video or transcript from this weekends Huckabee show. He broke it all down and explained how it really works. It eliminates a bunch of the here and there annoying taxes that add up on stuff.

Thanks for this response, kjbstevens, and you seem to understand the concept of the Fair Tax. But, when people don't know the whole issue and how it breaks down for everyone and the actual money you would be saving, the money that you would get back every month from new items you buy, how much money would come back into this country from companies that went over seas and above all, your pay check would be all yours, you will get a lot of questions. You have to read the book, go to the website and find out more information.

Ex: the question about buying a million dollar used home. First of all, most people don't buy homes of that kind of worth and thats making a great exageration of the point. Also, saying that the car and housing business would loose money and jobs because new products won't be made. People are always going to want new homes , no matter what it costs. If you do buy a used home, what about all the new jobs that will come from needing people to update the older homes. Yes, there will be jobs lost in one sense but then again there will be tons more started back up. But also think about all the new jobs that will come around when all those companies can come back to America that doesn't have to worry about the highest corporate taxes in the world that they won't have to pay anymore.

I only brought this idea up because at the moment after reading the book and listening to the man that help design the idea, it really makes alot of sense and at least someone that is not a politician is trying to get the government to take notice about how bad our tax situation is in this country.

[tammy1999]

Just another thing to throw out there with the fair tax. There are shady elements of our society, those making a living doing illegal activities, that pay no income tax under our current tax system. With the fair tax they will have to pay the national sales tax just like everyone else and that will add to the amount of taxes collected. Another thing with the fair tax is the rebate check that you receive each month is based on your family size. So a single person would still pay more taxes than a family.

Girl, you are spot on. Thats what I love about living down here in Florida. Everyone pays the same in taxes.

[Chreamps]

Chart from Washington Post:

http://media3.washingtonpost.com/wp-dyn/content/graphic/2008/06/12/GR2008061200193.gif

[ccouch]

Thanks for posting that, Chris. It's great to see it side-by-side like that.

[kjbstevens]

The is really depressing to see that much on the upper branches. It'll be crazy to see the amount of those people that up and leave with their businesses and jobs especially since they won't benefit or use any of this stuff the gov't has planned to do with the social services part of the money. Nice to see though.

[Franbvm]

i know this isn't isn't very popular because it is a radical change...but I'm for the fair tax amendment...

[mlpieters]

oh my. on most charts my family would be considered poor.

but do i believe in taxing the rich at a higher percentage? mmmm...nope.

[mrsmegmcclure]

The interesting thing that I'd like to see from this chart is how many people in these lower brackets have any tax liability. Obama states that 95% of people that make less than 100,000 will get a tax cut but the problem with that stat is that 35% of those people don't have any tax liability. So 35% of these people are getting a government handout not a tax cut.

Chart from Washington Post:

http://media3.washingtonpost.com/wp-dyn/content/graphic/2008/06/12/GR2008061200193.gif

[dgreenshield]

seeing it side by side is good. I wish there was a easy solution to this problem...I agree that one place to start is with smart spending by our government.
And it's not just big government, our school districts and local municipalities need to spend our money more effectively.

[ccouch]

oh my. on most charts my family would be considered poor.

but do i believe in taxing the rich at a higher percentage? mmmm...nope.

hee hee....looks like I'm in the poor house with you, Lauren :)

[txmusicmom]

Middle Class Tax-

We have had our best tax break that past few years- the child credit has been a huge help-- just why does it go away when they are the MOST expensive-- hee hee

[cheribear]

oh my. on most charts my family would be considered poor.

but do i believe in taxing the rich at a higher percentage? mmmm...nope.

Why not?

Seems to me a bailout package was just approved to stabilize the economy, and everyone's saying that money has to come from somewhere, and that they'll worry about punishing who caused this blah, blah, blah later on, and there'll be no golden parachutes, whatever. I am reasonably sure that a lot of people got rich somewhere along the line, and they won't be the ones paying for this bailout.

Maybe its over-simplified, but I'm thinking - if you're wondering where the money all went - maybe look where the money IS. There's a clue. Then don't feel bad about taxing them. :lol They are far better equipped to weather an economic crisis than the rest of the population. But it always falls to the middle class to pay for these things, doesn't it?

[hellosunshine]

This is an interesting article about what types and the shares of the various taxes that the different income groups pay. All income groups pay taxes, and depending on the type of tax, it may be more burdensome for the lower income groups or for the upper income groups. Here's an example of the information.

http://www.taxfoundation.org/UserFiles/Image/Fiscal%20Facts/ff80/figure2.jpg
Source: Andrew Chamberlain and Gerald Prante, "Who Pays Taxes and Who Receives Government Spending? An Analysis of Federal, State and Local Tax and Spending Distributions, 1991-2004 (http://www.taxfoundation.org/publications/show/2282.html)." Tax Foundation Working Paper, No. 1.


http://www.taxfoundation.org/news/show/22287.html

[ccubed]

Middle Class Tax-

We have had our best tax break that past few years- the child credit has been a huge help

Expecting this not to be a popular viewpoint. . .

The fact that this tax credit even exists makes me angry, but the idea being bandied about that it should be increased infuriates me. Why should people with kids, who are using more resources, e.g. education and infrastructure, be given additional tax credits?

I have no issue with the deduction for a dependent child, but I do have an issue with the credit.

For me, it is an issue of personal responsibility . . . . and saving . . . . and providing for your own children . . . . without the assistance of the government. If you cannot afford to provide for them . . . . and cannot take care of them with your own means . . . . well then, don' have them.

And, yes, we have been the recipients of this child tax credit so it is not a matter of sour grapes like some would be inclined to accuse. It still is my opinion that this credit is not only unfair but illogical as well.

[Gina.Maria]

You know - it might not be as big a thing to figure out as suspected - being military we get a COLA - cost of living allowance per place we are stationed... I suspect the government could easily put a tax bracket in place for every region based on the figures they use to pay us the difference in cost of living...

They use COLA charts in determining eligibility for Student Financial Aid, as well. It's certainly not a foreign concept to the Feds and a team of statisticians, mathematicians and programmers could probably work it out pretty easily.

The only tax you pay will be on anything new you buy. Say groceries, furniture, etc. If you make $300.00 a week, your paycheck will be $300.00 a week. I would think a person making that per week would know what they could buy in their income. Someone that makes more, obviously would buy more, but would also pay more in the sales tax. I guess I'm not understanding where you are getting why you don't think its fair?

Let's see... The wealthy spend amounts of money that would make the rest of us puke but they also spend it on "vintage" cars, antique furniture, auctioned art and existing homes. Additionally, they can and do travel to Europe to buy current fashions. How much actual tax dollars do you think they'd part with? They're not stupid - they got wealthy by using their brains and common sense says that buying smart means they'll keep more of their money.


Well, I think the whole tax debate is just more of the same old argument in America that we've been struggling with since we founded this country.

I have some ideas about tax that are probably going to prove once again I'm a crazy socialist and so I'm not going to post about taxes, lets talk about fairness in income disparity!

How is it fair that teachers barely break the poverty line in some areas and men who bring down the economy walk away with millions?

How is it fair that police officers who patrol my streets don't make enough to live in my community?

How is it fair that the soldiers defending my country make less than the mercenaries?

Yeah, I'd love to see changes to this. It's just sickening that we value entertainers more than educators and sports players more than fire fighters and police.

[JCSimon]

The interesting thing that I'd like to see from this chart is how many people in these lower brackets have any tax liability. Obama states that 95% of people that make less than 100,000 will get a tax cut but the problem with that stat is that 35% of those people don't have any tax liability. So 35% of these people are getting a government handout not a tax cut.

So, how do we get to be part of that 35% that currently has no tax liability?? We easily pay out 30-40% of our income every year in taxes. Is our tax accountant missing something we should know about?

[mlpieters]

Middle Class Tax-

We have had our best tax break that past few years- the child credit has been a huge help-- just why does it go away when they are the MOST expensive-- hee hee

oh my goodness i couldn't agree more. we lost the majority of tax breaks on our children the YEAR they turned 17. um, hello! for us that is two years of high school!

Why not?



this type of thinking makes me think that people believe all rich people are evil. that they've done something wrong and sinister to be where they are. my relatives are multi-millionaires. they work their BUTTS OFF to be where they are - no one gave them a college degree (one doesn't have one, the other one earned his degree at a less prestigious college while he started and succeeded at his own business). do they deserve to pay more percentage of their income than me? i don't think so.

they employee alot of people. i know them - when their spendable income goes down - they spend less - and look to remove expenses from their budget - sometimes that comes in the form of people. maybe not persay firing employees - but in other ways.

although i have a tough time as a lower income family - i can't afford to start a business. i can't afford to hire people to do things for me. Honestly, at my income level i do very little to "stimulate" the economy.

so -- although these are over simplifications it's the theory of the "tax the rich because their rich" or "tax the rich because they can afford it" that just chaps my hide.

some day i hope to be better off. i don't want my penalty for working 4 jobs (2 of us working 2 jobs) saving and cutting back here to pay "more" just because i make more.

[bho]

Ok, say I make $1000 a week and I spend $300 on groceries. I'm taxed on the $300, right. Say someone on the better-off side of town makes $3500 per week and they spend $500 on groceries. They're taxed on the $500. Sounds fair, right? However, I've been taxed on 30% of my income, whereas the other guy's been taxed on 14.28% of his income. How is that fair?

Say I spend $1000 each week, between groceries, bills, and other miscellaneous shopping. So I've now spent 100% of my money and am taxed on that, right? Say the other guy spends only $3000 of his money each week, saving the rest. He's then only taxed on 85% of his income. Again, how is that fair?

I believe that groceries and necessities would not be taxed, Christina.

And my two cents...there is nothing NEAR fair about the way it is right now. Not even close. Last I checked, not much in life is fair.

[kjbstevens]

I agree with you Lauren. I also think they are going to get rid of people's benefits and quit expanding before they take a dent in their own wallet. If nothing else they'll just find nice ways to squirrel away some of their money or if they put it into charity they can write it off. If they get rid for the charitiable giving stuff they'll shoot themselves in the foot because then a lot of people won't give so that'll be more the gov't has to fund. I'd say some of the percentage that gives a good amount now does it so they can write it off. It all comes back to the whole businesses thing. They'll just raise the price of all of our goods so that we pay the tax for them. They aren't going to pay it themselves and same with the rich. They can make the money back out of just raising our prices, keeping their money out of the economy, or cutting back on their business spending. It might seem evil on paper but if our businesses are suffering then the entire country is suffering. This past few weeks has showed us that. They just need some major, major reform to the whole system though. Neither plan is perfect but it's those lower brackets the benefit most from the social programs. I believe a little can go towards taking care of themselves with their tax money if they can't do it themselves and I'm in that group so I'm not trying to be mean or rude with it. We get WIC. I don't see why we shouldn't pay into it if we benefit from it. Most brackets pay in and don't even get the option of programs like that with limits what you spend the money on and rules that makes a positive difference for kids. It is direct aid that has limits. That is a good tax program. Independance cards that you can buy lottery tickets and doritos. Not a good tax program.

[mlpieters]

I agree with you Lauren. I also think they are going to get rid of people's benefits and quit expanding before they take a dent in their own wallet. If nothing else they'll just find nice ways to squirrel away some of their money or if they put it into charity they can write it off.

yup. my family gives alot of money to charity. they feel it's their responsibility to help out less fortunate people. their responsibiltiy. not the governments.

[vegaschristina]

And my two cents...there is nothing NEAR fair about the way it is right now. Not even close. Last I checked, not much in life is fair.

Yes, be we weren't talking about how to make life fair. We were discussing a "Fair" tax. If the fair tax goes in as proposed, with only new purchases being taxed, that's certainly not fair to anyone because as others have mentioned, I spend a larger portion of my income than someone who makes substancially more than I do. That shifts the largest tax burden onto those who can least afford it.

[mrsmegmcclure]

You will get a rebate check based on your family size for the necessities. If you are barely spending more than the basic necessities you will receive most, if not all, of your taxes back. A person who makes more money and therefore has more discretionary income will of course make more purchases and pay more sales tax. Another thing that isn't fair right now is illegal immigrants in this country have to pay no income tax. Under the fair tax plan they will have to pay the sales tax just like everyone else. And as I mentioned earlier in this thread so will criminals.
Yes, be we weren't talking about how to make life fair. We were discussing a "Fair" tax. If the fair tax goes in as proposed, with only new purchases being taxed, that's certainly not fair to anyone because as others have mentioned, I spend a larger portion of my income than someone who makes substancially more than I do. That shifts the largest tax burden onto those who can least afford it.

[NellieRose]

yup. my family gives alot of money to charity. they feel it's their responsibility to help out less fortunate people. their responsibiltiy. not the governments.

I agree with you but unfortunately as we see with the financial meltdown people don't always do what they ought to....we have seen people (private citizens) bilk the system after Hurricane Katrina and also after September 11, 2001, just to name a few high profile examples.

While we are personally active in volunteering time and money to many a cause I also don't mind paying a little more in my taxes to help out my fellow people in need to make sure they are taken care of.

[sandersmr]

To answer the OP, Nancy Pelosi stated in a speech that those who did not qualify for the latest tax rebate check this year are the rich. Well, because I'm single - making more than $84,000 would make me rich??? I don't even make 6 digits, I live in a house that's valued at around $110,000, I drive a 6 year old pickup truck - and I'm rich????? Yeah, right!

And the last tax break? Again, because I'm single my taxes actually went up!!!

So I think my deifnition of rich and Ms. Pelosi's are just a wee bit on opposite ends of the spectrum.

[NellieRose]

The interesting thing that I'd like to see from this chart is how many people in these lower brackets have any tax liability. Obama states that 95% of people that make less than 100,000 will get a tax cut but the problem with that stat is that 35% of those people don't have any tax liability.

Sorry if this was addressed further down the thread but either you have a type-o or have your figure wrong here...the threshhold is not $100,000 but $200,000 for singles and $250,000 for families.

Just wanted to clarify.

[mrsmegmcclure]

Nevertheless, how can you give 95% of people making below these figures a tax cut if 35% of those people no income tax liability? Is he going to up the amount for earned income credit? If so, that isn't a tax cut but a handout and should be stated as such. If you want to pay more taxes volunteer your own money but don't push this on everyone. According to the charts posted in this thread for my family's tax bracket we would only get about a $200 difference in tax cuts under Obama's plan. We won't be hit by Obama's tax the rich tax plan but it is inherently wrong to me to punish people for doing well. Look I'm all for helping those less fortunate but this is best accomplished by giving to charity, faith based programs, or volunteering your time. The government enlarging the welfare state just makes people put more dependence on government and less on helping themselves to make a better life.
Sorry if this was addressed further down the thread but either you have a type-o or have your figure wrong here...the threshhold is not $100,000 but $200,000 for singles and $250,000 for families.

Just wanted to clarify.

[khalgren77]

Wonder how they propose to do that? When they work they're paid cash, I doubt if they use a legal adress if any, they have no SS # unless they steal one..I don't see how that will be enforced...will be interesting.
You will get a rebate check based on your family size for the necessities. If you are barely spending more than the basic necessities you will receive most, if not all, of your taxes back. A person who makes more money and therefore has more discretionary income will of course make more purchases and pay more sales tax. Another thing that isn't fair right now is illegal immigrants in this country have to pay no income tax. Under the fair tax plan they will have to pay the sales tax just like everyone else. And as I mentioned earlier in this thread so will criminals.

[NellieRose]

Another thing that isn't fair right now is illegal immigrants in this country have to pay no income tax. Under the fair tax plan they will have to pay the sales tax just like everyone else. And as I mentioned earlier in this thread so will criminals.

The illegal population does pay sales tax wherever they purchase a taxable item provided that state has a Sales & Use Tax.

Here's an idea, have all the illegals moved to states that have no Income Tax, would that settle the score??? :D

FYI...the US Treasury does in fact take in tax revenues for illegal workers that pay taxes.....the government has no complaints with that & doesn't seek out those illegals to detain or deport them, the UST quite likes the money flowing in. ;)

ETA: My suggestion was toungue in cheek.

[mrsmegmcclure]

The fair tax is a national sales tax and illegal immigrants have to make purchases whether they are paid in cash or with a check. Furthermore, since they are here illegally they won't be able to file for the rebate check without showing their illegal status. Maybe this will force them to go back to their own country of origin and come here legally. If they stay they will be taxed at a higher rate than American citizens or those immigrants who have chosen to go through the proper channels and come here legally.
Wonder how they propose to do that? When they work they're paid cash, I doubt if they use a legal adress if any, they have no SS # unless they steal one..I don't see how that will be enforced...will be interesting.

[mrsmegmcclure]

The fact still remains that the vast majority of illegals working for cash under the table are paying no income tax. I live in a state, TN, with a state sales tax instead of income tax. The illegals here do have to pay state taxes but still are not responsible for income taxes. If income taxes are done away with and replaced with a national sales tax everyone will have to pay their fair share of taxes.
The illegal population does pay sales tax wherever they purchase a taxable item provided that state has a Sales & Use Tax.

Here's an idea, have all the illegals moved to states that have no Income Tax, would that settle the score??? :D

FYI...the US Treasury does in fact take in tax revenues for illegal workers that pay taxes.....the government has no complaints with that & doesn't seek out those illegals to detain or deport them, the UST quite likes the money flowing in. ;)

ETA: My suggestion was toungue in cheek.

[Scorpiosue1102]

The problem with the charts is that it doesn't tell you how many more people are going to be in those lower incomes. People are losing their jobs left and right because of that those lower brackets are going to have more people in there. The U.S. has had 9 months of job losses. Very scary stats. The next problem is that the jobs are not there.

[kjbstevens]

The fact still remains that the vast majority of illegals working for cash under the table are paying no income tax. I live in a state, TN, with a state sales tax instead of income tax. The illegals here do have to pay state taxes but still are not responsible for income taxes. If income taxes are done away with and replaced with a national sales tax everyone will have to pay their fair share of taxes.

Yeah our nearest mall back home was in TN. It sucked paying that 14 and some percent tax. They get VA people's money too. :lol

[Glueless Media]

Yeah our nearest mall back home was in TN. It sucked paying that 14 and some percent tax. They get VA people's money too. :lol
I LOVE vacationing in TN But hate those taxes..:D I want to rent the cabin not buy it..lol(JOKING)