Paying Taxes: What is Fair?

[BenTheMan]

So my mom forwarded me the suicide letter written by the guy who crashed his plane into the IRS building. And while I feel that his case is probably extreme, I do get the feeling that taxes in America, specifically the tax code itself, is probably not very fair.

Let me qualify this last statement a bit. Oliver Wendell Holmes, who was (as far as I can tell) a conservative judge, said ``Taxes are the price we pay for living in a civilized society.'' I am willing to accept that rich people should pay more taxes than poor people, as a percentage of their income. Rich people, by and large, became rich while living in America (most didn't inherit their fortunes). Some were at the right place at the right time, and others benefited from having some talent that society was willing to reward. But either way, there is some debt that such people owe to society, specifically to help ensure that society is actually a better place because of them. This means paying a disproportionate amount for schools, roads, the military, and the social net.

But at what point does this turn from ``fair'' to ``unfair''?

I want to know the following, if you're willing to share:

What is your income level? We're all anonymous, so you can speak in broad terms without being embarrassed, surely.

What level of income do you plan to max out at during your lifetime? I suppose we all should have fairly reasonable perspective on this.

Do you pay too much taxes? Is your tax level fair? What would you consider a fair amount of taxes to pay?

How do you feel about the tax code? My impression is that it is full of legal loopholes and probably needs to be completely reevaluated. This seems to be a popular opinion, but never one which the government ever tackles. Why?

I would hope that we can all discuss this issue rationally.

 

[Pinwheel]

What is your income level? We're all anonymous, so you can speak in broad terms without being embarrassed, surely.

This:
http://www.i-resign.com/uk/financia...ossSalary=31000&radAge=1&txtStudentLoan=18000

What level of income do you plan to max out at during your lifetime? I suppose we all should have fairly reasonable perspective on this.

Oh I dunno maybe ~£45-50K

Do you pay too much taxes? Is your tax level fair? What would you consider a fair amount of taxes to pay?

More or less, its about fair.

How do you feel about the tax code? My impression is that it is full of legal loopholes and probably needs to be completely reevaluated. This seems to be a popular opinion, but never one which the government ever tackles. Why?

Yeah! I dont know why either, other than the fact that Governments would probably open up a can or worms or think that doing anything about it would drive wealthy, prosperous people out of the country to say...the USA.

 

[cosmictraveler]

A flat tax is better for everyone. It doesn't allow any deductions so there's no more tax codes needed. You would start paying taxes after you made $30,000.00 and above, those under that , to me, are in a very low wage status and shouldn't have to pay anything. So everyone , no matter what they EARN pays a 15 percent tax on ALL of their income no matter where it comes from.

 

[BenTheMan]

More or less, its about fair.

Hmmm. It looks like you pay abour 30% of your salary in income taxes. What do you get for this percentage?

I guess I should ask---what does ``fair'' mean to you?

Yeah! I dont know why either, other than the fact that Governments would probably open up a can or worms or think that doing anything about it would drive wealthy, prosperous people out of the country to say...the USA.

Well, you're assuming that any tax reforms wouldn't benefit the wealthy. And you're right---there's always a calculus to do, but I'd imagine that any of the wealthy people who were already living in England probably wouldn't be affected to greatly by any overhaul of the tax system. It might actually make their lives easier, if they didn't have to pay accountants as much.

Either way, I'm not at all familiar with the way the tax code works in England. Is it true that most people see it as needlessly complicated?

 

[BenTheMan]

A flat tax is better for everyone. It doesn't allow any deductions so there's no more tax codes needed. You would start paying taxes after you made $30,000.00 and above, those under that , to me, are in a very low wage status and shouldn't have to pay anything. So everyone , no matter what they EARN pays a 15 percent tax on ALL of their income no matter where it comes from.

Why $30,000?

I mean, if you live in Kansas City, that's a lot of money. But it's hard to live in Santa Barbara on that.

 

[cosmictraveler]

$30,000 is a figure I came up with that according to most people would be a low income but I would consider a lower amount but nothing lower than $20,000.00. A middle income person today would be making $50,000.00 or above.

 

[Read-Only]

So my mom forwarded me the suicide letter written by the guy who crashed his plane into the IRS building. And while I feel that his case is probably extreme, I do get the feeling that taxes in America, specifically the tax code itself, is probably not very fair.

Let me qualify this last statement a bit. Oliver Wendell Holmes, who was (as far as I can tell) a conservative judge, said ``Taxes are the price we pay for living in a civilized society.'' I am willing to accept that rich people should pay more taxes than poor people, as a percentage of their income. Rich people, by and large, became rich while living in America (most didn't inherit their fortunes). Some were at the right place at the right time, and others benefited from having some talent that society was willing to reward. But either way, there is some debt that such people owe to society, specifically to help ensure that society is actually a better place because of them. This means paying a disproportionate amount for schools, roads, the military, and the social net.

But at what point does this turn from ``fair'' to ``unfair''?

I want to know the following, if you're willing to share:

What is your income level? We're all anonymous, so you can speak in broad terms without being embarrassed, surely.

Hi, Ben,

Over the past ten years my income has run from about $2mil per year to $5mil.

What level of income do you plan to max out at during your lifetime? I suppose we all should have fairly reasonable perspective on this.

If you mean annually, I'm shooting for $10mil/year.

Do you pay too much taxes? Is your tax level fair? What would you consider a fair amount of taxes to pay?

I pay about 46% (that's federal only) and I consider it fair. And I don't mind paying more each year because that just means that I earned more.

How do you feel about the tax code? My impression is that it is full of legal loopholes and probably needs to be completely reevaluated. This seems to be a popular opinion, but never one which the government ever tackles. Why?

The tax code is a bit complex but it's fully understandable by anyone with just a decent high school level of education. People who complain about it the most are the ones who've never put any real effort into studying it.

Another thing is that it almost always changes some each year - so it takes a little effort to stay current. And again, that little bit of effort is what the complainers are unwilling to spend. And the reasons for the changes and "loopholes" are all a form of exercising control over the economy.

 

[Pinwheel]

Hmmm. It looks like you pay abour 30% of your salary in income taxes. What do you get for this percentage?

Hmmm, well its hard to be specifc, except for usual things like the police, NHS, schools etc. Some things I wont benefit from if I have no need for them, eg when l needed the NHS when I was seriously ill etc, and didnt have to pay anything (well except for the car parking charge, the bastards).

I wasnt aware the tax system in the UK was any more or less complicated that the US, there are tax breaks for families etc I suppose. As a single unmarried male there are probably things I dont derive benefit from until I get hitched and start a family. Other things I dont benefit from as Im employed, such as unemployment benefits etc, which is some consolation its there if I did lose my job.

'National Insurance' is supposed to be for when you retire and draw a state pension, later in life. Usually its not enough to support you for a lifestyle you are accustomed with, so people tend to have private pensions too.

I dont expect to get every penny back in benefit that I pay, there are those who do get back much more and those much less...

I still hate those that abuse the welfare system, Government waste and the fact that taxpayers are bailing out the casinos in the City of London. SO guess I dont feel that its completely fair, but I guess none of us really get to choose what our taxes pay for and what it doesnt.

 

[cosmictraveler]

@Read-Only

Then why is it that businesses get to deduct their lights, insurances, and any other EXPENSES when the average homeowner only can deduct their interest?

 

[Cowboy]

I believe in a flat tax.

If someone gives up 30% of their income in taxes, what we're basically saying is that the government owns 30% of that person's working life. With that in mind, I don't see why a millionaire owes a bigger percentage of his or her working life to the government than someone who earns minimum wage.

 

[Read-Only]

@Read-Only

Then why is it that businesses get to deduct their lights, insurances, and any other EXPENSES when the average homeowner only can deduct their interest?

Simple - because that's an actual cost of *doing* business. And the average homeowner can deduct a lot more than just mortgage interest.

Back to that first part again: If they weren't allowed to deduct those expenses, whatever they are selling you would have to cost you more. You may not be aware of it, but most businesses operate on a very small profit margin even when considering those operating expenses.

 

[cosmictraveler]

And the actual cost of a working person is allot more than what they earn in most cases. at a minimum wage, for example, the business doesn't have to pay the workers car expenses, mortgages, insurances and other expenses that they have in order to go to their jobs daily. But businesses get to deduct the car costs they have that get them to work plus all other things that go along with their "company" vehicles. Then there's those business trips to Paris or wherever which are also deductible while the vacations the workers must pay for are not. There are many examples that businesses use to deduct things they use daily that the worker cannot.

This is why I like the FLAT TAX because there are no more deductions that anyone can use and everyone pays the same.

 

[Read-Only]

And the actual cost of a working person is allot more than what they earn in most cases. at a minimum wage, for example, the business doesn't have to pay the workers car expenses, mortgages, insurances and other expenses that they have in order to go to their jobs daily. But businesses get to deduct the car costs they have that get them to work plus all other things that go along with their "company" vehicles. Then there's those business trips to Paris or wherever which are also deductible while the vacations the workers must pay for are not. There are many examples that businesses use to deduct things they use daily that the worker cannot.

This is why I like the FLAT TAX because there are no more deductions that anyone can use and everyone pays the same.

Yes, there IS some room for abuse - and I also support a flat tax (and have for decades!)

 

[BenTheMan]

This is why I like the FLAT TAX because there are no more deductions that anyone can use and everyone pays the same.

What about corporations? Do they pay a flat tax, too?

 

[pjdude1219]

I believe in a highly progressive tax system with generally moderate marginal rates until we get up into like 10 million a years. Say 40% out side of the super high incomes

 

[Read-Only]

I believe in a highly progressive tax system with generally moderate marginal rates until we get up into like 10 million a years. Say 40% out side of the super high incomes

Sure YOU would - since you don't work, don't earn anything and will never pay taxes anyway. :shrug:

 

[Read-Only]

What about corporations? Do they pay a flat tax, too?

Yes, they should be treated just like every other "legal individual."

 

[iceaura]

A fair level of taxation is one in which the beneficiaries of the economy pay for it.

You can't flat tax for that, because the percentage would be too high on the poor - who don't benefit nearly as much from the economy, anyway.

 

[Norsefire]

The economy isn't an object.......it's the emergent "thing" that is the product of many micro-transactions and properties. Nobody owes you anything for "using" the economy.

The wealthy are wealthy, usually, because they have already given something to society.....which they receive payment for. The idea that people need to pay for "using the economy" suggests that some entity "owns" the "economy" and that the economy is some tangible system. It's not.

Thus the fairest level of taxation is the lowest one. The income and corporate income taxes ought to be abolished altogether.

 

[madanthonywayne]

A fair level of taxation is one in which the beneficiaries of the economy pay for it.

You can't flat tax for that, because the percentage would be too high on the poor - who don't benefit nearly as much from the economy, anyway.

Almost everyone who supports a flat tax says there should be a minimum level below which no tax is paid. Like the 20 or 30 k figure referenced above. How is zero too high for the poor?